CITY ATTORNEY
Sonia R. Carvalho
CITY MANAGER
Alvaro Nuñez
CITY CLERK
Jennifer L. Hall
20 CIVIC CENTER PLAZA - P.O. BOX 1988, M31 - SANTA ANA, CALIFORNIA 92702 TELEPHONE (714) 647-6900 - FAX (714) 647-6954 - www.santa-ana.org
Councilmember Requested Item Report
DATE
July 7, 2026
TOPIC
Southern California Edison Rate Affordability and State Legislative Reform
COUNCILMEMBER-REQUESTED ITEM TITLE
Discuss and Consider Directing the City Manager and City Attorney to Prepare a Resolution in Support of State Legislation to Lower Southern California Edison Rates and Protect Ratepayers and Evaluate Potential Intervention in California Public Utilities Commission Proceedings on Behalf of Santa Ana Residents
DISCUSSION
Background
Southern California Edison (SCE) rates have more than doubled since 2016. Ten new SCE rate increases are currently pending before the California Public Utilities Commission (CPUC). Today, one in five SCE households is behind on their electric bill by an average of $829, reflecting a growing and unsustainable debt crisis across the communities SCE serves. In 2025, SCE’s parent company, Edison International, reported $4.9 billion in profit, even as the utility was found responsible for the Eaton Fire, which killed 19 people and destroyed thousands of homes in Altadena and surrounding communities.
The primary driver of these escalating bills is structural. Under the rate-of-return regulatory model, investor-owned utilities like SCE generate profit primarily by building and expanding physical infrastructure, including poles, wires, substations, and related equipment. State regulators allow utilities to charge ratepayers the full cost of construction plus a guaranteed return on investment of approximately 10 percent per project, for years into the future. This creates a perverse incentive: the more a utility spends, the more it earns. Critics and regulators have long noted that this model encourages “gold-plating”: the practice of selecting more costly infrastructure solutions over more efficient alternatives because larger capital expenditures generate larger profits. This approach leaves ratepayers to foot the bill with no meaningful check on unnecessary spending.
Santa Ana residents are directly and disproportionately affected by these structural problems. As a community with a high proportion of working families and renters, the burden of rising utility costs falls on the households least able to absorb them. The CPUC’s own data confirm that utility debt and the share of customers qualifying for bill assistance programs have both grown significantly in recent years.
Councilmember Requested Item – Southern California Edison Rate Affordability and State Legislative Reform
CITY ATTORNEY
Sonia R. Carvalho
CITY MANAGER
Alvaro Nuñez
CITY CLERK
Jennifer L. Hall
20 CIVIC CENTER PLAZA - P.O. BOX 1988, M31 - SANTA ANA, CALIFORNIA 92702 TELEPHONE (714) 647-6900 - FAX (714) 647-6954 - www.santa-ana.org
State Legislative Reform Package
The California Legislature is currently considering a package of bills during the active 2025–2026 regular session, with a floor vote deadline of August 31, 2026, that would address the structural causes of high utility bills. On June 16, 2026, the San Diego City Council voted unanimously to endorse ten of these bills (Exhibit A), making Santa Ana an opportunity to join a growing coalition of California cities formally on record in support of ratepayer reform.
Collectively, the bills in this package are designed to:
Cap utility profits by tying allowable shareholder returns to objective benchmarks rather than open-ended rate-setting proceedings.
Curb overspending by requiring upfront CPUC approval before utilities draw on certain funding accounts, and mandating independent audits of wildfire mitigation expenditures before additional funds are approved.
Increase transparency by requiring public disclosure of the data and methodologies utilities use to calculate rates and fees, including the Power Charge Indifference Adjustment. Protect families immediately by requiring large data centers to fund their own grid upgrades rather than shifting those costs to residential ratepayers. Modernize the energy system by streamlining access to small-scale solar, enabling home batteries and EVs to function as virtual power plants, and supporting in-state manufacturing of grid components.
Below are the 14 bills included in the legislative package.
1. AB 2338 (Ransom): Requires utilities to justify any General Rate Case increase that exceeds the annual Social Security Cost of Living Adjustment, placing the burden on the utility rather than ratepayers to demonstrate the need for above-inflation rate hikes.
2. AB 2463 (Petrie-Norris): Directs the CPUC to conduct a comprehensive review of the methodologies used to determine the cost of capital and authorized return on equity for electrical and gas corporations, bringing greater consistency and ratepayer protection to the rate-setting process.
3. SB 905 (Becker): Reduces shareholder profits on safety investments, expands access to low- cost public financing of capital projects, ties executive compensation to reducing rate increases, and improves overall grid performance.
4. AB 1677 (Boerner): Caps the return on equity that investor-owned utilities may earn by tying the allowable shareholder profit limit to the long-term U.S. Treasury bond rate plus four percent.
5. SB 1098 (Perez): Limits the use of balancing and memorandum accounts—funding mechanisms that allow utilities to spend now and seek ratepayer reimbursement later—by channeling more spending decisions into the General Rate Case process where they are subject to public scrutiny.
6. AB 1774 (Boerner and Harabedian): Requires independent audits of utility wildfire mitigation spending before the CPUC approves additional wildfire-related expenditures, ensuring funds previously allocated have been properly spent and accounted for.
7. SB 868 (Wiener): Eliminates regulatory barriers for small plug-in and balcony solar devices by reclassifying them as household appliances exempt from utility interconnection requirements, making clean energy more accessible to renters and those without rooftop solar.
8. SB 943 (Becker): Directs the CPUC to develop a more equitable methodology for calculating high-voltage transmission charges and authorizes rate adjustments for industrial customers who switch to clean electricity, supporting decarbonization while controlling costs.
9. AB 1761 (Rogers): Requires the CPUC and investor-owned utilities to publicly disclose all data and methodologies used to calculate the Power Charge Indifference Adjustment (PCIA), Councilmember Requested Item – Southern California Edison Rate Affordability and State Legislative Reform
CITY ATTORNEY
Sonia R. Carvalho
ACTING CITY MANAGER
Alvaro Nuñez
CITY CLERK
Jennifer L. Hall
20 CIVIC CENTER PLAZA - P.O. BOX 1988, M31 - SANTA ANA, CALIFORNIA 92702 TELEPHONE (714) 647-6900 - FAX (714) 647-6954 - www.santa-ana.org
a fee charged to customers who switch to community or self-generated power, to identify billing errors and improve accountability.
10. SB 1138 (Padilla): Gives load-serving entities flexibility to meet up to 25 percent of their resource adequacy obligations through short-term market transactions rather than costly long- term contracts, reducing unnecessary procurement costs that are otherwise passed to ratepayers.
11. SB 1359 (Stern): Directs the CPUC to create a standardized methodology for forecasting gas demand to support the managed wind-down of unnecessary gas infrastructure, and prohibits utilities from charging customers for avoidable gas leaks.
12. AB 2516 (Petrie-Norris): Establishes the California Grid Manufacturing Initiative to aggregate state demand, coordinate procurement of critical grid components such as large transformers, and incentivize in-state manufacturing—allowing bulk purchasing savings currently foregone by utilities acting independently.
13. SB 886 (Padilla): Requires data centers to bear the full upfront cost of new transmission and distribution infrastructure and energy procurement needed to serve their operations, preventing those costs from being shifted to residential and small commercial ratepayers.
Proposed Resolution
This item requests that the City Council direct staff to prepare and agendize a resolution of the City Council formally supporting this legislative package. A formal resolution would place the City of Santa Ana on record in support of ratepayer protection before the Governor, the Legislature, and the CPUC, and would signal the City’s legislative priorities on utility affordability and oversight. Transmitting the resolution to State representatives and the Governor’s office, as similar to how the City of San Diego’s resolution directed, would ensure it is made part of the official record of support for these bills during the critical remaining months of the legislative session.
Potential Intervention in CPUC Proceedings
Cities may seek party status in CPUC proceedings pursuant to the Commission's Rules of Practice and Procedure and are expressly recognized as potential participants under the Public Utilities Code's intervenor framework (see Pub. Util. Code §§ 1701, 1802(d)). While SCE's 2025 General Rate Case (Application A.23-05-010) was resolved by CPUC decision in September 2025, authorizing base revenue requirement increases of $544 million in 2026, $522 million in 2027, and $447 million in 2028, increases that are now being passed through to Santa Ana residents' bills, SCE has continued to file additional rate increase applications before the Commission since that decision. Those subsequent proceedings represent potential opportunities for the City to seek party status and formally advocate for Santa Ana ratepayers before the CPUC.
This item requests that the City Attorney evaluate which active SCE proceedings, if any, would be appropriate for the City to join; assess the applicable procedural requirements and deadlines; and report back to the City Council with findings and a recommendation, including the resource implications of participation.
Conclusion
Rising electric utility rates represent a direct and growing burden on Santa Ana families. While this item focuses on SCE as the primary electric utility serving Santa Ana, many of the structural reforms in this legislative package—including those addressing CPUC rate-setting methodology, utility overspending, and ratepayer accountability—would benefit customers across investor-owned electric and gas utilities statewide. A formal resolution of support and, if appropriate, participation in CPUC Councilmember Requested Item – Southern California Edison Rate Affordability and State Legislative Reform
CITY ATTORNEY
Sonia R. Carvalho
CITY MANAGER
Alvaro Nuñez
CITY CLERK
Jennifer L. Hall
20 CIVIC CENTER PLAZA - P.O. BOX 1988, M31 - SANTA ANA, CALIFORNIA 92702 TELEPHONE (714) 647-6900 - FAX (714) 647-6954 - www.santa-ana.org
proceedings would position Santa Ana as an active advocate for its residents on one of the most pressing affordability issues facing the community today.
SUBMITTED BY
Councilmember Jessie Lopez
EXHIBIT(S)
1. City of San Diego Draft Resolution in Support of Utility Affordability and Accountability Legislation, 2025–2026 Session (unanimously adopted by the San Diego City Council on June 16, 2026)
lolì
1 - 1 00
(R - 2 0 2 6 - 52 1 )
R ESOLUTIONN UMBERR -316829
D A T E O F F IN A L P A S S A G E JU N 1 8 2 0 2 6
A R ESOLUTION OF THE COUNCIL OF THE CITY OF
SAN DIEGO SUPPOR TIN G CALIFOR NIA SEN ATE BILLS
90 5, 1 0 98 , 9 43 , 1 1 3 8 , 1 3 59 , A N D 91 3 A N D ASSE M BLY BILLS 2 46 3 ,1 761 ,2 51 6 , A N D 2 493 R ELA TIN G TO U TILITY
AFFOR DABILITY AND ACCOUNTABILITY FOR THE
2025- 2 02 6 CALIFOR NIA LEGISLATUR E R EGULAR
SESSION.
R ECITALS
T he C ouncil of the C ity of San Diego (C ouncil) adopts this R esolution based on the f ollowing:
A . R ising utility rates in C alif ornia continue to increase the cost of living f or millions of residents. Between 2 0 2 0 and 2 0 2 5, residential rates f or the three largest investor- owned utilities increased at a rapid pace, f ar exceeding infation. Pacif ic G as and E lectric Company rates increased by an average of 1 3 .3 % annually, Southern C alif ornia E dison by 1 2 .3 %, and San Diego G as & E lectric C ompany (SD G &E ) by 9.1 %. In D ecember 2 0 2 4, the C alif ornia Public U tilities C ommission (C PU C ) authorized an additional 1 8 % revenue requirement increase f or SDG&E.
San D iego C ounty currently maintains the highest electricity rates in the nation, with costs reaching $0 .45/kWh, approximately 2 .5 times above the national average, and an average monthly residential bill of $3 1 3 . A ccording to 2 0 2 4 and 2 0 2 5 C PU C reports, SD G &E maintains the highest electricity rates in the state, and utility debt in the region has increased by over $2 0 0 million since 2 0 2 1 , with nearly 3 0 % of customers now qualif ying f or bill assistance programs.
B . T he f ollowing proposed legislation, currently pending in the 2 0 2 5- 2 0 2 6 C alif ornia L egislature R egular Session in both the Senate and A ssembly (collectively, U tility Af f ordability and A ccountability L egislative Package), aim to lower utility costs and hold investor- owned utility companies accountable:
-PAGE 1 OF 4-
(R - 2 0 2 6 - 52 1 )
1 . Senate B ill 9 0 5, as amended June 1 , 2 0 2 6 , seeks to reduce utility prof its on wildf ire investments, expand options f or low- cost public f inancing of capital projects, tie executive pay to reducing rate increases, and improve grid capacity. 2 . Senate Bill 1 0 98 , as amended March 2 4,2 0 2 6 , limits the use ofbalancing and memorandum accounts to bring more spending decisions into G eneral R ate C ases, reducing unlimited corporate overspending.
3 . Senate B ill 9 43 , as amended M arch 2 3 ,2 0 2 6 , directs the C PU C to develop a more equitable methodology f or calculating high- voltage transmission charges and authorizes rate adjustments f or industrial customers who switch to clean electricity.
4. Senate B ill 1 1 3 8 , as amended A pril 9 ,2 0 2 6 , gives load- serving entities f lexibility to meet up to 2 5% ofresource adequacy obligations through short- term transactions, reducing unnecessary procurement costs passed to ratepayers.
5. Senate B ill 1 3 59 , as amended May 1 4, 2 0 2 6 , directs the C PU C to rigorously review gas inf rastructure investments over $1 0 , 0 0 0 , 0 0 0 to ensure non- gas pipeline alternatives are prioritized, and f orces developers instead o f ratepayers to pay all upf ront costs f or new natural gas line extensions starting in 2 0 3 0 . 6 . Senate B ill 91 3 , as amended May 1 4, 2 0 2 6 , proposes several policy changes to authorize and expand the use of aggregated distributed energy resources to satisf y resource adequacy requirements.
7. A ssembly B ill 2 46 3 , as amended A pril 1 3 , 2 0 2 6 , requires the C PU C to conduct a comprehensive, systemwide review o f methodologies used to determine the cost of capital and authorized return on equity f or electrical and gas corporations to bring greater consistency and ratepayer protection.
-PAGE 2 OF 4-
(R - 2 0 2 6 - 52 1 )
8 . A ssembly B ill 1 76 1 , as amended March 1 9, 2 0 2 6 , requires the C PU C and investor- owned utilities to publicly disclose all data and methodologies used to calculate the Power C harge Indiff erence A djustment to identif y billing errors.
9. Assembly Bill 2 51 6 , as amended A pril 1 3 ,2 0 2 6 , establishes the Calif ornia G rid Manuf acturing Initiative to aggregate demand, coordinate procurement of critical grid components, and incentivize in- state manuf acturing.
1 0. A ssembly Bill 2 49 3 , as amended A pril 1 3 ,2 0 2 6 , helps prevent utility overspending by increasing independent oversight of transmission projects and enabling lower- cost alternatives instead of expensive inf rastructure build outs.
C. C ollectively, passage ofthe U tility Af f ordability and Accountability Legislative Package will help lower costs, ensure f air electricity pricing, and advance equitable and af f ordable energy f or residents across the state.
D. The C ity of San D iego's (C ity) support f or the U tility A ff ordability and A ccountability Legislative Package is consistent with previous actions by the Council to ensure accountability by investor- owned utilities and reduce rates f or San Diegans. For example, in N ovember 2 0 2 3 , the Council adopted San D iego R esolution R - 3 1 52 1 4 (N ov. 1 4,2 0 2 3 ) calling on the C PU C to implement improvements to oversight of gas and electric rates.
E . The Off ice of the C ity A ttorney prepared this R esolution based on the inf ormation provided by C ity staff , including inf ormation provided by af f ected third parties and verif ied by C ity staf f , with the understanding that this inf ormation is complete and accurate. -PAGE 3 OF 4-
(R - 2 0 2 6 - 52 1 )
ACTION ITEMS
B e it resolved by the C ouncil ofthe C ity of San D iego:
1 . T he C ouncil declares its full support f or the U tility A ff ordability and A ccountability L egislative Package, as ref erenced in R ecital B. 2 . T he C ouncil requests the C ity's G overnment A f f airs D epartment staf f transmit this R esolution to the C ity's state lobbyists and other appropriate individuals to ensure this R esolution is received by state representatives and made part of the of f icial record of support f or the U tility A ff ordability and A ccountability L egislative Package, as ref erenced in R ecital B.
A PP R O V E D IE A T H E R F E R B E R T , C ity A ttorney l el43By
Alm a R obbins
D eputy C ity A ttorney
A R :nja
A pril 2 3 ,2 0 2 6
O r. Dept: C ouncil District - 9
Doc. No. 4406721
I certif y that the C ouncil of the C ity of San D iego adopted this R esolution at a meeting held on JU N I 6 2 0 2 6
DIANA J.S. FUENTES
City Clerk
puty C ity C l k
A pproved:
G llý( 1
(date) TO D D G L O R IA, Mayor
Vetoed:
(date) TO D D G LO R IA , Mayor
-PAGE 4 OF 4-
JU N 1 6 2 0 2 6, by the f ollowing vote:P assed bythe C ouncil of T he C ity of S an D iego on Councilmem bers Yeas
N ays
N ot Present R ecused
Joe L aC ava
Jennif er C ampbell
S tephen Whitburn
H enry L . F oster 1 1 1
M arni von Wilpert
Kent L ee
R aul A . C ampillo
Vivian Moreno
Sea n Elo-R ivera
0. JU N 1 8 2 0 2 6
D ate of f inal passage
(Please note: When a resolution is approved by the M ayor, the date of final passage is the date the approved resolution was returned to the O f fice of the C ity C lerk.) AU THEN TICA TED B Y:
TODD GL OR IA
M ayor of T he C ity of S an D iego, C alif ornia.
(Seal)
DI AN A I.S. FUEN TE S
C ity C lerk of T he C ity of S an D iego, C alif ornia.
B y , D eputy
U
O f f ice of the C ity C lerk, S an D iego, C alif ornia R esolution N umber R - 31 G629