Consumer Watchdog Alert Warns About 11th Hour CA Electricity Deregulation Scheme That Will Raise Rates and Increase Coal Power

SACRAMENTO, Calif., Aug. 18, 2025 -- Consumer Watchdog released a short "Consumer Alert" white-board video warning about the dangers of a last-minute push by Governor Newsom and the legislature to rewrite California's electricity rules and remove key Enron-era protections against price gouging.  

Watch the video.

The 2 minute video explains through the use of a white board how SB 540 is dangerous:

• Moving from a California-only system, which must comply with California law, to a Western regional grid, whose rules are dictated by Trump's Federal Energy Regulatory Commission (FERC) and coal power producers themselves, puts our clean energy laws in peril.
  
  
• In regional electricity markets, electricity is sold on a "single price auction," where the highest price is paid to all sellers (regardless of production costs). This theoretically incentivizes building more power. In the hands of traders, like those who ran Enron, this leads to higher prices based on scarcity.
  
  
• Regional grid operators have passed on huge price increases. The massive failure at the East Coast regional organization PJM shows the dangers. Nine governors signed a bi-partisan letter criticizing rising utility rates and mismanagement at the regional energy grid. The story at New England Independent Systems Operator (NISO) is no better.
  
  
• Removing the Enron-era law Utility Code Section 345.5 – that requires the market operator to maximize supply and minimize price – is a recipe for price gouging. The senate amendments to SB 540 retained this protection, but sponsors say they cannot live with the requirement. Why? Because the point is for sellers to be free to charge the highest price they can squeeze out of Californians.

"The state senate worked out a compromise on SB 540 that retains some of the state's political power and maintains the anti-price gouging laws put in place post-Enron," said Jamie Court, President of Consumer Watchdog. "That wasn't good enough for the sponsors, who are balking at maintaining California's political power over our electricity rates and green energy laws. By taking their side, Newsom will tie the hands of future governors and legislatures. The legislature should say no to any plan that give more power over California energy laws to self-interested traders, Trump and coal producers."

SOURCE Consumer Watchdog