Assembly committee advances bill to bar utilities from charging ratepayers for political ads and lobbying

The Assembly Committee on Utilities and Energy on Oct. 26 voted to pass SB 24 as amended to the Appropriations Committee, a bill by Senator McNerney that would prevent investor-owned utilities (IOUs) from charging utility customers for political advertising, lobbying and spending to oppose municipalization efforts.

SB 24’s author, Sen. McNerney, told the committee the bill is “common sense” and aims to stop IOUs from using ratepayer dollars for political campaigns and ads. Supporters said ratepayer funds should pay for service, infrastructure and affordability programs — not political communications. Adria Tinnan, director of race, equity and legislative policy at TURN, said SB 24 “prohibits utilities from abusing rate payer dollars to pay for lobbying, advertising, and to work against municipalization efforts.”

The bill’s supporters cited multiple instances they say show problematic use of ratepayer money: testimony referenced Southern California Gas Co. spending “at least $36,000,000” of customer-related funds on political lobbying since 2019, PG&E running customer-funded ads in high-profile sports broadcasts and IOUs spending millions on campaigns opposing municipalization campaigns (testimony referenced more than $10,000,000 expended against SMUD’s effort in Yolo County and roughly $400,000 tied to an effort in San Diego).

Opponents, including industry representatives, said they share the bill’s premise but warned SB 24 is overbroad. Kent Kaus, representing San Diego Gas & Electric and SoCalGas, said the matter at issue was an accounting classification and that “there was never any accounting or attempt to recover those costs.” PG&E’s witness said most advertising is shareholder-funded and reiterated that utilities cannot recover funds for municipalization efforts from customers. Industry witnesses also argued the measure could raise First Amendment concerns and interfere with utilities’ ability to retain outside legal experts for complex regulatory matters.

Committee members voiced mixed concerns about scope. Vice Chair Patterson said he supported the concept of stopping ratepayers from funding political contributions but raised worry that the bill’s language on legal and consultant fees might be too broad. Assemblymember Zipper likewise urged caution on limits affecting legal counsel. The author said she would accept committee amendments and continue to work with stakeholders on tightening consultant-fee language.

The committee approved SB 24 as amended by a roll call that the hearing recorded as 11–1 in favor; the measure was referred to the Assembly Appropriations Committee. The committee left the roll open for absent members to add on votes before adjournment.

SB 24 would not ban IOUs from engaging in political speech or advocacy, its sponsors and the author emphasized; rather the bill would require those costs be borne by shareholders or otherwise not recovered from ratepayers, and would add reporting and accountability mechanisms supporters say are necessary to enforce existing limits.

Next steps: SB 24 proceeds to the Assembly Appropriations Committee for further consideration and possible fiscal analysis.