On Saturday, the Legislature passed a historic affordability, energy and climate package that state leaders say tackles some of California’s most pressing challenges. 

“From energy affordability and bringing down the cost of utility bills, to wildfire prevention, safe drinking water, cleaner air, holding utilities accountable, and environmental protections, Cap-and-Invest will continue to advance bold, statewide solutions for all Californians,” a statement from the State Senate said.

“Today, the Legislature delivered on a promise and sent a groundbreaking affordability, energy and climate package to the governor’s desk,” Senate President pro Tempore Mike McGuire said Saturday. “While the Trump Administration wages attacks on our economy and nation-leading climate progress, California is charting the future — cutting costs, building a stronger economy, protecting our climate progress, and proving our progress can’t be stopped.”

McGuire added, “This has been a year-long journey and these landmark bills will deliver tens of billions of dollars in savings and result in cleaner, cheaper power. A win-win for the Golden State.” 

The agreement comes after a year of what McGuire’s office said was focused work to stabilize consumer energy costs and drive California’s clean energy transition. The Cap-and-Invest extension will power California’s commitment to renewable energy, all while preventing spikes at the gas pump and saving ratepayers tens of billions of dollars.

The Cap-and-Invest reauthorization includes an estimated $60 billion to $90 billion in critical investments to lower utility bills, build thousands of additional affordable housing units, expand safe drinking water, move thousands of additional wildfire prevention projects forward, expand transit and high-speed rail, and reduce local air quality impacts in disadvantaged communities. 

Over the life of the program, at least $60 billion will go toward lowering the utility bills for California households and small businesses. 

Electric bill rebates will be timed around high-cost months, with additional support for low-income Californians, to help families most in need.

The extension also strengthens oversight of the California Air Resources Board, or CARB, and the Greenhouse Gas Reduction Fund, or GGRF, with a dedicated unit to oversee climate programs and ensure that investments deliver real benefits to Californians. 

The package also includes reforms to improve Cap-and-Invest, closing loopholes and ensuring real emission reductions by requiring offsets to be “under the cap.”

Finally, $250 million in ongoing funding will go toward reducing pollution in disadvantaged communities. Similarly, the Bureau of Environmental Justice will be made permanent, ensuring that communities with a disproportionate share of pollution have a permanent legal advocate.

This package includes an estimated:

• $16 billion for affordable housing;
• $20 billion for High-Speed Rail;
• $12 billion for transit programs;
• $5 billion for reducing localized air pollution impacts in frontline communities;
• $4 billion for wildfire risk reduction;
• $2.6 billion for safe drinking water.

The 2025-2026 Energy and Climate Agreement passed by the Legislature today includes: 

• SB 237: Stabilizes fuel supply and prices in California.
• SB 352: Codifies the Environmental Justice Bureau at the Department of Justice and strengthens air quality monitoring and reporting requirements under the AB 617 program, as the first step in implementing the new continuous commitment of $250 million annually for the program.
• SB 254: Provides new savings for utility ratepayers through public infrastructure financing and solutions to protect ratepayers and fire victims through California’s Wildfire Fund.
• AB 825: Unlocks the pathway to a regional electricity partnership across the West to harness more clean and renewable power.
• SB 840 and AB 1207: Reform and reauthorize California’s signature climate program, deliver tens of billions of dollars for critical infrastructure investments, and deliver higher utility rebates for working families.

Over the last 10 years, California’s global leading Cap-and-Invest program has helped distribute over $13.5 billion to residential households, small businesses, and industries. These investments have gone to support 20,361 new affordable housing units, 420,000 additional clean vehicle rebates, and improved air quality. 

More than 11 million households have received electric bill rebates, totaling over $600 per household. Revenues have supported 30,000 jobs, including 20,000 new jobs in clean transportation, with a quarter of all revenues supporting disadvantaged communities and resulting in emissions in regulated facilities within those communities falling by 21%.