Committee backs Erwin27s AB 825 to tackle electric affordability with securitization and public transmission financing

The Assembly Committee on Utilities and Energy voted to send AB 825 to the floor after a prolonged hearing in which the bill’s author and supporting witnesses outlined a multi-part plan to address rising electric rates.

Assemblymember Erwin presented AB 825 as a suite of measures focused on three cost drivers: wildfire mitigation and undergrounding expenses, transmission financing, and permitting delays. She said the state and utilities are facing “historic investments” and argued changes in financing and oversight can reduce costs for ratepayers.

Key provisions described to the committee included: authorizing securitization of up to $15,000,000,000 of future undergrounding capital expenditures to replace higher-cost utility equity financing with lower-cost bonds; creating an optional public transmission financing program that could use about $325,000,000 in Proposition 4 funds and public-private ownership models to lower borrowing costs for new transmission; and deploying existing SERIP funds to help local jurisdictions expedite permitting for clean-energy projects.

Matt Friedman, staff attorney at The Utility Reform Network (TURN), testified in strong support and walked members through the financing logic. He said publicly financed or publicly owned transmission can access lower-cost debt—municipal bonds—relative to investor-owned utilities, and that the California Independent System Operator (CAISO) sees roughly $63,000,000,000 in new transmission need through 2045. Friedman said securitizing $15 billion of undergrounding costs “would save about $8,000,000,000” over 30 years and produce larger, front-loaded savings for customers.

Opponents and cautious stakeholders raised several concerns. The California Coalition of Utility Employees and labor representatives said liability and the cumulative effect of multiple bills changing utility revenue models require careful study. Utilities including SDG&E, PG&E and SCE registered opposition or said they were still reviewing recent amendments; SDG&E said its expected allocation of a $15 billion securitization would yield only marginal customer savings in the first year and warned that credit-rating or borrowing-cost impacts must be considered.

Committee members asked about the source of the $15 billion securitization figure, how public participation in transmission projects would be treated in the state27s wildfire liability fund, and whether reducing investor returns could unintentionally slow undergrounding or otherwise disrupt utility financing. The author and supporting witnesses said the bill requires any publicly financed projects to participate in the wildfire fund and pay proportionate contributions, and that past use of securitization (AB 1054 wildfire financing) did not slow investment.

Matt Friedman and the author argued that the bill would not prevent utilities from continuing to make large capital investments; instead, it substitutes lower-cost capital for a modest portion of projected spending. Erwin and supporters estimated AB 825 could produce roughly $2,000,000,000 in annual ratepayer savings if fully implemented, acknowledging the actual amount would vary by project participation and financial-market appetite for securitized debt.

The committee voted the measure out to the floor. Members said they intended to continue negotiations on liability, wildfire-fund participation, impacts on utility credit ratings, and the task force that would review the value of ratepayer-funded programs. The bill will be considered next on the Assembly floor, where further amendments and stakeholder negotiations are expected.