Small Business Climate Credit

Recent Changes to Small Business California Climate Credit Eligibility

In August 2024 the CPUC added additional restrictions to Small Business California Climate Credit eligibility. Recipients must now have less than 100 individually eligible accounts under the pre-existing usage criteria. Businesses with more than 100 individually eligibility accounts are no longer eligible to receive the Small Business California Climate Credit on any account. More details can be found in Resolution E-5339 (available here).

This change was made to align with the legislative and commission intent of the program to benefit only small businesses. Remaining small businesses will benefit in the form of larger credits. Utilities must notify customers if they are determined to be ineligible under the new restriction. Impacted businesses can request information on how the IOU reached an ineligibility determination and must be provided with the contact information of a representative at the IOU familiar with the Small Business California Climate Credit.

Who Receives the Small Business Climate Credit?

In addition to residential customers, eligible small businesses also receive an electric California Climate Credit. An eligible small business is defined by the CPUC as any non-residential customer on a general service or agricultural rate, who has less than 100 individual electric accounts where usage on each account doesn't exceed 20 kilowatts in more than three months out of the previous 12-month period (or for the previous calendar year, for Liberty Utilities customers). In other words, the CPUC interprets small business as "non-residential customers with a small number of accounts with usage that is usually relatively low on each account." Electricity customers of PG&E, SDG&E, SCE, Pacific Power (PacifiCorp), Liberty Utilities, and Bear Valley Electric Service will automatically receive the small business California Climate Credit if they meet these qualifying criteria. Community Choice Aggregator (CCA) and energy service provider customers in these territories are also eligible and will also automatically receive the credit.

For more details on how your utility determines the number of eligible accounts and how you can request information from your utility on this determination, see Resolution E-5339 available here.

Per CPUC decision, small businesses do not receive any California Climate Credit for their natural gas purchases.

How much is the Small Business Climate Credit?

The California Climate Credit is a flat credit and not based on usage or other factors. Each investor-owned electric utility’s small business California Climate Credit varies, but all small business customers of a utility receive the same amount. The small business California Climate Credit is delivered in the same months as that utility’s residential California Climate Credit. The small business California Climate Credit is typically distributed in April and October. The amount of the credit can be found here. 

Prior to 2022, eligible small businesses received a credit that was proportional to their electric usage. However, this method of crediting was updated to comply with changes in the California Air Resources Board (CARB)’s Cap-and-Trade Regulations. Under the new methodology, most small businesses are expected to receive more assistance annually than under the previous volumetric method. The flat credit methodology is also expected to make the credit more transparent and predictable to eligible small businesses. 

Frequently Asked Questions

Which small businesses are eligible for the Climate Credit?

All California small business customers of an investor-owned utility that meet the usage and account limit criteria. This includes customers of Pacific Gas and Electric Company, San Diego Gas & Electric, Southern California Edison, Pacific Power (PacifiCorp), Liberty Utilities (CalPeco Electric), Bear Valley Electric Service, and all Community Choice Aggregators and energy service providers within those utility territories. Small business customers are non-residential commercial, industrial, or agricultural customers that use less than 20 kilowatts (kW) of power in at least nine of the previous twelve months. For Liberty Utilities customers, eligibility is calculated based on an annual instead of on a rolling basis. Businesses must also have less than 100 eligible accounts. More details on eligibility can be found in Resolution E-5339 available here.

Nonprofit organizations and schools also qualify for the small business California Climate Credit.

Is there a Small Businesses Natural Gas Climate Credit?

No, only for electric.

Is the credit amount related to my energy use?

For 2022 and beyond, the small business California Climate Credit is the same no matter how much electricity you use. The California Air Resources Board (CARB)’s Cap-and-Trade regulations bar volumetric returns, which vary the amount of return proportionate to the amount of electricity usage.  Prior to 2022, the credit was distributed volumetrically.

When will I receive the credit?

The small business California Climate Credit typically appears as an on-bill line item in April and October.

How is the credit amount calculated?

Each year, each investor-owned utility forecasts the total amount of Cap-and-Trade Program proceeds it anticipates receiving for the upcoming year. After administrative and outreach expenses, spending on clean energy and energy efficiency programs, and California Industry Assistance is deducted, the remainder is split evenly across each residential customer and qualifying small business account. Since investor-owned utilities began accruing proceeds in 2012 through 2023(the most recent year with recorded and commission-approved data available), residential and small business customers have usually received over 80% of the total electric proceeds.