Governor Gavin Newsom announced changes to California’s Climate Credit program, providing $1.4 billion in credits set to be distributed to residents, with a shift in customer bill credits to better support households during high-cost months.
As millions of residents across California were set to receive automatic utility bill credits, the proposed changes would deliver these credits when energy expenses are typically the highest.
For 2026, the California government has announced it will distribute a total of $1.4 billion in residential credits.
These include $894 million for electric customers and $520 million for natural gas customers. In addition, $73 million is allocated for small businesses and $114 million for California Industry Assistance.
California is sending $520 million in utility bill credits to millions of households to help fight against Donald Trump’s cost-raising agenda.
With our California Climate Credit, we’re putting money back in Californians’ pockets and taking real action against the climate crisis.
— Governor Gavin Newsom (@CAgovernor) April 16, 2026
Through the program, the California government has returned nearly $16 billion to residents since 2014, along with $1.9 billion through Small Business Climate Credits and California Industry Assistance.
Officials described the Climate Credit program as direct financial relief for residents at a time when living costs are rising. The program returns funds directly to residents rather than investing them in indirect subsidies.
The changes include adjustments to the timing of these credits. Instead of the traditional April and October schedule, credits for customers of major utilities such as PG&E, SCE, and SDG&E would be distributed in August and September starting in 2026.
For smaller utilities such as Bear Valley, Liberty, and Pacific Power, the proposed schedule keeps credits in April and November for 2026, before shifting to October and November in future years.
Credits for small businesses that were issued in April and October, along with California Industry Assistance payments in April, would remain unchanged under the proposal.
The California Public Utilities Commission is scheduled to vote on April 30 on a proposal to adjust when electric credits are issued.
Natural gas credits are also expected to follow an updated schedule; under the proposal.
These payments would be moved earlier in the year, with implementation beginning in February 2027.
The Climate Credit is part of California’s Cap-and-Invest program, which requires large greenhouse gas emitters to purchase allowances for their emissions. The revenue generated through this system is returned directly to residents and businesses in the form of utility bill credits.
Over time, the program has redistributed billions of dollars to help offset energy costs while maintaining its environmental goals.
Additionally, it is also positioned as part of a broader strategy to curb climate change, backed by both the Governor’s office and the Legislature. These changes are tied to Assembly Bill 1207, which extends the Cap-and-Invest program through 2045.
The law also requires that credits be delivered in a way that maximizes their value to households. The program is projected to generate $10 billion in electric bill credits through 2030.
The system is managed by the California Air Resources Board. Under this, companies with high emissions must buy allowances, and the proceeds are automatically redistributed.
Apart from the relief in bill, the program has also generated around $33 billion in funding for climate initiatives, which supported over 120,000 jobs, and financed projects. These includes affordable housing, high-speed rail, and zero-emission transportation, with a focus on reducing emissions and supporting underserved communities.
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