Climate Action Bills Head to Governor Newsom’s Desk to Become Law

SACRAMENTO, CA  – California leaders sent a suite of climate action bills, some with bipartisan support, to Governor Gavin Newsom after a marathon session extending into Saturday afternoon. With the governor’s signature expected, the state continues its climate leadership by reauthorizing and updating the cap-and-trade program (rebranded as cap-and-invest) through 2045. In addition, the passage of a bill to enable a western electricity market is a major step toward a cleaner, more reliable, and more affordable energy future.

Improvements to cap-and-invest program per AB 1207 (Irwin) and SB 840 (Limón) include provisions to lower electric bills, adjust free allowances, and improve the integrity of offsets.

“Extending the cap-and-invest program is a necessary measure in the fight against climate change,” said Merrian Borgeson, California climate and energy policy director at NRDC (Natural Resources Defense Council). “The bills passed by the legislature affirm California’s global leadership, ensure the long-term viability of this program, improve the integrity of offsets, and provide utility bill relief when customers need it the most.”

In addition to directly reducing electric bills with cap-and-invest funds, another bill, SB 254 (Becker), makes substantive progress on reducing electricity prices by launching a transmission accelerator, improving the oversight and controls over utility wildfire-related spending, and requiring utilities to "securitize" $6 billion of utility wildfire-related spending.

“The true costs of California wildfires have far exceeded what anyone imagined,” Borgeson said. “By identifying the resources needed to pay for future wildfires and better managing these costs, Californians will be better prepared for our hotter future.”

The western grid integration bill, AB 825 (Petrie-Norris, Rivas, and Becker), enables California utilities to participate in a regional electricity market governed by an independent body, building on the broadly supported, multistate Pathways Initiative to strengthen grid coordination across the West.

"AB 825 allows California to join the West in sharing abundant and low-cost clean energy resources, while keeping strong protections for state authority and consumer interests,” said Kelsie Gomanie, an advocate for NRDC. “This landmark bill creates the opportunity to utilize the geographic and resource diversity of the western region to enhance electricity reliability, unlock deeper cost savings, and reduce reliance on fossil fuels. Today’s passage is a win for California and for the entire western region."

NRDC has been a longtime supporter of western grid regionalization. The Pathways Initiative enables independent governance and will allow for broader participation in CAISO’s newest western electricity market offering. A regional electricity market that includes California is projected to provide Californians with more than $1 billion in economic benefits annually, reduce in-state gas generation by nearly a third, and cut carbon emissions by more than 11 percent.

“While the Trump administration takes us backward, California will continue to address climate change, while improving affordability, because our lives and prosperity depend on it,” said Victoria Rome, California government affairs director at NRDC. “Lawmakers demonstrated that they can work together across the aisle for meaningful change and progress that are good for California families, businesses, and our natural environment.”

More details on the bills referenced above:   

• AB 825 (Petrie-Norris, Rivas, Becker): Empowers California to join a regional electricity market to more efficiently use our existing electricity infrastructure, which will save costs to ratepayers and enable California to use less polluting fossil fuel plants in the summer
• SB 254 (Becker, Wahab, Petrie-Norris): Reduces Californians’ electricity bills by forcing utilities to use smarter, cheaper financing tools while building out infrastructure, and extends the investor-owned utility Wildfire Fund to prevent price shocks to electricity customers and ensures 2025 Eaton Fire wildfire victims receive compensation for damages to their homes
• AB 1207 (Irwin, Rivas, Limón, McGuire): Extends and improves the cap-and-invest program to maintain California’s national leadership with achieving net-zero emissions by 2045
• SB 840 (Limón, McGuire, Irwin, Rivas): Improves the integrity of offsets used within the cap-and-invest program and provides strategic flexibility for revenues from the program in anticipation of future climate change investment needs, while continuing investments in transit, innovation and reducing air pollution.

NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law and people power to confront the climate crisis, protect public health and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Beijing and Delhi (an office of NRDC India Pvt. Ltd).