Tom Steyer wants to be California's climate governor

In this episode, I sit down with financier Tom Steyer to discuss his 2026 run for governor of California. We dig into his pledge to cut the state’s notoriously high electricity bills by 25 percent, how he plans to break the stranglehold of investor-owned utilities through local competition and smarter grid utilization, and the delicate politics of pushing a climate-forward agenda when voters are primarily focused on the immediate cost of living. 📌 Instructions to add paid episodes to your preferred podcast app via mobile / desktop (PDF transcript) (Active transcript) David Roberts Greetings, everyone. This is Volts for April 27, 2026: “Tom Steyer wants to be California’s climate governor.” I’m your host, David Roberts. Today’s guest is billionaire financier and longtime climate crusader Tom Steyer, who — thanks to the Eric Swalwell campaign’s recent implosion amid sexual misconduct allegations — is now narrowly leading the Democratic field in California’s 2026 race for governor. He has edged out Xavier Becerra and Katie Porter in the most recent post-Swalwell polling, though the three of them are bunched together within the margin of error. The June 2 primary is about six weeks away. Steyer is self-funding to the tune of over $100 million, and the interests he has picked fights with — the investor-owned utilities, the oil companies, the realtors — are going equally big against him. I have not endorsed anyone in this race and I’m not about to, but Steyer is the climate-forward candidate in the country’s biggest climate-forward state, at a moment when climate policy is at a crossroads and climate as a political issue is visibly in retreat. That seemed worth an hour. We talked about his pledge to cut electricity bills by 25 percent — what it means for utilities and how the math adds up. I asked him about the YIMBY fight, wildfire costs, refinery closures, the Iran war, transit’s fiscal cliff, and his take on where the climate cause stands now, fifteen years after he first jumped into it. Here’s my conversation with Tom Steyer. With no further ado — Tom Steyer, welcome to Volts. Thank you so much for coming. Tom Steyer Thank you very much for having me, Dave. David Roberts Tom, I’ve spent the last few days reading and researching this, and the main conclusion I’ve come to is that you would have to be crazy to want this job. Let’s start there. There’s a baseline of crazy you must have to be pursuing this. Many issues we could touch on. I’m trying to prioritize a little bit. I want to start with electricity, my beloved topic, the main subject of my podcast. Currently, California has the second highest electrical bills in the nation. They have risen sharply, at least since 2019. Now, when you see polls, a majority of Californians are saying this is a top issue, a big issue. You have pledged to bring utility bills down by 25%. That is a bold claim. I want to dig into that a little bit. Let’s start with utilities. You said in some of your campaign ads that you’re going to break up the monopolistic utilities. But then in a press conference a few weeks ago, you walked that back or clarified that you do not literally mean that you want to break up PG&E. I’m just curious, what do you mean, what do you want to do to and about utilities? Tom Steyer Let’s start with a little discussion of the investor-owned utilities in California, of which there are three. They are all legal monopolies. You are not allowed to compete with them. They charge twice as much as the average in the United States. That is a punitive situation, but entirely predictable given the fact that they are a legal monopoly that has legally no competition. They also have, Dave, very distorted and unhelpful incentives from the utility system where they get a 10% guaranteed return to their equity for every capital expenditure that the Public Utilities Commission allows into the rate base. That’s how they make money. Most people don’t understand that. I’m sure you do. But that gives them an incentive. If you have a choice between a $100 million plant and a $200 million plant — “If we do the $100 million plant, we’ll make $10 million. If we do the $200 million plant, we’ll make $20 million. Boys, let’s do the $200 million plant.” It’s a huge distorting incentive. What I’ve said is, would I like to break them up? It turns out there are two big municipal utilities in California, one in L.A., one in Sacramento. They both charge about half what the big monopoly electric companies charge. How am I going to do that? Part of it is by different oversight from the Public Utilities Commission where we’re incenting different behavior and insisting that they’re obeying it. Also, the idea that they need a 10% return on equity in a guaranteed form with about a 50/50 debt-to-equity ratio makes no sense as well. Dropping that number will make a dramatic difference. But the big thing is I also want to be able to enable local competition because if you look at how this is happening, the cost of electricity — you say “you love electricity” — me too. There’s an electricity revolution going on in the world. The cost of clean energy is plummeting and the cost of batteries is plummeting and everyone around the world is taking advantage of it except us. If we allow local competition, it costs between solar and batteries or wind and batteries — that’s 3 or 4 cents a kilowatt hour. Just to put that on the table. We’re getting charged somewhere between 30 and 40 cents a kilowatt hour. Is it going to be necessary if we’re going to do community choice aggregators, to do the local grids, are we going to rebuild everything? No. Are we going to use their poles and their wires? Yes. Is that worth 37 cents? No. We’re going to be able to produce energy and distribute it locally much cheaper, which is going to force these big monopolies to reduce their costs or lose customers. It’s going to be competition that drives down the price of electricity. To say 25% — let’s be clear. If we drive down the cost of electricity by 25%, we will still be 50% more expensive than the average in the United States of America at a time when electricity prices around the world are plummeting. When everyone’s saying, “Oh, that sounds impossible,” it’s — really? Let’s put it in a context. Does that even sound like a fantastic outcome? That sounds like a better outcome, but not a fantastic outcome. David Roberts Let’s talk about this. What you are talking about is retail competition. I think Volts listeners mostly know there is wholesale and retail, and retail is just the last mile serving the electricity to the customers. There have been some analyses that show that only about 15 to 20% of bills are really on the generation side, the side that you could get at with retail competition. Most of the cost is in the poles and wires themselves, in maintaining, in transmission and distribution, which you are not going to get at with retail competition. Tom Steyer But we are going to get at, Dave, on the first half of this. I agree with you. Let’s talk about how we drop the costs in terms of how the overall system works. If you look at what’s going on, and I know this because I’ve spent a lot of time looking at some of the new technology that lets you, for instance, take a 35% efficient grid up to 60%. You don’t have to rebuild your — David Roberts Utilization. I saw this in your plan. It made my heart all aflutter. I’ve done a couple of pods on grid utilization. Say a little bit about that. What would you want? How could utilities increase utilization or how do you push them to do it? Tom Steyer They’re very slow to let people onto the grid. 73% of the time, they don’t make it in time. They want to rebuild the grid because we’re capacity constrained at 35%. I should mention to people, there is this thing called information technology. There’s this other thing called artificial intelligence. They’re now able to be used to take that 35% efficiency up to at least 60, s…