Sacramento, CA- Assemblymember Rhodesia Ransom introduced AB 2338, the FAIR Utility Rate Act, to rein in rising utility costs by requiring companies to justify rate increases that outpace inflation. The bill comes as new data from the Public Advocates Office shows residential electricity rates have climbed as much as 101 percent since 2014 — more than 2.5 times the rate of inflation — leaving more than 2.3 million households behind on their energy bills.
According to the U.S. Energy Information Administration, Californians pay among the highest electricity rates in the nation, at more than double the national average. AB 2338 requires investor-owned utilities to present a proposal that keeps spending in line with inflation and directs the California Public Utilities Commission (CPUC) to apply heightened scrutiny to costs that exceed this metric. It also directs the CPUC to consider the combined impact of multiple rate increases before approving additional costs.
“People are not dealing with one increase at a time. They are dealing with all of them at once. AB 2338 brings needed discipline to a process that has allowed costs to stack up on families without a full understanding of how it is impacting Californians.”
- Assemblymember Rhodesia Ransom
The impact of rising utility costs extends well beyond household budgets.
Farmers across the Central Valley rely on electricity to pump water, refrigerate crops, and run daily operations. As utility costs rise, those increases are passed on through higher food prices. Small businesses face similar pressure, with utility bills cutting into already tight margins and driving up the cost of goods and services across local economies.
Investor-owned utilities are typically allowed to earn returns of around 10 percent for shareholders, costs that are built directly into customer bills, reinforcing the need for greater discipline in how those dollars are spent. The Utility Reform Network (TURN), sponsor of the bill, stated: “It is time that utilities exercise greater discipline in how they spend ratepayer dollars. If ratepayers have to watch their monthly expenses and live within a budget, then it’s time for the utilities to tighten their belts as well.”
The Fighting for Affordable Informed Ratemaking (FAIR) Act reflects Assemblymember Ransom’s continued work to address rising costs for Californians and bring greater transparency to systems that directly impact people’s daily lives. The bill ensures that future decisions better reflect the realities facing families, workers, and small businesses across California.
AB 2338 has been referred to the Assembly Utilities and Energy Committee for consideration.
