California Climate Credit - Frequently Asked Questions

The credit comes from the California Cap-and-Trade Program, which requires power plants, fuel suppliers, and large industrial facilities that emit greenhouse gases to buy carbon pollution allowances from auctions managed by the California Air Resources Board. The credit on your utility bill is designed to help customers as California transitions to a low-carbon future.

Each year the State issues a limited number of greenhouse gas emission allowances in line with California’s goal of reducing its overall emissions to 40 percent below 1990 levels by 2030. Some of these allowances are sold at auction, and the auction proceeds are used to either further reduce greenhouse gas emissions or benefit utility customers directly through the California Climate Credit and other clean energy programs. The Cap-and-Trade Program is one of many programs developed by the State as a result of the Global Warming Solutions Act of 2006, which put California at the forefront of efforts to battle climate change.

The CPUC created and implements the Climate Credit program from Cap-and-Trade Program proceeds. A customer’s utility delivers the credit on behalf of the State via energy utility bills. See our page on the Cap-and-Trade Program for more information.

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

Yes. However, California has various programs to help mitigate increased costs including the California Climate Credit. Electricity providers face greenhouse gas (GHG) costs when they produce electricity from fuels that put GHGs into the atmosphere. Natural gas utilities face GHG costs associated with their deliveries of natural gas to customers. These costs will be reflected in your bills - in generation rates for electricity customers and in transportation rates for natural gas customers. The California Climate Credit helps to offset these increases while preserving the incentive for customers to conserve energy and reduce GHG emissions.

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).

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.

Investor-owned utility customers receive a separate California Climate Credit on both their electric and natural gas bills. The amount of the credit depends on your specific utility and market prices for greenhouse gas emission allowances. Currently, all residential and qualifying small business electricity customers of the following utilities receive the electric California Climate Credit: 

• PG&E

• SDG&E

• SCE

• Pacific Power (PacifiCorp)

• Liberty Utilities (CalPeco Electric)

• Bear Valley Electric Service

• All Community Choice Aggregators (CCAs) such as Clean Power Alliance, East Bay Community Energy, San Diego Community Power, and other community power providers.

If you are a residential customer of one of the following natural gas utilities, you will receive the California Climate Credit::

• PG&E

• SoCalGas

• Southwest Gas

• SDG&E 

If you receive services from both an eligible electric and an eligible natural gas service provider, you will receive both credits. You don't need to do anything to receive the credit - it is automatically applied to your bills. While the credit amount varies among utilities and from year to year, it is not related to the amount of energy you use.

Residential households: 

The electric California Climate Credit is applied twice per year in the spring and fall - for most customers, it will be on your April and October bill. SDG&E customers will receive the electric credit in August and September through 2022. The natural gas California Climate Credit is applied once a year in April. SDG&E natural gas customers will continue receiving the natural gas California Climate Credit in April.

Small businesses: 

The electric small business California Climate Credit is distributed at the same time as the electric residential California Climate Credit. There is no natural gas small business California Climate Credit. For PG&E customers in 2022, the Small Business California Climate Credit will not be distributed in April, and recipients will instead receive a double credit on their October bill.

Billing periods vary by utility and may not always coincide with a calendar month. If you don't see a credit when you expect it, it should appear on the following month's bill. If it doesn't, contact your utility.

You will see the following:

• A line item “CA Climate Credit” or “California Climate Credit” on your bills with the credit amount.

• A bill message briefly explaining the credit.

All eligible active electric customers usually receive the credit in the spring (April) and fall (October). If you’re an SDG&E customer, your electric credits will arrive in August and September. If you don’t see the credit on your bill, the first thing to do is contact your utility.

While you can always contact CPUC if you have concerns or questions, we suggest you try your utility first. That is because your utility can directly access your records, tell you whether you're receiving the credit, and correct any errors directly.

Submetered customers should receive the California Climate Credit.

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

No, all residential and small business customers of the same electric utility will receive an equal amount in credit regardless of the amount of energy they use. Whether you receive a credit or how much you receive is related to market prices for greenhouse gas emission allowances, not connected to the amount of energy you use.

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. Issuing a check is at the discretion of the IOU. 

For net-energy metering customers, if a negative account balance remains twelve months after the original application of the California Climate Credit, IOUs should issue a check if requested by the customer.

Each year, each investor-owned utility forecasts the total amount of allocated allowance auction proceeds it anticipates receiving from the Cap-and-Trade Program for the upcoming year. The majority of these proceeds are split evenly across each residential household and qualifying small business, with about 20 percent of total electric proceeds used for administrative and outreach expenses, CPUC-approved clean energy and energy efficiency programs, and California Industry Assistance to prevent leakage of emissions to other states. Additional details on proceed use are available from the CPUC here. 

Investor-owned utilities receive proceeds from selling greenhouse gas emission allowances granted to them from the California Air Resources Board (CARB). The most cost-effective way to distribute these proceeds are as a credit to customers on utility bills.

Currently, the California Climate Credit is expected to continue through 2030.

Yes. The amount of the California Climate Credit depends on variables that change from year to year, such as the amount of allowances granted to each investor-owned utility by the California Air Resources Board (CARB) and the price these allowances command at auction. Regardless, the credit will always be calculated according to rules established by the California Air Resources Board and CPUC. You can see the current and past climate credit amounts here.

The California Air Resources Board’s Climate Change Page has information on the Cap-and-Trade Scoping Plan, GHG Emission Inventory Data, reports, and other resources.

Households and small businesses receive the California Climate Credit. You will automatically receive the California Climate Credit if you receive electricity from an investor-owned utility company, electric service provider or community choice aggregation provider (CCA) and are receiving utility service during the period the Credit is distributed.

Residential households: 

If you are a California residential customer from the following companies, you are eligible to receive the credit:

• Pacific Gas and Electric

• San Diego Gas & Electric

• Southern California Edison

• PacifiCorp 

• Liberty Utilities 

• Bear Valley Electric Service

• All community choice aggregators (CCAs)

Residential customers can receive credits for both their electric and natural gas purchases. All submetered customers are eligible for both credits.

Small businesses:

If you are a small business customer from the following companies, you are eligible to receive the credit:

• Pacific Gas and Electric

• San Diego Gas & Electric

• Southern California Edison

• PacifiCorp

• Liberty Utilities 

• Bear Valley Electric Service

• All community choice aggregators (CCAs)

Small business customers are commercial, industrial, or agricultural customers that typically use less than 20 kilowatts (kW) of maximum power in a month. If you are a nonprofit organization or school, you also qualify. You are eligible if your power demand hasn't exceeded 20 kW more than three times in the last year. For Liberty Utilities customers, eligibility is calculated on a calendar-year (rather than rolling) basis.

If you're not sure whether you're receiving the California Climate Credit, the first thing to do is contact your utility or CCA, the same as you would do with any billing questions. That's because although CPUC oversees the credit and can help with any remaining questions you have, your utility or CCA is best positioned to access your individual records and answer questions about your account.

Yes, If you are a NEM customer or have solar and/or an electric vehicle, you will receive the credit. The credit goes to all residential electricity and natural gas customers. Having solar does not affect your credit either way.

Yes. If you live in a mobile home or any “master metered” arrangement where your landlord receives the utility bill directly, you are eligible. The landlord that receives the utility bill must pass on the electric and natural gas California Climate Credits to you as their tenant. The utilities provide information to landlords or master meter customers to make sure they know how much California Climate Credit to return.

Yes. If you are a residential electric or natural gas customer of the following participating utilities you will get the credit.

Electric provider:

• PG&E

• SDG&E

• SCE

• Liberty (CalPeco Electric)

• Pacific Power (PacifiCorp)

• Bear Valley Electric Service

Natural gas provider: 

• PG&E

• SDG&E

• SoCalGas

• Southwest Gas

All community choice aggregators (CCAs) customers should also receive the credit.

Yes. All eligible accounts get the credit.

Customers of public utilities (like Sacramento Municipal Utility District (SMUD) and the Los Angeles Department of Water and Power (LADWP)) don't get the California Climate Credit because the CPUC does not regulate public utilities. The California Climate Credit is a CPUC-established program, and it only applies to the investor-owned utilities CPUC regulates and Community Choice Aggregators (CCAs) such as Clean Power Alliance, East Bay Community Energy, or San Diego Community Power operating in investor-owned utility territory.