SB 540 – the bill we’ll never notice until it’s too late…and coal companies control CA’s energy future. (updated 9/02!)

Update! Read all about it here!

UPDATE! This is as urgent as it gets – we need to prevent the utility regionalization bill that would give away control of California energy to coal states and to Trump. Leaders in the Assembly may come up with a gut-and-amend bill at the last minute, but it would mirror SB 540 Pathways, which was unable to move through Assembly committees due to its unpopularity. 

The two people who can stop this backroom dealmaking are Pro Tem McGuire and Senator Limon, Chair of the Senate Democratic Caucus, who will be the new Pro Tem next year.

Everyone can call both McGuire and Limon because they are the present and future leaders of the Senate. But if you’re a constituent of either, please mention that in your call. The next three days are crucial!

ACTION #1: Make sure legislators are awake and aware that WE ARE WATCHING THEM!

(Note: The Senator’s “Courage Score” is A+ on environmental issues! We’ve always trusted her to do the right thing on these issues. The damage SB 540 can do to us is now well known – we expect her to stand up and say “NO!”)

SCRIPT FOR SEN. MONIQUE LIMÓN AND SENATOR McGUIRE: I am calling from [zip code] and I want Sen. [Limon/McGuire] to vote “NO” on SB 540. This horrible bill will hand over our energy future to Trump and coal states. States in the east who’ve already fallen for this scam are sorry because their rates are now sky high and there’s no way to get out.

Some of the financial interests behind SB540 are dangling money for the Prop. 50 fight. We need to trust you if you want us to work on prop 50! Do not move SB 540 or any regionalization plan forward in the last 10 days of session outside of a public process. Don’t sell us out!

More script if you want it: Consumer Watchdog has demanded that CA senators pledge to leave office if their vote for this toxic bill leads Trump’s FERC to Invalidate our stat’s Clean Energy Laws. I and many other Californians will remember whether it’s Trump or our own Democratic legislators who kill our clean energy future, and our renewable energy standards, and forces us Californians to subsidize coal-producers in other states. I expect [Senator ___] to vote “NO” on this bill, and would like a response.

IS SEN. HENRY STERN YOUR STATE SENATOR – Call him!: I am calling from [zip code] and I was surprised and disappointed to see that Sen. Stern, a fellow Democrat, is actually one of the authors of SB540! This bill will allow outsiders to wipe out our “Renewable Portfolio Standards” (RPS) and raise our rates, while forcing us to subsidize coal producers. Our single state control protects us now, and there is NO reason to give it up to a President who hates CA, loves “Clean Coal,” and has promised to kill our environment regulations.The senator’s “Courage Score” is an “A” on environmental issues, so his authorship of this toxic trojan horse of a bill feels like a huge betrayal. He has admitted when faced with an independent legislative analysis that shows that this bill could actually increase greenhouse gas emissions across the west, jeopardize California’s clean energy laws, and even curtail the state’s fight against climate change, this this whole scam is a “trust exercise.” WTH? Please tell him to remove himself from this bill and start fighting for his constituents’ lives and pocketbooks instead! I would like a response from the senator.

CONTACT:

• State Senator Monique Limón (SD-21): email, SAC (916) 651-4021 SB (805) 965-0862, OX (805)988-1940 
• Senator McGuire (916) 651-4002
• State Senator Henry Stern (SD-27):email, SAC (916) 651-4027, Calabasas (818) 876-3352
• Not your people? Which assemblymember/state senator is mine?: findyourrep.legislature.ca.gov.

ACTION #2: Tell Governor Newsom to refuse to sign this toxic bill if it gets that far…

SCRIPT for GOVERNOR NEWSOM:  SB-540 is a “Pathway to pollution.” It’s asking us to give up our independence and control of CA’s energy future to join Trump’s FERC. Its imaginary benefits will undoubtedly disappear, leaving behind a worsening climate for us, and massive profits for energy corporations. Meanwhile, MAGA GOP will crow that they suckered a state with a trifecta of Democratic power into supporting their coal-mining operations. This is an incredibly corrupt bill which will tarnish your reputation, along with all your previous environmental efforts. Just say “NO” to Trump’s sideways attempt to cripple our state.

CONTACT: https://www.gov.ca.gov/contact/

Deeper Dive

“BIG TECH-BACKED DEMOCRATS COULD HAND ONE OF THE COUNTRY’S LARGEST AND GREENEST ENERGY MARKETS TO TRUMP AND HIS FOSSIL FUEL ACOLYTES” (Lever)

What?

(https://www.youtube.com/watch?v=nLGa6qKK-o4)

There’s no denying what Trump wants to happen. It’s just a question if our Democratic-majority state legislature helps him, or fights back!

We all know it…Trump wants to crush and humiliate California, the perennial BLUE thorn in his side, and SB 540 – Pathways Western Grid will let him do it, rewarding his fossil-fuel donors, while destroying SB-100, our states’ landmark policy to require that renewable energy and zero-carbon to supply 100% of electric retail sales by 2045.

BACKGROUND: We don’t need it and its promises are lies. SB 540 would eliminate CA’s Renewables Portfolio Standard (RPS), one of California’s key programs for advancing renewable energy. Of all the times to attempt this dangerous idea, doing it when Trump is president is crazy. He and Project 2025 are trying to kill renewables. He hates our state, and Pathways will give him control over our energy grid like an earlier bill the Indivisible Green Team killed. Now the Pathways proponents are spinning a tale to convince us they have solved the problems. It’s not true.

Project 2025 is in charge here: “Project 2025, the ultraconservative policy blueprint for Trump’s administration that he has been closely following, calls for the Energy Department to “refocus FERC” to “no longer allow it to favor special interests and progressive causes” and prioritize fossil fuels.  If the bill is enacted, it could cause greenhouse gas emissions to rise across the drought-stricken West and jeopardize California’s clean energy laws, according to a California Senate analysis and studies reviewed by The Lever. The analysis, which was authored by California Senate Judiciary Committee staffers, is explicit in its warning: “Under this bill, California would open the state up to federal challenges.”

With SB 540, our future looks…like coal! Not only will we lose California’s clean energy promise forever to coal-dominated states, but private-equity owned PG&E and PacifiCorp (owner of 22 coal plants) might be part of the Nominating Committee that chooses who’s going to be in control of the new Regional Operator! That’s insane!

Many of our Democratic state legislators are sleepwalking in this nightmare, believing there’s no way to stop it. Others believe Natural Resources Defense Council’s (NRDC) pro-utility propaganda. Despite their reputation as one of the country’s largest environmental groups, NRDC’s lobbyists have actually been working for decades “to convince California politicians to side with utilities and energy companies -from enabling the Enron debacle (ripping off taxpayers for $40 billion!), to undermining rooftop solar, to promoting the largest Utility Tax in the country.” WTH, NRDC!

The good news: up until now only Jamie Court from Consumer Watchdog, the LEVER and Tom Elias warned us about the dangers of SB 540 from legacy media. But now CW on the NY Times article shows need to shelve Western Regional Grid plans in SB 540 the New York Times warns us that ,”five governors (in the PJM regional grid ) have been sharply critical and called for withdrawal or overhaul of being in a regional grid”.

They complain that  instead of saving money, which is the whole reason to do SB 540 their rates have actually gone up 40% over five years. The other reason legislators say they voted for SB 540 is increased reliability. But the chair of FERC, Mark Christie,  says about PJM

“For years I’ve been saying we are heading toward a reliability crisis,” Mr. Christie said. “The crisis is really now on our doorstep.”

And Tyson Slocum from Public Citizen says, “PJM is controlled by the  corporate energy companies which puts energy company lobbyists in drivers seat at PJM. 

WHAT THE BILL AUTHORS SAY, (OR DON’T SAY!)

SERIOUSLY!?!

READINGS

0/2025More info: We are a coalition of 130 groups, our letters explain everything.

• This one is signed by over 56 environmental and social justice organizations
• This one is signed by over 69 Indivisible California organizations. 

• We will lose our renewable goals to Trump. In addition, all the other western states can sue us and kill our renewable energy focus. This has been clearly shown in the attached Center for Biological Diversity letter posted here.
• More reading: Dirty Deal – How a Corporate Utility Fixer is Poised to Turn Over California Climate Law to Trump. (full report) (synopsis)
• (Lever) BIG TECH-BACKED DEMOCRATS COULD HAND ONE OF THE COUNTRY’S LARGEST AND GREENEST ENERGY MARKETS TO TRUMP AND HIS FOSSIL FUEL ACOLYTES.
• (cbsnews) Why some California Democrats take Big Oil money and vote against environmental laws
• (hcs.foundation) How an Environmental Group Aligned with Monopoly Utilities to Squash Rooftop Solar

ARTICLES

(Consumer Watchdog) “Sacramento, CA – Consumer Watchdog wrote to California State Senators today warning them that a pending proposal, SB 540 (Becker) to create a Western regional grid could lead to overriding of key state environmental laws, including the Renewal Portfolio Standards (RPS), which sets deadlines for clean energy goals.

“If California’s renewal portfolio standard is invalidated, this is a vote you will be remembered for,” wrote Consumer President Jamie Court, who was excluded from Wednesday’s hearing on the proposal before the Senate Energy Committee. “It should not be taken lightly. Many of the generation of legislators who voted for electricity deregulation regretted it and it haunted many. Consumer Watchdog is calling on every Senator who votes for the Pathways plan to take a pledge to resign from public office if the renewable portfolio standard is invalidated under a legal challenge made because of Pathways. Had those deregulation legislators had to make a similar vow, California would have avoided a huge disaster.” Read the letter here.

The sovereignty issues that have doomed the Western Regional Transmission Organization (RTO)/Pathways, and prevented it from becoming law, have not gone away, in fact they have become more perilous following the presidential election,” Court wrote, pointing to an analysis of a previous proposal by the Senate Judiciary Committee in 2018.

The Committee stated,“ This change in governance would place control over California’s energy market in the hands of a Western states RTO heavily dominated by coal interests (the largest coal-producing states in the U.S.) and under the direction of the Trump administration. California’s policies for transitioning to renewable energy—and initiatives to develop distributed or decentralized energy resources—would be subject to review and revision by a market authority that is not interested in either.” Trump’s Federal Energy Regulator Commission (FERC) would have greater jurisdiction to strike California’s clean energy laws.

“The question remains to you: ‘Can you trust Trump’s FERC with our environmental laws’” Court stated. “If the answer is no, you need to vote against Pathways. If you vote for it, you should do it soberly with a pledge to resign from public office if our environmental laws are invalidated.  You are making a bet on California’s green energy future.”

Court wrote that so-called ‘guardrails’ put up by SB 540 were meaningless.

Power goes to a Delaware Corporation: Under Pathways as envisioned in SB 540, the CAISO remains the transmission grid operator, but it will transfer its right to propose tariffs (the rules for how the markets and the transmission grid operate, called Section 205 filing rights) to a Delaware (DE) corporation, called a Regional Operator (RO). The Delaware RO will control all the tariffs dictating how all electricity markets operate AND how California runs its grid. California would give up its right to demand that its environmental, consumer and health safety laws be followed.”

He noted some of the ways that California environmental law could be overturned by the governance change:

Coal states could make us subsidize coal: Any market participant or prospective market participant, such as a coal plant owner, can challenge California’s RPS, as a violation of the Interstate Commerce Law and invalidate the RPS law.

It could allow Trump to require CA (and the entire regional market) to subsidize the purchase of coal-fired power throughout the West.  If Trump requires coal subsidies in regional markets, as he promised and started to do in 2018, California will be required to buy and use electricity made from coal.

The regional operator could require California help pay for transmission lines in other states in the regional market that support coal and nuclear power plants or are costly and unneeded. In January 2025, PacifiCorp reneged on its promise to shut down its Utah coal plants. California could be required to subsidize their coal power instead of developing its own clean power.

Corporate welfare: Court mentioned the motivation for SB 540, noting the bill’s author Senator Josh Becker is from the Silicon Valley: “What has happened is the need for more power due to the inexhaustible hunger of data centers to power AI has caused some people to conveniently forget the Achilles heel of Pathways?… The IBEW unions, after dire warning about sovereignty issues in 2023, are now on board. This follows a huge boon to IBEW electricians nationally to staff data centers and new contracts for the union from PacifiCorp, a principal backer of the Western grid.”

“The so-called ‘guardrails’ in the SB 540 proposal are not safeguards,” Court wrote.” Even if CAISO remains the balancing authority, the Delaware corporation will hold all the cards and possess the authority to make the rules for both the markets and the transmission grid, solely subject to FERC’s jurisdiction. The idea that a statement of corporate governance saying that the DE RO will respect California’s right to set policies will be binding on the RO or prevent market participants who want to challenge California’s environmental laws is laughable.  Giving CAISO the power to pull the trigger in 2027 is only delaying the inevitable — CAISO and its free market appointees are big backers of Pathways.  And no exit ramp exists if this experiment goes bad – the new Regional Operator – with the Trump FERC — will decide whether California can leave the new unproven system, and how much it will cost California consumers to end the failed experiment.”  

Consumer Watchdog asked to participate in the Senate Energy Committee information hearing on Pathways on March 12th, but was denied a seat on a panel, despite being one of the only dissenting voices to the utility/Big Energy establishment. 

“The backers of SB 540 don’t want you to know its real motto: ‘More Power For AI, Forget Climate Change,’” said Court.

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(Consumer Watchdog) Sacramento, CA –  The California Senate Judiciary Committee analysis of SB 540 (Becker), which would change our electricity market from a California-only market to a Western regional market, cites the dangers of federal preemption of California clean energy laws by the Trump Administration and coal plant managers. The analysis states, “California could see significant harms to its energy goals and its standing in the regional market.” SB 540 is to be heard Tuesday in the committee.
 
“Senators need to listen to this analysis,” said Jamie Court, president of Consumer Watchdog. “This is not the time to be turning power over California environmental laws to Trump.”
 
“These dangers are even greater now that President Trump has put a target on California’s green energy laws and directed the United States Attorney General to find ways to curtail our state’s climate change efforts and to identify opportunities to challenge our state policies through various legal angles, such as federal preemption and discrimination (Dormant Commerce Clause) legal angles,” the analysis states. “Currently, California is able to exert a certain amount of influence over the direction of the CAISO with regard to interstate energy with a board appointed by the Governor and subject to approval by the California State Senate. Under this bill, California would open the state up to federal challenges….The two major legal concerns that arise from this bill are based on the federal preemption doctrine and the Dormant Commerce Clause.”
 
The analysis cites Consumer Watchdog’s letter stating, “Consumer Watchdog writes the following in opposition to SB 540: ‘Consumer Watchdog opposes SB 540, which gives power over California environmental laws to the Federal Energy Regulatory Commission (FERC) at grave risk to California’s renewable portfolio standard (RPS) and other clean energy laws.’ There is a growing volume of case law that supports the reality of these risks,” according to the Committee.
 
“This bill, coupled with President Trump’s laser focus on ‘Reinvigorating America’s Beautiful Clean Coal Industry’ and undoing California’s green energy policy and actual directive to the United States Attorney General to find ways to combat California’s green energy laws through theories of preemption and the Dormant Commerce Clause, truly make California’s policies vulnerable to challenge.  It is safe to assume that California will be more susceptible to being found to run afoul of the Dormant Commerce Clause or preempted by federal law for impinging on the jurisdiction of FERC should this law be enacted. Should such fears materialize, California could see significant harms to its energy goals and its standing in the regional market.”
 
“Once the CAISO approves participation in the IRO, regional issues are strictly overseen by FERC, and there are no guarantees, especially because the IRO does not operate under the political oversight of the California Legislature… FERC has expansive jurisdiction over energy that is transferred through interstate commerce. Given the current administration and its ever-increasing appetite to usurp California’s state control, it would arguably be dangerous policy to authorize the CAISO and the electrical corporations whose transmission is operated by the CAISO to use voluntary energy markets governed by an IRO in lieu of the CAISO managing related energy markets. This would increase the risk that FERC and this administration find a hook to challenge a host of laws in California, not to mention take control over what type of energy is generated and used in California and how much it costs.”
 
“Given that the President’s Executive Orders precisely target California and what he refers to as our ‘state overreach’ this is arguably not the year to pass this legislation,” the analysis states. “It would be prudent to proceed with caution and wait and see how the United States Attorney General identifies and takes ‘action against state laws and policies that burden the use of domestic energy resources and that are unconstitutional, preempted by federal law, or otherwise unenforceable’ without giving the Trump Administration another new opportunity upon which to take action against our state’s green energy efforts”.
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