California regulators will direct the state's largest utilities to return 85% of cap-and-trade proceeds to ratepayers. The move, which comes about a month after the successful completion of California's first carbon allowance auction, aims at offsetting higher electricity costs resulting from the cap-and-trade program, by providing a "climate dividend" on utility bills.
On December 20, 1012, the California Public Utilities Commission (CPUC) unanimously approved a plan to distribute the utility sector's carbon allowance revenues to ratepayers in the form of a biennial "climate dividend." The plan directs three major investor-owned utilities – Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric – to return 85% of proceeds from the sale of carbon allowances to ratepayers as rebates through the life of the cap-and-trade program.
The dividend, estimated to range from $20 to $40, will appear as an automatic credit on utility bills every six months starting July 2013. The amount of money that will go to ratepayers in the form of rebates from 2013 through 2020 ranges from $5.7 billion to $22.6 billion.