California Climate Credit - FAQ

What is the California Climate Credit?

The California Climate Credit is part of California's efforts to fight climate change.  The credit is from a state government program that requires power plants and other large industries that emit greenhouse gases to buy carbon pollution permits from auctions managed by the Air Resources Board.  The credit on your electricity bill is your share of the payments from the State's program. 

Who is eligible for the Climate Credit?

Households and small businesses receive the California Climate Credit.  Customers will automatically receive the Climate Credit if they have an open account with the utility and are receiving utility service during the period the Credit is distributed.

Residential households: 

  • Electric California Climate Credit for all California residential customers that receive electricity from an investor-owned utility company, electric service provider or community choice aggregation provider.  This includes customers of Pacific Gas and Electric, San Diego Gas & Electric, Southern California Edison, PacifiCorp, and Liberty Utilities, and the community choice aggregators Marin Clean Energy and Sonoma Clean Power.

Small businesses: 

  • Electric California Climate Credit for all California small business customers that receive electricity from an investor-owned utility company, electric service provider or community choice aggregation provider.  This includes customers of Pacific Gas and Electric, San Diego Gas & Electric, Southern California Edison, PacifiCorp, and Liberty Utilities, and the community choice aggregators Marin Clean Energy and Sonoma Clean Power.  Small business customers are commercial, industrial, or agricultural customers that typically use less than 20 kilowatts (kW) of maximum power in a month.  Nonprofit organizations and schools also qualify.  These customers are all eligible if their power demand hasn't exceeded 20 kW more than three times in the last year.

Why am I receiving a Climate Credit?

Households and small businesses are receiving the Climate Credit to protect them from cost increases and to give people additional opportunities to take advantage of energy and money-saving upgrades that also help fight climate change.  

Does the credit amount vary by electricity provider?

Yes. However, the California Climate Credit is distributed equally to each electricity provider’s residential customers, regardless of energy consumption or bill amount.  In other words, customers of Southern California Edison receive a different amount of the credit than do San Diego Gas & Electric customers.  But all residential customers of Southern California Edison receive the same amount.

When will I receive the Climate Credit?

Residential households: 

  • The electric Climate Credit is applied twice per year in the spring and fall - for most customers, it will be on April and October bills.

Small businesses: 

  •  The Climate Credit appears on each monthly electric bill.

 Billing periods vary by utility and may not always coincide with a calendar month.  If you don't see a credit on your April or October bill it will appear on the following month's bill.

Is the credit amount connected to my electricity use?

Residential households: No, all residential customers of the same electricity will receive an equal amount regardless of the amount of energy they use.  Whether you receive a credit, or how much you receive, is not connected to the amount of energy you use. You are getting this credit as your share of payment from a state program.

Small businesses: Yes. The credit is tied to the amount of carbon pollution costs in small business electricity rates, and the actual credit received each month depends on small business customers' electricity rates and how much electricity they use.

What will customers see on the bill?

Customers will see the following: 

  • A line Item “CA Climate Credit” or “California Climate Credit” on their bills with the amount of the credit.
  • A bill messages briefly explaining the credit

Will Net Energy Metering or NEM customers receive a Climate Credit?

Yes.

What if there is a credit remaining on my account balance after the California Climate Credit is applied to my bill?

Any carryover balance will be applied to your next month’s bill. If there is a balance, customers may ask for a refund check instead of having the balance applied to your next month’s bill.

How is the credit amount calculated?

Residential households: The utilities receive proceeds from greenhouse gas allowance auctions. Under rules adopted by the California Public Utilities Commission, which regulates California investor-owned utility companies, each utility divides all available funds equally among its residential households. To see current credit amounts, visit the CPUC's website.

Small businesses: The California Public Utilities Commission adopted formulas to calculate the credits. The amount of the monthly credit depends on your electricity usage that month.

If the credit is from the State, why is it on my utility bill?

The most cost effective way to return this credit to customers is as a bill credit through your energy provider. This approach maximizes the amount of savings each household and small business will receive.

For how many years will I receive a Climate Credit?

Right now the Climate Credit is expected to continue until at least 2020.

Will the size of my Climate Credit change over time?

Yes. The size of the Climate Credit depends on factors that change from year to year, but the credit will always be calculated according to rules established by the CPUC. Find the current Climate Credit amounts here.

Where does the money for the Climate Credit come from?

Funds for the Climate Credit come from a state program to fight climate change by limiting the amount of greenhouse gases that large polluters can release into the atmosphere. Each year the state auctions a limited number of emission permits so that California can meet its goal of reducing its overall emissions down to 1990 levels by the year 2020. Some of the auction proceeds are used by the state to fight climate change, and some are returned to many Californians as a Climate Credit. This program is one of many developed as a result of the Global Warming Solutions Act of 2006, which put California at the forefront of efforts to battle climate change. 

What is the Cap-and-Trade Program?

Check out our page dedicated to the Greenhouse Gas Cap-and-Trade Program.

Will my utility rates increase as a result of Cap-and-Trade?

California has a variety of programs to reduce greenhouse has (GHG) emissions, one of which is the Cap-and-Trade Program.  Electricity providers face GHG costs when they produce electricity from fuels that put GHGs into the atmosphere.  Natural gas utilities face GHG cost associated with their deliveries of natural gas to customers.  These costs will be reflected in customer bills - in generation rates for electric customers and in transportation rates for natural gas customers.  The Climate Credit will help to offset bill increases for customers and give people additional opportunities to invest in energy and money-saving upgrades.

What is AB 32?

The California Global Warming Solutions Act of 2006, or Assembly Bill (AB) 32, is California’s law to reduce carbon pollution and fight climate change.  AB 32 mandates that California reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020, and then maintains that reduction (about 15% from current levels).

Which government agency is in charge of enforcing greenhouse gas reduction laws?

The lead agency is the California Air Resources Board (ARB). This is also the agency that sets state standards to clean the air and promote clean vehicles and clean fuels.

Where can I find more information about California’s efforts to fight climate change?

Here are a few useful links: