FOR IMMEDIATE RELEASE

Date: May 20, 2025 

Fix the Cost Shift coalition submits letter to Assembly Appropriations Committee in support of reducing electricity bills for millions of Californians

AB 942 would save 10 million Californians $3.6 billion on their utility bills

SACRAMENTO – Today, the Fix the Cost Shift — a coalition representing nearly 2 million workers and businesses across California — submitted a letter of support for AB 942 to the California State Assembly Committee on Appropriations. 

The letter underscores the urgent need to modernize the state’s outdated rooftop solar subsidy program and deliver meaningful electricity bill relief to 10 million Californians who don’t have rooftop solar. AB 942 would deliver $423 million in savings next year alone and $3.6 billion over the next two decades for Californians’ electricity bills.

"California is in the midst of an affordability crisis, an issue that the Legislature has made a top priority this year. One of the primary concerns for Californians is how much we pay in electricity bills," the letter states. "California cannot meet its climate goals if electricity becomes a luxury good. We must modernize outdated subsidy programs to ensure an energy system that is clean, fair, and affordable."

The amended AB 942 maintains NEM benefits for current customers for a full 20 years and ensures new property owners continue receiving subsidies through the Net Billing Tariff — which delivers 76% to 82% of the savings provided under NEM.

Linked here and below is the full letter:

Date: May 20, 2025
To: Members of the California State Assembly Committee on Appropriations
From: Fix the Cost Shift Coalition
Re: Support for Amended AB 942 (Calderon)

Dear Legislators,

We write as members of the growing coalition supporting Assembly Bill 942 by Assemblymember Lisa Calderon (D-Whittier). This legislation is a step in the right direction to reforming California’s outdated Net Energy Metering (NEM) subsidy system that has and will continue to disproportionately burden low-income customers by shifting billions in costs onto lower-income Californians without rooftop solar.

California is in the midst of an affordability crisis, an issue that the Legislature has made a top priority this year. One of the primary concerns for Californians is how much we pay in electricity bills.

One of the main drivers of these increases is the NEM subsidy, originally created in 1995 to incentivize rooftop solar. Since then, the NEM cost for non-solar customers has exploded — last year alone, non-solar customers paid $8.5 billion to subsidize rooftop solar users, a 150% increase from 2021. That cost shift represents roughly 25% of the average non-solar customer’s electricity bill. Those being subsidized are often higher-income homeowners while renters, lower-income families, and inland communities are left footing the bill.

These subsidies benefit 1.6 million rooftop solar customers while 10 million non-solar customers — many of whom are lower-income, renters, and disadvantaged communities — pay significantly higher energy costs to cover the subsidy.

Despite typically paying off the costs of installing solar after 4 to 5 years, rooftop solar customers are getting subsidies for 20 years — meaning they profit for up to 15 years afterwards.

The amended version of AB 942 will deliver billions in savings while maintaining the NEM subsidies for rooftop solar customers who originally made the investment. According to an economic analysis, the amended legislation will achieve billions in savings:

  1. When a property is sold, the new owner switches away from the NEM system — resulting in an estimated rate relief of $203 million in 2026 and $2.5 billion from 2026 to 2043.

  2. Reallocate the California Climate Credit from solar customers to non-solar customers, providing estimated rate relief of $220 million in 2026 and $1.1 billion from 2026 to 2030.

Taken together, the amended AB 942 would deliver an estimated $423 million in savings next year and $3.6 billion over the next two decades. Those are real savings that Californians desperately need.

We also write to directly address the falsehoods spread by the solar industry.

First of all, the main attack against this bill — both before and after amendments — was that it would “break contracts” of rooftop solar users. That is completely false. The NEM tariff is a rate structure established by the CPUC, not a contract between customers and the state or their utility companies. The CPUC has full legal authority to modify rates and does so routinely, including in the recent NEM 3.0 proceeding. Even solar industry representatives have acknowledged this in formal CPUC proceedings.

Now, the solar industry is arguing that California should maintain the subsidies after a property gets transferred to the new owner, and that changing this would also “break contracts” for customers. Again, there is no NEM contract. Moreover, it’s completely misleading that property sellers can’t command a higher price for their property after installing rooftop solar — not only is this improvement considered an addition that would increase the value of a property, but the new property owner will also benefit from lower electricity rates under the Net Billing Tariff which provides 76% to 82% of the benefits received under NEM.

California cannot meet its climate goals if electricity becomes a luxury good. We must modernize outdated subsidy programs to ensure an energy system that is clean, fair, and affordable.

We respectfully urge you to support AB 942 and help deliver relief to 10 million Californians who cannot wait any longer for justice on their utility bills. 

Sincerely,
Fix the Cost Shift, a coalition representing nearly 2 million workers and businesses across California:

  • California State Association of Electrical Workers

  • Coalition of California Utility Employees

  • California Hispanic Chamber of Commerce

  • Long Beach Area Chamber of Commerce

  • Los Angeles Chamber of Commerce

  • Los Angeles Latino Chamber of Commerce

  • Orange County Hispanic Chamber of Commerce

  • League of United Latin American Citizens

  • Tulare Kings Hispanic Chamber of Commerce

  • Kern County Hispanic Chamber of Commerce

  • Pacific Gas & Electric

  • San Diego Gas & Electric

  • Southern California Edison

  • San Gabriel Valley Civic Alliance

  • ICON CDC

  • The Energy Transition Collective

  • Hispanics in Energy

  • TELACU