Customer Climate ‘Dividends’ Set for 2014

By Published On: December 5, 2013

Utility customers will begin getting “climate dividends” every six months next April under a California Public Utilities Commission order adopted Dec. 5. Credits for the refunds are to appear on ratepayer bills. Total dividends are expected to range from $5.7 billion to $22.6 billion through 2020. Credits ultimately will depend upon the price of carbon emissions allowances that power generators must buy from utilities under the state’s carbon cap-and-trade program. Under that program, the state grants free emissions rights to the utilities, which must auction them off to generators that need them to cover their power plant emissions. Utilities then are required to rebate the proceeds from selling the emissions rights to their customers. Under this week’s order, if the rebate due exceeds one month’s total bill it is to be rolled over into subsequent bills. The rebates due in April are to cover 2013, the first year under the state’s cap-and-trade program. In a related matter, regulators adopted a separate decision on how to rebate the climate dividend money to small business customers of utilities. Under it, the rebates are to be phased down as the cap-and-trade program ramps up through the remainder of the decade to cover the whole state economy. Just major industries are covered today. Rebates would decline from covering 100 percent of the extra costs included in utility bills as a result of cap-and-trade to 30 percent in 2020.

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