The Cost of Living Reduction Act of 2025.

Existing law, the California Global Warming Solutions Act of 2006, designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act requires the state board to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. The act requires the state board to adopt regulations to establish a market-based compliance mechanism, operative until January 1, 2031, as specified. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund.

Existing law also establishes the Milton Marks "Little Hoover" Commission on California State Government Organization and Economy (Little Hoover Commission) to promote economy, efficiency, and improved service in the transaction of the public business in the various departments, agencies, and instrumentalities of the executive branch of state government.

This bill, the Cost of Living Reduction Act of 2025, would require the Energy Commission and the PUC to post, and update monthly, dashboards on their internet websites that include the difference in average gasoline prices and the average total price of electricity or natural gas in California compared to national averages, and any California-specific taxes, fees, regulations, and policies that directly or indirectly contribute to higher gasoline and electricity or natural gas prices within the state, as specified. The bill would require the Energy Commission and the PUC, on or before July 1, 2026, to each submit a report to the Legislature on the governmental and nongovernmental drivers of California's higher gasoline prices and higher electricity and natural gas prices, and recommendations for policy changes to reduce the costs associated with those drivers, as specified. If the average price of gasoline in California exceeds 10% of the national average in the preceding quarter, the bill would require all taxes and fees on gasoline, as specified, to be suspended for a period of 6 months, and, if the average price of electricity or natural gas in California exceeds 10% of the national average in the preceding quarter, the bill would require the PUC to suspend the collection of all fees, as specified, charged on electricity and natural gas bills for a period of 6 months.

This bill would also require the State Air Resources Board, if the average price of gasoline, electricity, or natural gas in California exceeds 10% of the national average, to suspend the requirements of the cap-and-trade program, as defined, for a covered entity that is an oil refinery, electrical corporation, or gas corporation, and the collection of any money under the cap-and-trade program from those entities, for a period of 6 months, as provided.

This bill would require the Energy Commission to develop a rebate methodology to compensate Californians for the higher cost of gasoline, electricity, and natural gas compared to the national average, and, beginning with the 2026–27 fiscal year, in any year where the average prices for gasoline, electricity, or natural gas have exceeded the national average for those energy sources by more than 10% in the preceding 12 months, would require the Controller to provide rebates to households consistent with the methodology developed by the commission. The bill would establish the Cost of Living Reduction Fund and would require an amount necessary to fund the rebates, as specified, to be transferred from the Greenhouse Gas Reduction Fund to the Cost of Living Reduction Fund, the moneys in which would be continuously appropriated to the Controller for the purpose of making the rebate payments. By requiring the transfer of moneys into a continuously appropriated fund, the bill would make an appropriation.

This bill would require the Little Hoover Commission, on or before January 1, 2027, to study and report on the effectiveness of the methodology and approach in this act to produce cost savings and penalize the government for its role in contributing to the excessive cost of living, and on its application to other areas, as provided.

Existing law authorizes the PUC to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. Existing law requires the PUC, no later than July 1, 2024, to authorize a fixed charge for default residential rates on an income-graduated basis, as specified.

This bill would repeal the authorization for the PUC to adopt new, or expand existing, fixed charges, and would require the PUC to repeal a specified fixed charge established pursuant to a PUC decision. The bill would prohibit the PUC and the governing body of a local publicly owned electric utility from adopting new, or expanding existing, fixed charges on and after January 1, 2026.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.

Because certain provisions of this bill would be a part of the act and because a violation of a PUC action implementing its requirements would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.