California Residents to Get Utility Credits This Month

California’s landmark AB 32 is about to pay off in a big way for residents. The bill, which established a cap and trade system for the state, also created the California Climate Credit, a payment received by customers of investor-owned utilities like Southern California Edison and Pacific Gas & Electric. Utility customers including residents and small business owners alike will be receiving a $30-$40 credit on April’s utility bill, and another in October.

Good news for those of us who like a little instant rebate on our energy bills! But where is this money coming from, and how does AB 32 work?

Passed in 2006, the bill mandates the state to bring its emissions levels back to 1990-era level by 2020, resulting in around a 30 percent decrease from our current peak. The state is accomplishing the move by setting a limit or cap each year on how many emissions large polluters can generate, and creating credits polluters can buy on an exchange, allowing them to essentially buy pollution indulgences. Or, in more technical terminology, trade. So far, the California Air Resources Board has generated $1.7 billion in revenue from these sales, and now, it’s time to put that money to work.

Roughly 40 percent of it is already earmarked for clean energy investments with the goal of reducing waste in the electricity generation process, because electricity is a major contributor to pollution in the state. The rest of it, though, is going directly to energy consumers. Individuals and small businesses are eligible for the credits, which are distributed on the basis of utility and region rather than energy used. Businesses will get their credits monthly, while consumers will get two big credits annually.

How people choose to use their savings is up to them. They could just celebrate having a little off their April and October utility bills, which can be a big deal, especially for low-income Californians who have trouble meeting basic needs. Or they could reinvest their savings, which is what the state is hoping they do. Residents who invest in LED bulbs, smart thermostats and other energy-saving tools can help contribute to the state’s goal of reducing pollution and save money on future energy bills without help from the energy credit system.

Motorists should watch out, though. Next year, gas prices will start going up thanks to the inclusion of fuels in the cap and trade system. That’s good news for the environment, but bad news for your gas bill, as fuel costs may go up by as much as 12 cents. All that money saved on electricity might be balanced out by the costs of car ownership…and now might be a good time to start seriously thinking about a high efficiency or electric vehicle that will help you get where you need to go.

Better yet, how about lobbying for some better public transit in your area so you can ditch the car altogether?

Photo credit: Chris Potter, and StockMonkeys.com.

75 comments

Carrie-Anne Brown
Carrie-Anne Brownabout a year ago

thank for sharing :)

Warren Webber
Warren Webberabout a year ago

Live long and prosper!

JOSE H.
JOSE Honr2 years ago

Good to know. Thanks.

Artatchapelview Artwork

thanks

Mary T.
Mary T.2 years ago

thanks for the article...just paid my PG&E bill...its was only $34 this month, happy for the $30 credit

KAREN G.

Thanks for sharing

Donna F.
Donna F.2 years ago

so that's why I'm getting a credit. ty for the article explaining this.

Lynn C.
Lynn C.2 years ago

noted

A F.
A F.2 years ago

thank you

Beverly C.
Beverly C.2 years ago

Congratulations, Good Job, California!!!