Climate Action is Turning Green to Gold for Californians

By Lauren Navarro and Emily Reyna

What would you do with extra cash? Starting this April, customers of California’s biggest utilities will experience first-hand how the state’s fight against climate change is actually paying off – in the form of real money.

Wait… real money? How does that work?

Source: Flickr/Mike Schmid

Source: Flickr/Mike Schmid

Yes. Millions of household customers of Pacific Gas & Electric, San Diego Gas & Electric, Southern California Edison, and other investor-owned utilities will automatically receive a “Climate Credit” twice a year through 2020 – every April and October – as a line item on their utility bill. This money comes from California’s cap-and-trade program, which holds the state’s largest emitters, including electric utilities, accountable for their climate pollution. With cap and trade, regulated companies must buy “allowances,” or permits, if they plan to emit carbon pollution –equivalent to nearly $1.7 billion to date. Now, part of this money is being returned to these utilities’ customers. For average Californians, the Credit will cover the slightly higher rates that cover California’s green transformation. But if you’re conscientious about your energy use – and are a below average energy user – your Credit will be a bonus for you.

The Climate Credit is one way Californians are benefiting from the state’s action on climate and it will help people participate in building a clean energy economy. This smart policy builds on years of people-focused efforts, like energy efficiency standards and clean energy installations. In fact last year California more than doubled its rooftop solar capacity to 2,000 MW of power.

In California, we spend less overall on energy because we use it wisely and waste less, even though we pay more per unit of electricity.  In fact, while the state is ranked 8th in average cost of electricity (cents/kWh), we rank 47th in total energy expenditures per capita.

The exact amount each household will be credited varies based on the utility and its costs in complying with cap and trade, but eligible customers will receive an average of $70 this year, which is expected to increase over time.

Household Credit
April and October Electricity Bills
Electric Bill ProviderCredit Applied to Bill in 2014
Pacific Power$194.37
Liberty Utilities$41.60
Source: CPUC

Californians can use their climate credit in any way they’d like. But given the commitment so many have to protecting California’s air quality, natural beauty, and fighting climate change (as evidenced by the recent trend of more Californian’s biking and using public transit to get around), we wanted to share some ways to invest in our environment and save money along the way. Energy Upgrade California is encouraging residents to use the Climate Credit for energy-saving home upgrades like more efficient light bulbs or appliances. And these types of investments save money in the long term.

So… the not-so-hypothetical question: what would you do with $70 a year?

For example, a programmable thermostat can cost as little as $25, and, if used properly in combination with a well-designed time-of-use rate, can save hundreds of dollars a year in reduced utility bills.

The Energy Upgrade California website has a host of ideas listed here [PDF].

No matter how we spend this credit, one thing is for sure: the Climate Credit is part of California’s down payment for healthier and cleaner communities. We know there’s more work to be done to achieve our long-term emissions reduction goals, but this is the first of many steps that will pay dividends to the future health and economic prosperity of California.

For more information about California’s Climate Credit visit:

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