If you’ve ever noticed a line item labeled “California Climate Credit” on your electricity or natural gas bill, you’ve already benefited from one of the state’s key affordability programs. Funded by California’s Cap-and-Invest Program, this credit returns money to customers to help offset energy costs while the state reduces greenhouse gas emissions.
Cap-and-Invest Program
California’s Cap-and-Invest Program sets a statewide limit (or “cap”) on greenhouse gas emissions and requires large polluters to purchase allowances for the carbon they emit. As the cap tightens over time, emissions decline. A portion of the funds collected through this program are returned directly to residents and small businesses as the California Climate Credit — making it both a climate solution and a cost-relief tool.
Most residential customers typically see the credit applied automatically to their bill twice a year without needing to take any action. Historically, this takes place in April and October. While the amount varies per year, MCE residential customers received a $67 natural gas credit and a $58 electricity credit in 2025.
What’s Changing in 2026?
In 2026, the California Public Utilities Commission (CPUC) is making an important change. The April 2026 residential credit has been paused and will instead be redistributed during higher-bill months to better support customers when energy costs are typically at their peak. As the CPUC explains, “households will receive the same share (i.e., amount) of the benefits,” just at a more impactful time of year.
It’s important to note that Small Business Climate Credits (April and October) and California Industry Assistance (April) remain unchanged.
At MCE, we’re committed to helping customers navigate changes like these while keeping energy affordable. Explore additional programs, bill support options, and savings opportunities on our affordability page: mceCleanEnergy.org/lower-bill
