Starting in April, millions of California households will received a $30 to $40 climate credit on their electricity bills. On Monday the California Public Utilities Commission (CPUC) and California Air Resources Board made the announcement, which is part of California’s broader effort to reduce greenhouse gas emissions and promote clean energy. The state has implemented a carbon cap-and-trade program on large emitters and is requiring one-third of electricity generation to come from renewable sources by 2020. California passed the Global Warming Solutions Act, or AB32, in 2006 which requires the state to reduce greenhouse gas emissions to 1990 levels by 2020.
The payments are meant to help offset expected increases in electricity and gas prices due to the cap-and-trade program and to ensure that electricity rates reflect the cost of pollution while protecting customers from potential price hikes.
“The Climate Credit is made to households and small businesses to promote a cleaner, more energy efficient California, giving millions of Californians a stake in the fight for clean air and a healthy environment,” said CPUC President Michael R. Peevey in a statement. “By investing their Climate Credit in simple items to improve energy efficiency — like LED lights or smart thermostats — consumers and businesses can save energy, reduce costs, and join with the State of California to fight climate change.”
In 2012, CPUC voted to rebate a majority of the proceeds from the cap-and-trade program to the state’s three investor-owned utilities — Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric — which supply more than two-thirds of the state’s electricity. Consumers will start feeling those benefits, which will appear as line items on utility bills, starting in April. Every household within a utility’s service area will recieve the same rebate regardless of how much electricity they use. This avoids penalizing those who choose to conserve energy as well as providing the most benefit to low-income households that are forced to spend a larger percent of their income on electricity bills.
Small businesses are not left out of the deal, and will receive a monthly credit based on how much electricity they use. These customers include commercial, industrial and agricultural clients as well as nonprofits and schools that use less than 20 kilowatts of electricity each month.
“What we’re hoping for is to engage ratepayers in the effort to fight climate change,” Mary Nichols, chairwoman of the California Air Resources Board, the state agency that created the cap-and-trade system, told the San Francisco Chronicle. “It’s about enlisting more soldiers in the fight.”
For a more comprehensive look at the program and how it can be used to save money and energy, as well as to determine which utilities serve what areas, visit the state’s energy upgrade website.