Bill to tie utility executive pay and PUC metrics to affordability advances amid utility concerns

Senator Becker told the committee SB 905 seeks to change the incentives shaping utility spending rather than the utilities’ operational duties. "It requires 20% of annual compensation for anyone VP or higher to be tied to keeping rates from rising faster than inflation," Becker said, describing the measure as a way to align executive pay with rate affordability.

The bill would also direct the Public Utilities Commission (PUC) to develop clear performance metrics covering reliability, utilization, greenhouse‑gas reductions and wildfire response, and to explore alternative financing tools such as securitization to reduce ratepayer costs. Becker said the measure is intended to change the financial incentives that drive investments and to encourage utilities to use existing infrastructure more fully before proposing expensive new projects.

Supporters from consumer and environmental groups — including The Utility Reform Network and the Climate Center — called the bill a bold approach to addressing long‑term affordability. "This bill addresses the affordability crisis through a series of long term accountability and cost reduction measures," said Matt Friedman, a senior attorney at The Utility Reform Network.

Investor‑owned utilities and business groups urged caution. Bradenton England of Southern California Edison opposed the bill as drafted, arguing that assigning reduced returns on equity on an application‑by‑application basis is inappropriate and risks destabilizing enterprise‑level financing decisions. The California Chamber of Commerce and major utilities warned that arbitrary statutory preferences around financing could raise borrowing costs and have unintended affordability effects.

Committee members pressed for clarifications. The author and staff said amendments narrow the directive to the PUC so the commission must consider, and issue written findings before adopting any return‑on‑equity adjustments. Several members expressed continued concern about balancing affordability with utility creditworthiness and wildfire risk.

What’s next: The committee accepted amendments and placed the item "on call" so absent members could add votes. The author said he would continue working with stakeholders on the bill’s financing and ROE language.