California Lawmakers Reject Proposal to Crack Down on Utility Spending

California lawmakers rejected a proposal on Monday aimed at cracking down on how some of the nation’s largest utilities spend customers’ money, sparking outrage among consumer groups and environmental advocates.

The bill, authored by Democratic state Sen. Dave Min, would have expanded the definitions of prohibited advertising and political influence to include regulators’ decisions on rate-setting and franchises for electrical and gas corporations. It would also allow regulators to fine utilities that break the rules.

However, the bill failed to pass a legislative committee for the second time, facing intense opposition from utilities, including Pacific Gas & Electric (PG&E).

Consumer groups have accused utilities of using money from customers to fund trade groups that lobby legislators and for TV ads disguised as public service announcements. PG&E, in particular, has faced scrutiny for spending up to $6 million on TV ads to promote its plan to bury power lines to reduce wildfire risk, a plan that some consumer groups opposed because it increased customers’ bills.

PG&E opposed the bill, arguing that it would take away the power of state regulators to examine utility companies’ costs and decide whether it is “just or reasonable” for customers to pay for them. The company’s lobbyist, Brandon Ebeck, defended the use of customer funds for industry association membership fees, citing benefits such as emergency response coordination and wildfire training.

The rising cost of electricity in California has led to increased scrutiny of how utilities spend the money they collect from customers. As rates continue to climb, consumer groups are calling for clearer rules and required disclosures for advertising costs.

Environmental advocates, such as Matt Vespa from Earthjustice, expressed disappointment over the bill’s failure to pass, stating that the current rules incentivize utilities to push the boundaries of what they can get away with.

The debate over how utilities spend customer funds is likely to continue as California grapples with the high cost of power and the need to maintain and upgrade electrical equipment to reduce the risk of wildfires in the state’s long, dry summers.