CPUC Freezes Spring Residential Climate Credits, Eyes Summer Bill Relief for IOU Customers

CPUC President Alice Reynolds issued a proposed decision in R.25-07-013 (the Climate Credit rulemaking) ordering PG&E, SCE, and SDG&E to pause distribution of the 2026 residential electric Climate Credit while it considers moving the credit to higher-billed summer months later this year.

Who Should Care?

• Utility regulatory affairs and rates teams at PG&E, SCE, and SDG&E, who will need to adjust billing, customer communications, and internal planning around Climate Credit timing for 2026.
• Affordability and consumer advocates, since this move sets up a likely shift of credits into summer months when bill pressure is highest.
• Large energy users and Community Choice Aggregators, as this reflects a broader Commission willingness to actively manage bill credits as an affordability tool rather than a passive, calendar-based practice.
• Policy and legislative watchers, because the decision shows how Assembly Bill 1207’s “high-billed months” requirement is being interpreted and enforced in real time.

Proposed Decision

The Climate Credit, funded through California’s Cap-and-Invest program, is currently delivered in the spring and fall, but recent statutory changes under Assembly Bill 1207 require electric credits to be provided in no more than four high-billed months to maximize affordability.

The PD concludes that allowing the spring 2026 credit to proceed as scheduled would violate the Public Utilities Code, which explicitly requires distribution in high-billed months (and spring is historically a low-bill period for electric customers). The 2026 credits are also 40% to 60% smaller than their 2025 counterparts, making timing even more consequential for affordability impact.

Pausing the spring distribution preserves flexibility for a forthcoming March 2026 decision that is expected to address timing and shift delivery into summer months when bill relief would be more meaningful. The pause applies only to large electric utilities' residential credits. Small business and industrial Climate Credits are not affected, and the proceeding remains open.

Comments are due March 2. The earliest the CPUC will consider this item is March 19.

Instant Analysis

This PD is a timing maneuver, not a change to Climate Credit amounts or eligibility. By pausing the spring 2026 residential electric Climate Credit, the Commission is preserving the option to redeploy those dollars into summer billing cycles. For PG&E, SCE, and SDG&E, this creates short-term implementation uncertainty but avoids locking in a low-impact spring distribution of already reduced 2026 credits.

The move also indicates that, going forward, Climate Credit timing is likely to be treated as an affordability tool rather than a fixed, twice-annual administrative practice, an important precedent for utilities’ billing, customer communications, and future Cap-and-Invest revenue planning.

Note that while the Small Business Climate Credit is explicitly not paused, a 2021 decision (D.21-08-026) links Small Business Credit timing to residential Credit timing. The PD goes out of its way to clarify that linkage does not apply here, but implementation teams should be aware of the potential for confusion.