Tom Steyer has vowed to overhaul the state’s electricity system, which he said could save the state and ratepayers billions of dollars and cut rates by 25%.

In an exclusive interview Wednesday morning, the San Francisco Democratic gubernatorial candidate revealed his plans to GV Wire.

He also discussed a host of other issues.

Utility Rate-Cut Plan

In a nine-page plan, Steyer outlined how he would cut rates and change a system in which private companies provide electricity to California customers.

“We’re going to change the way the Public Utilities Commission oversees and regulates these monopolies. It’s a very perverse incentive. They get paid for making capital expenditures that the Public Utilities Commission permits, and then you get a guaranteed 10 percent return on those capital expenditures,” Steyer said.

Steyer said companies fail to fully use their grid — operating at only 35% — and do not use cheaper forms of electricity. His plan would increase grid usage and invest in batteries, microgrids, and rooftop solar rather than substations and transmission lines.

Using information technology would increase grid usage to at least 60%, Steyer said, while still allowing protection against brownouts and blackouts.

“Do they want to use it? No, because what they want to do is to rebuild the grid for tens of billions of dollars, which goes into the rate base, which means that they earn 10% on that money,” Steyer said.

Steyer would cut guaranteed rates of return by at least 2%, which his plan said “would put hundreds of dollars every year back in the pockets of households.”

More Solar Powering Local Grids

He is also calling for more local competition.

“We have a lot of flat roofs in the state of California. We need to have people putting solar on that, providing electricity for themselves and having localized grids. That’s just the truth. There’s no reason that can’t happen. What that means is there’ll be an opportunity for people to compete, to offer electricity at a lower price, which is going to push the electric monopolies to lower their prices,” Steyer said.

He would not mandate putting solar on new homes but make it “a good deal for people.”

Steyer said he would change the incentive structure for utility companies.

“We’re going to change what they get paid for. And we’re going to change so that they have an incentive to do the things that will produce cheap electricity as opposed to doing things that produce expensive electricity, which has been the system that’s been in place for a hundred years. Their incentives are to produce expensive electricity and not be careful about fire. And that’s just wrong,” Steyer said.

Incentives would include offering lower prices, using more of the grid, and quicker connections to the grid.

Steyer would finance projects with public bonds. He claims that public-private financing can save the state $3 billion a year, citing a study from the Clean Air Task Force. He did not provide an exact amount the public portion would be.

PUC Appointments

The plan prioritizes wildfire safety “before big new capital expenditures, dividend payouts, and bonuses to executives.”

Steyer expects PUC vacancies next year when the new governor takes office.

“I will make sure these vacancies are filled by people who will counteract utility lobbyists and protect ratepayers,” his plan said.

Steyer also supports a plan to ban utility contributions to candidates.

Data Centers ‘Pay Their Own Way’

Steyer’s plan would make data centers “pay their own way.” There is concern about how much energy these centers use.

“Data centers are a key driver of progress in artificial intelligence, and we are proud that AI breakthroughs are happening in California,” Steyer said. “At the same time, the companies building these data centers are some of the wealthiest and best-funded companies in the world.

“It is entirely reasonable to demand that they pay their own way — and avoid raising household bills. They must be transparent upfront about the water, energy, and other impacts that their operations could have on surrounding communities.”

Steyer on Housing Crisis, Swalwell Allegations

Last week, several candidates for governor appeared at a forum at Fresno State. Most called for deregulation at some level to build more homes, increase energy production, and deliver more water. Steyer’s stance depends on what the specific policy looks like.

“The permitting policies in California are overlapping, duplicative, time-consuming, and expensive, and we absolutely have to do a better job,” Steyer said. “It really is a question of how deep do you understand this so you can come up with a solution that actually works.”

Steyer called for “simplified regulations” for homebuilding. Adding supply is one of the key tenets of his campaign.

He said reducing risk — such as clearing brush and debris around homes — can decrease home insurance rates, especially in fire and mountain zones.

“We need to protect ourselves and change the risk. And then the governor has to go to the insurance companies and insist they take into account the way that they write insurance,” Steyer said.

Rep. Eric Swalwell, D-Livermore, another top contender for governor, recently denied allegations of sexually harassing staff. Steyer responded.

“I don’t have any insight into that. That is a process that’s playing out. “My job is really just to do what I did last night (at a town hall in Fresno) and look in the eye of as many Californians as I can, listen to what is worrying them, listen to what they need, listen to their problems, and try to be responsive and convince them that I’m the governor who represents them without any conflicts,” Steyer said.