The Voice of California’s Industrial Ratepayers

CLECA member companies produce goods essential for daily life, including critical infrastructure, oxygen for hospitals, and food distribution. CLECA members represent the steel, cement, industrial and medical gas, glass, beverage, minerals processing, cold storage, and pipeline transportation industries. Their aggregate electric demand is about 500 Megawatts — equivalent to the electricity consumption of approximately 470,000 average California households. CLECA members are large, high load factor and high voltage industrial electric customers in California for whom the price of electricity is essential to their competitiveness and for whom the reliability of electricity service is critically important.

California’s industrial electricity rates are the highest in the western states — more than double the rates paid by industrial customers in Nevada, Oregon, Idaho, and Washington. These states compete directly with California for industrial investment, manufacturing jobs, and production capacity. Rates that are uncompetitive drive investment decisions, hiring decisions, and ultimately production location decisions out of California.

CLECA intervenes as a party in formal proceedings before the CPUC, files comments at the CAISO, CEC, and CARB, engages the California Legislature, participates in ROWE formation and governance processes, and participates in stakeholder processes across the full spectrum of California energy and climate policy. Our advocacy is grounded in detailed economic and technical analysis, oriented toward three goals: improving affordability, improving accountability and transparency in rate-setting, and expanding the options available to large industrial customers.

For both reliability and cost reasons, CLECA member companies have participated for decades in the Base Interruptible Program (BIP). Under BIP, members contractually commit to curtail 100% of their nominated interruptible load upon 30-minute notice from their utility. In return, members receive rate credits. They provide a dispatchable, rapidly available demand reduction that has been critical to California’s grid reliability during heat events, generation outages, and transmission constraints. CLECA advocates in CPUC and CAISO proceedings to ensure BIP program design remains workable, curtailment obligations are fairly calibrated, and the program receives appropriate recognition in resource adequacy frameworks.

Many CLECA member industries — though not all — are formally recognized by the California Air Resources Board (CARB) as Emissions-Intensive, Trade-Exposed (EITE) industries under California’s Cap-and-Invest Program (formerly Cap-and-Trade). This designation acknowledges that these industries face significant competition from producers in other states and countries that are not subject to equivalent carbon pricing — creating a risk that tighter California regulations would shift production, and emissions, elsewhere without net climate benefit. Other CLECA members, while not EITE-designated, face the same underlying exposure: energy-intensive operations competing against producers who pay a fraction of California’s power costs.

To mitigate this “emissions leakage” risk, CARB allocates allowances to EITE facilities, partially offsetting the carbon cost impacts of the Cap-and-Invest program. CLECA actively participates in CARB rulemakings to ensure that EITE classification criteria, Cap Adjustment Factors (CAF), allowance allocation methodologies, and the new Manufacturing Decarbonization Incentive accurately reflect the economic reality facing California’s large industrial ratepayers.

Protecting California’s EITE manufacturing base is not only an economic issue — it is a climate policy imperative. Keeping energy-intensive production in California, under California’s environmental standards, produces better global outcomes than forcing that production to states or countries with weaker environmental rules.

Affordable rates and sound rate design are also what make industrial decarbonization possible. The investments that cut industrial emissions most — electrifying process heat, deploying carbon capture, expanding on-site clean generation — all require significantly more electricity than the operations they replace. When each additional kilowatt-hour carries the highest industrial price in the West, plus surcharges unrelated to the cost of serving that load, the economics of decarbonizing in California collapse. CLECA advocates for rate structures that make the electricity-intensive path to lower emissions investable, so members can decarbonize here rather than relocate.

CLECA has been an active participant in California energy regulatory and legislative proceedings since the mid-1980s, representing the large industrial ratepayer perspective across decades of policy transformation — the 2000–2001 energy crisis, electricity restructuring, Direct Access policy, renewable portfolio standard development, Cap-and-Trade implementation, and the current decarbonization and grid reliability transition.