Steyer Unveils Plan to Cut California Electricity Rates by 25%

Democratic gubernatorial candidate proposes overhaul of state's utility incentives and investment in local energy solutions.

Apr. 8, 2026 at 9:24pm by Ben Kaplan

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A vibrant, abstract painting featuring overlapping geometric shapes and brushstrokes in shades of blue, orange, and yellow, conceptually representing the rapid changes to California's energy infrastructure.Steyer's plan to overhaul California's electricity system aims to drive down rates and accelerate the state's transition to a more decentralized, renewable-powered grid.San Francisco Today

Democratic gubernatorial candidate Tom Steyer has unveiled a plan to overhaul California's electricity system, which he says could cut power rates by 25% and save the state and ratepayers billions of dollars. Steyer's proposal includes changing utility incentives, increasing grid usage, investing in batteries and renewable energy, and promoting more local energy competition.

Why it matters

California's high electricity rates have been a major concern for residents and businesses. Steyer's plan aims to address this issue by restructuring the state's utility regulations and incentives to prioritize cheaper, more efficient electricity generation and distribution.

The details

Steyer's nine-page plan would change how the California Public Utilities Commission oversees and regulates the state's electricity monopolies. Currently, utilities are incentivized to make capital expenditures that earn them a 10% guaranteed return, even if those investments don't result in the cheapest electricity. Steyer wants to cut that guaranteed rate of return by at least 2%, which he says would put hundreds of dollars back in households' pockets each year. The plan also calls for increasing grid usage to at least 60% through the use of information technology, investing in batteries, microgrids and rooftop solar, and allowing more local competition to drive down prices.

  • Steyer expects PUC vacancies to open up next year when the new governor takes office.

The players

Tom Steyer

A San Francisco-based Democratic candidate for California governor who has unveiled a plan to overhaul the state's electricity system and cut rates by 25%.

California Public Utilities Commission

The state agency that oversees and regulates California's electricity monopolies.

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What they’re saying

“We're going to change the way the Public Utilities Commission oversees and regulates these monopolies. It's a very perverse incentive. They get paid for making capital expenditures that the Public Utilities Commission permits, and then you get a guaranteed 10 percent return on those capital expenditures.”

— Tom Steyer, Democratic Gubernatorial Candidate

“We're going to change what they get paid for. And we're going to change so that they have an incentive to do the things that will produce cheap electricity as opposed to doing things that produce expensive electricity, which has been the system that's been in place for a hundred years. Their incentives are to produce expensive electricity and not be careful about fire. And that's just wrong.”

— Tom Steyer, Democratic Gubernatorial Candidate

What’s next

Steyer expects PUC vacancies to open up next year when the new governor takes office, and he plans to fill those positions with people who will prioritize protecting ratepayers over utility company interests.

The takeaway

Steyer's electricity plan aims to fundamentally reshape California's utility incentive structure to prioritize cheaper, more efficient power generation and distribution, potentially saving residents hundreds of dollars per year on their electricity bills.