Income Based Electric Rate System Proposed by California Energy Companies - California Globe

pandangsa.blogspot.com

Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric filed a proposal on Thursday that would install a fixed-rate electric bill system for those under the three largest power companies in the state.

As part of AB 205, which was signed by Governor Gavin Newsom in June of last year, the proposal would cover both the simplified electric bill system under the bill, as well as the fixed rates wanted due to the wild wings in utility prices that California experiences. With the power system expected to be volatile in the coming years due to the shift from fossil fuel-based energy to green energy, continuing questions over the extension of the Diablo Canyon nuclear plant, an expected increase of electrical usage due to exploding popularity of electric cars and the end of gas-powered car sales in 2035, and possible disruptions to the system due to natural disasters such as wildfires, many legislators pushed for a fixed-price system to stop the hiking of costs during high-demand times and to not overtly punish those having high AC usage during summer months.

According to the proposal, those in Edison areas will pay $15 a month if their household earns under $28,000 a year, $20 a month for those making $28,000 to $69,000 a year, $51 a month for those making $69,000-$180,000 a year, and $85 a month for those making above $180,000.

Meanwhile, those in PG&E served-areas would pay $15 a month if their household earns under $28,000 a year, $30 a month for those making $28,000 to $69,000 a year, $51 a month for those making $69,000-$180,000 a year, and $92 a month for those making above $180,000.

Finally, those in SDG&E territories would pay $24 a month if their household earns under $28,000 a year, $34 a month for those making $28,000 to $69,000 a year, $73 a month for those making $69,000-$180,000 a year, and $128 a month for those making above $180,000.

While the fixed-price proposal will not reduce costs for everyone, many lower and middle income households could expect to see overall electric costs go down anywhere from 10% to 20% should the plan pass, with maintenance charges being removed.

“That law was intended to lower the amount that residential customers pay per kilowatt hour while increasing transparency with bills, noted SCE spokeswoman Kathleen Dunleavy on Friday. “This will provide relief to millions of customers.”

In a statement, SDG&E CEO Caroline Winn added that “We have listened to and heard from our customers that fundamental change is needed to provide bill relief. When we were putting together the reform proposal, front and center in our mind were customers who live paycheck to paycheck, who struggle to pay for essentials such as, energy, housing and food.”

A possible new fixed rate on electric bills

However, critics noted on Friday that the proposal has many holes in it, including not tying in many local electric and utility providers, who often have higher charges.

“This proposal leaves a lot of Californians out,” Ellen Wright, a utility contract consultant, told the Globe Friday. “Huge parts of LA are not under this, as are some of the poorest areas of the state. But even if you look past that, a fixed cost system could only encourage people to use more electricity, especially during high use times like the summer. That means an even greater strain on the grid.”

“You feel for these families struggling to pay bills, but at the same time, the electric grid out here is fragile, and anything that encourages even greater use at critical times is dangerous. We’ve had emergency alerts go out begging people to not use electricity during certain times during the hot weather last year. If the costs are down, people might be less inclined to pay attention to those. I mean, can you tell someone not to use their AC? Or to not charge up their car? These are growing questions for California, and instead of continuing to push for more responsibility, they’re just making it cheaper and encouraging people to use more as a result.

“This is only a proposal, but they really need to take a look into this, or at least do a test city to see if people will use more if costs go down.”

The California Public Utilities Commission is due to hear the proposal soon, with a final decision likely next year and, if approved, the new fixed rate appearing on bills in 2025.

Evan Symon

Evan V. Symon is the Senior Editor for the California Globe. Prior to the Globe, he reported for the Pasadena Independent, the Cleveland Plain Dealer, and was head of the Personal Experiences section at Cracked. He can be reached at evan@californiaglobe.com.