With Xavier Becerra set to become California's next governor, his team is working on a proposal to freeze utility bills and home insurance premiums statewide. The plan, still early in development, has already caught attention for its potential to shake up the energy and insurance sectors. Becerra's campaign, in November 2026, focused on freezing both utility rates and home-insurance premiums during his first 100 days, along with a promise to explain the causes of rising household costs before moving on to broader reforms. California households have seen sharp increases in both areas: from 2020 through 2026, average monthly residential electric bills climbed 66% for Pacific Gas & Electric customers, 88% for Southern California Edison customers, and 46% for San Diego Gas & Electric customers. These hikes far exceeded the 26% rise in consumer-price inflation, according to Stanford Woods Institute for the Environment research (Stanford Woods Institute).
Becerra's spokesperson, Jonathan Underland, said the policy details are still being discussed. While specifics remain unsettled, the proposal stands out as one of Becerra's few major policy moves since his election. During the campaign, Becerra promised to act quickly on affordability, at one point vowing to "immediately" freeze rates as early as February when his campaign was struggling. Later, as his campaign gained traction, he repeated his commitment to a freeze, focusing on utility bills and taking a softer approach on insurance premiums. The affordability crisis is clear in the data: wildfire-related costs passed from California electric utilities to ratepayers jumped from $488 million in 2019 to nearly $9 billion in 2024, directly affecting household budgets (Stanford Woods Institute).
Industry pushback and regulatory hurdles
The idea of a statewide rate freeze has drawn skepticism from several directions. Democratic rivals, industry representatives, and regulatory experts have questioned whether Becerra can impose such a freeze on his own. California Public Utilities Commission President John Reynolds publicly doubted the feasibility of a utility rate freeze. Industry groups warned that freezing home insurance premiums could push insurers to leave the California market, making it harder for homeowners to get coverage. The regulatory system is complicated: California homeowners' insurance rates fall under the state's Proposition 103 rate-review process, which requires insurers to submit rate filings to the Department of Insurance for approval. The insurance commissioner, not the governor, has the legal authority to review and approve or deny proposed rate changes, and an election does not automatically change existing policies or rates (ESI Brokers).
Chris Micheli, a lobbyist and state constitutional expert, pointed out that any freeze would likely need approval from the state utility commission for utilities and from the newly elected insurance commissioner, Jane Kim, for home insurance. Kim said she did not campaign on a rate freeze and had not discussed the idea with Becerra, but she would consider steps to keep insurance affordable, including freezing rates after a claim is filed to prevent penalties for homeowners who use their coverage. The insurance commissioner's office oversees a market with more than $310 billion in annual premiums across all insurance lines. The FAIR Plan, California's insurer of last resort, received approval for a 29.1% homeowners rate increase effective October 15, 2026, after requesting a larger 35.8% hike. The FAIR Plan's policy count reached over 668,600 by the end of 2025, up 44% from the previous year, with total insured exposure at $724 billion (Live Insurance News).
Political context and industry influence
Becerra's campaign got indirect support from Pacific Gas & Electric (PG&E), which gave over $13 million to an independent committee opposing his main Democratic rival, Tom Steyer. Even so, some, including Consumer Watchdog President Jamie Court, see Becerra's proposal as proof he is not tied to industry interests. Court called the proposed freeze a "time-out" to address what he views as overly industry-friendly regulators.
PG&E spokesperson Mike Gazda said the company shares Becerra's goal of making energy more affordable, but stressed that wildfire liability reform is the most urgent need for lowering costs and keeping investment in the energy system. Seren Taylor, vice president of the Personal Insurance Federation of California, argued that a rate freeze could drive insurers out of the state's high-risk market. The Stanford Woods Institute has identified wildfire liability and mitigation spending as key drivers of California's utility-cost problem, with utilities investing heavily to reduce fire risk and passing those costs to customers. Legislative efforts in 2026 included support for home-hardening loans and smoke-damage coverage standards, but a proposal to overhaul utility wildfire liability failed, leaving open questions about long-term funding for resilience and landscape management (Stanford News).
Affordability crisis and next steps
California's insurance and utility markets have seen major volatility, with wildfires driving up costs and prompting regulatory changes. Homeowners' insurance premiums rose 84% from 2020 to 2026, or 45% after inflation, as wildfire exposure and insurer retreat increased. The California FAIR Plan expanded from covering about 2% to roughly 5% of single-family homes, insuring more than $750 billion in property value. The FAIR Plan's premium base is heavily concentrated in wildfire-risk areas, and a September 2026 update reported $1.82 billion in residential written premium, with 60% generated in high-risk zones. However, FAIR Plan coverage is usually more expensive and basic than private insurance, often requiring homeowners to buy supplemental policies for full protection. Monthly new FAIR Plan policies dropped sharply from about 50,000 to 2,100, even as overall exposure stayed high.
Home insurers have only recently started returning to the state under new rules, while utilities continue to push for changes to wildfire liability laws. Former Insurance Commissioner Dave Jones suggested that Becerra could address affordability by backing legislation requiring insurers to consider risk-reduction investments by homeowners and communities when setting premiums. For now, Becerra has not released a detailed plan or timeline for the proposed freeze. Industry groups and consumer advocates are waiting for more details as his administration prepares to take office. For more on the political and regulatory context, see previous coverage.
