Committee advances AB 825 to pursue securitization, public transmission financing and oversight to address rising electric rates

The Assembly Committee on Utilities and Energy on a recorded vote advanced AB 825, a broad package to address rising electric rates and wildfire mitigation costs, to the Assembly floor. The bill, brought to the committee by Chair Petrie Norris, would (1) authorize securitization for a portion of future undergrounding capital expenditures, (2) create an optional public transmission financing program that could use Proposition 4 funds and I Bank financing to lower transmission costs, and (3) establish a task force to complete a value‑for‑money review of ratepayer‑funded programs.

"This bill contains meaningful steps to address the crisis of affordability facing electric ratepayers," Matt Friedman of The Utility Reform Network testified in support. Friedman described two headline proposals: a securitization mechanism for $15,000,000,000 of future undergrounding capital expenses and public financing options for transmission that could use existing voter‑authorized Proposition 4 funds.

Friedman and other supporters told the committee that public ownership or public‑private financing could lower the cost of capital for large transmission projects and produce long‑term savings for ratepayers. Committee testimony cited California ISO planning that shows an estimated $63,000,000,000 in new transmission expenditures through 2045 and testimony by Friedman that investor‑owned utilities forecast roughly $90,000,000,000 in capital expenditures from 2025–2028. Friedman said securitizing $15 billion "would save about $8,000,000,000" over the long term, with most savings front loaded into the first decade.

Stakeholders were divided. Representatives of investor‑owned utilities and the California Coalition of Utility Employees urged caution and asked for more analysis of liability, credit market appetite for large securitizations, and the cumulative effects of multiple legislative proposals on utility financial health. Kent Kaus for SDG&E and Brandon (last name recorded as Ebit) for PG&E said utilities were open to public financing in principle but warned that changes affecting return on equity or the utilities' balance sheets could raise borrowing costs if credit ratings were impacted. Labor representatives raised concerns about the pace of infrastructure spending and broader market effects.

Other stakeholders—including community choice aggregators, energy efficiency groups and agricultural energy consumers—expressed conditional support or said they wanted to continue working on amendments, particularly around protections for energy efficiency and demand response programs.

The committee discussed wildfire fund participation for publicly financed projects; the author said amendments require any publicly financed project to participate in the state's wildfire fund, obtain insurance and submit mitigation plans, to ensure new public owners share liability and contribute financially to the shared risk pool.

Committee members raised additional questions about how the $15 billion securitization figure was derived and whether the measure could disincentivize necessary undergrounding. The author and witnesses said the securitized amount is a modest portion of forecasted capital spending and that the measure is intended to provide additional financing options, not to prevent undergrounding.

After discussion the committee voted to pass AB 825 to the Assembly floor. The committee recorded the motion as passed to the floor and indicated further work with stakeholders and financial analysts would continue as the measure moves forward.