After decades of taking it on the chin from public utility companies like PG&E and Southern California Edison, ratepayers scored a victory this legislative season.

On Saturday, Gov. Gavin Newsom signed Assembly Bill 1167, which ends using ratepayer funds for political lobbying, promotion, and other shareholder expenses. The new law also beefs up enforcement against investor-owned utilities that illegally spend ratepayer monies.

The California Ratepayer Protection Act goes into effect on Jan. 1, 2026.

“Every day I hear from constituents who are struggling to pay their skyrocketing utility bills, and today we have finally put an end to the use of ratepayer funds for political and promotional activities that really benefit IOUs and shareholders,” said the bill’s author, Assemblymember Marc Berman (D-Menlo Park), in a statement.

“It is unacceptable that (public utilities) like SoCalGas and PG&E, would use funds from hardworking Californians for anything other than providing safe and reliable service to their customers. Thanks to Governor Newsom signing my bill into law, we are providing relief for Californians and taking politics out of their utility bills.”

Investor-Owned Utilities Inflate Bills

Media investigations into California’s monopoly utilities have revealed use of ratepayer funds to cover millions of dollars in inappropriate expenses.

Investor-owned utilities have been inflating ratepayer utility bills, and using these funds on political lobbying efforts and promotional advertisement. All the while, Californians continue to struggle with the state’s high cost of living, made worse by the nation’s second-highest utility rates, Berman’s office said.

Utility Watchdogs React

A nonprofit watchdog, The Utility Reform Network, said the new law is a win for consumers.

“California residents are facing an unprecedented affordability crisis, and AB 1167 goes a long way to holding for-profit utility companies accountable to spending ratepayer money to benefit customers, not to fill shareholder pockets. We thank Governor Newsom for his leadership and look forward to continuing to work with him to achieve utility affordability and accountability,” said Mark Toney, executive director of TURN.

Said Matt Vespa, senior attorney for Earth Justice’s Right to Zero campaign: “For years, we’ve seen utilities slip millions of dollars in lobbying and promotional advertising costs into customer bills. Now, we’re establishing commonsense guardrails to protect Californians from utilities run amok. We’d like to thank Assemblymember Marc Berman for his vision and persistence to protect Californians in authoring this bill.”

With this law, California follows on the path marked by Connecticut, Colorado, and Maine, which have passed similar measures.