SB 332: A Very Big Deal

California DSA members will be among those marching on the state capital on April 24th to abolish Pacific Gas & Electric. Protesters plan to pack an 11 AM California Public Utilities Commission (CPUC) meeting at 1516 Ninth Street in Sacramento, then rally on the Capital Mall at 2:30.

California Red readers understand already that decisions by private utility executives determine who among us will enjoy reliable, life-sustaining service—and who will be burned alive in utility-ignited firestorms. PG&E has been a long-time target of protests by DSA members and others, but this could be the year when we finally pivot from protest to actually breaking the utility’s god-like grip on our power supply.

The Investor-Owned Utility Act (SB 332) would immediately curb PG&E’s many corporate abuses that have impaired service reliability, inflated customer rates, and criminally endangered public safety. But equally important, SB 332 carefully lays the groundwork for replacing PG&E and other Investor-Owned Utilities (IOUs) with a “not-for-profit” public utility. 

 This is a very big deal.

Anytime your utility pleads guilty to 84 criminal counts of homicide—as PG&E did in 2020 after its equipment burned down the town of Paradise—it’s pretty clear you have problems. To deal with some of the most immediate ones, SB 332 would require annual audits of utility equipment, speed up “undergrounding,” and replace equipment that has outlived its usable life in high fire-risk areas. SB 332 would also: 

• Prohibit the shut-off of utility service for vulnerable ratepayers to ensure their health and safety needs are met.

• Require prompt action to cap IOU rate increases for residential customers to no more than the basic inflation rate.

• Tie executive compensation to meeting specific safety goals.

The structural problem

So far, so good. But SB 332 also addresses the deeper, structural problem with IOUs: When utility shareholders pocket their profits, there is less money available to meet the needs of customers. Utilities can’t print money.  When shareholders skim profits and top executives award themselves fat bonuses, there is less money to provide service. Broadly speaking, the utility’s options at that point are to sacrifice reliability, compromise on safety, seek higher rates--or all three.

SB 332 solves this problem by creating a not-for-profit utility where shareholder profits—and executive bonuses tied to those profits—don’t exist because the utility’s sole allegiance is to customer service, and to the skilled workforce that is essential to providing it.

SB 332 states the problem succinctly:

Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.

Can the Legislature really do this? Yes! Article 12 of the California Constitution says private corporations providing power to the public are “public utilities subject to control by the Legislature.” The Legislature took the first step down this path in 2020 by creating Golden State Energy when PG&E was in bankruptcy and its future looked shaky. An alternative now existed—if only on paper. SB 332, introduced this February by State Senator Aisha Wahab, takes the next step by providing a blueprint and timeline for a real-world transition from PG&E to GSE.

Analysis and implementation

Here’s how it would play out: 

The California Energy Commission by June 30, 2026 will create a Study Team to perform a comparative analysis—and an implementation plan for replacing PG&E with a successor not-for-profit utility. By December 31, 2026 the Study Team will select an Advisory Council to represent diverse constituencies, including:

• Labor unions

• Tribal interests

• Low-income residential ratepayers

• Wildfire survivors

… along with experts in equitable rate design, distributed energy resources, and grid architecture, as well as experts in justice issues: environmental, energy, utility, racial and economic.

The Energy Commission, through a public process, will vote on the recommended successor utility by September 30, 2028. The Commission, again through a public process, will vote by October 31, 2029 on approving the implementation plan.

SB 332 gives the Study Team broad powers, including access to books, records and documents “of any nature” from the Energy Commission, from the Public Utilities Commission, and from the IOUs themselves. 

Legislators want to know if the successor utility is likely to achieve certain policy objectives, including:

• A demonstrable reduction in electricity costs for customers over a 30-year period.

• Increased transparency and accountability in governing structures, financial spending, and infrastructure decisions.

• Maintaining pensions and increasing benefits for utility workers, as well as increasing “good union jobs and inclusive workforce development” in the region.

Protecting workers during the transition

Wisely, SB 332 is acutely sensitive to the need to protect workers during the transition process. It directs the Study Team’s feasibility assessment to “safeguard or strengthen” worker benefits—including union protections—during and after the transition period, and to provide for workers’ rights and “a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.”

By no later than 2032, SB 332 wants to “safely decommission” any unsafe and polluting infrastructure that is transferred to the successor utility. SB 332 also aims to decommission gas infrastructure and transition toward electrification—an important environmental priority in the era of climate change. 

Squaring the priority of safe, reliable and clean electric service with the priority of affordable rates is a huge task. Replacing PG&E is going to cost money. But leaving things the way they are also costs money—a lot of it. Gas explosions are expensive. Wildfires can be fantastically expensive. Damage from interrupted service, while less visible, is also expensive. SB 332 suggests financing mechanisms to help us invest in avoiding disasters rather than face the far greater costs of cleaning up after them. 

Electricity is the foundation of modern American life. SB 332 is designed to give us—the public—substantive control of our utility service—a chance to push back against exorbitant rate hikes and corporate wrong-doing. It is a critical first-step in reclaiming our right—everyone’s right—to clean, safe, reliable and affordable utility service. 

SB 332 is a very big deal.  For further information: stop-pge.org