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AB 23

The Cost of Living Reduction Act of 2025.

2025-2026 Regular Session Introduced by Carl DeMaio

AB 23 aims to reduce California costs by suspending certain energy taxes/fees and issuing rebates when prices exceed national averages, funded from the Greenhouse Gas Reduction Fun

Re-referred to Com. on U. & E.
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Bill Summary · AB 23

AB 23 — Cost of Living Reduction Act of 2025

Status: Re‑referred to Committee on Utilities & Energy (Mar 26, 2025)
Introduced: Dec 2, 2024 | Classification: bill; appropriation

Purpose / Intent

AB 23 declares the Legislature’s intent to reduce California’s cost of living by targeting energy and gasoline costs, providing household rebates, and directing a study of broader cost drivers (e.g., housing, insurance, health care). The bill establishes near‑term operational requirements (dashboards, reports, triggers for temporary suspensions of fees/taxes and certain regulatory obligations) and a mechanism for rebates funded from the Greenhouse Gas Reduction Fund.

Key provisions

  • Dashboards and reporting

    • The State Energy Resources Conservation and Development Commission (Energy Commission) and the Public Utilities Commission (PUC) must post and update monthly dashboards showing: California vs. national average gasoline prices and electricity/natural gas prices, and California‑specific taxes/fees/regulations that directly or indirectly contribute to higher prices.
    • Each agency must submit a report to the Legislature by July 1, 2026 identifying governmental and nongovernmental drivers of higher gasoline/electricity/natural gas prices and policy recommendations to reduce those costs.

  • Price‑triggered suspensions (triggers based on average price comparisons)

    • If average California gasoline price exceeds the national average by more than 10% in the preceding quarter → suspend all specified state taxes and fees on gasoline for 6 months.
    • If average California electricity or natural gas price exceeds the national average by more than 10% in the preceding quarter → PUC must suspend collection of specified fees charged on electricity and natural gas bills for 6 months.
    • If any of gasoline, electricity, or natural gas averages exceed the national average by more than 10% → State Air Resources Board (CARB) must suspend cap‑and‑trade requirements and the collection of related revenues from covered entities that are oil refineries, electrical corporations, or gas corporations for 6 months.

  • Household rebates and funding

    • Energy Commission must develop a rebate methodology to compensate households for higher gasoline, electricity, and natural gas costs relative to the national average.
    • Beginning FY 2026–27, if average prices for a given energy source exceeded the national average by more than 10% over the preceding 12 months, the Controller shall issue rebates to households consistent with the methodology.
    • Establishes the Cost of Living Reduction Fund. Necessary amounts are to be transferred from the Greenhouse Gas Reduction Fund to finance rebates. Funds in the new account are continuously appropriated to the Controller — the transfer is an appropriation.

  • Fixed charge prohibition

    • Repeals the PUC’s authority to adopt new or expand existing fixed charges for residential electricity service.
    • Requires repeal of a specified fixed charge previously established by the PUC and prohibits the PUC and governing bodies of local publicly owned electric utilities from adopting new or expanded fixed charges on or after Jan 1, 2026.

  • Little Hoover Commission study

    • Requires the Milton Marks “Little Hoover” Commission to study the act’s methodology/effectiveness and produce a report by Jan 1, 2027 on applicability to other cost areas.

Who is affected

  • Consumers/households: potential temporary relief via suspensions and rebate payments (intent mentions up to $2,500 per household as cost‑of‑living relief).
  • Energy producers and utilities: oil refineries, electrical and gas corporations face temporary suspension of cap‑and‑trade obligations and fee collections when triggers are met.
  • State agencies: Energy Commission, PUC, CARB, Controller, and Little Hoover Commission have new reporting, dashboard, suspension and administrative duties.
  • State budget: transfers from the Greenhouse Gas Reduction Fund to finance rebates; continuous appropriation to Controller.

Fiscal and legal notes

  • The bill creates a continuously appropriated fund and requires transfers from the Greenhouse Gas Reduction Fund — this constitutes an appropriation.
  • The bill may impose a state‑mandated local program by changing PUC rules; the measure states no reimbursement is required under specified constitutional/statutory provisions.
  • Temporarily suspending cap‑and‑trade obligations and fee collections could reduce revenues to programs funded by those sources while active.

Procedural status & next steps

  • Introduced Dec 2, 2024; amended and re‑referred to Assembly Committee on Utilities & Energy (Mar 25–26, 2025). Pending committee consideration and further amendments or floor action.

Compiled from official sources — confirm details with the bill’s official record.

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