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Solar electricity production. (Photo: energy.ca.gov)

Income Based Electric Rate System Proposed by California Energy Companies

‘A fixed cost system could only encourage people to use more electricity’

By Evan Symon, April 15, 2023 2:45 am

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 swings 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.

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63 thoughts on “Income Based Electric Rate System Proposed by California Energy Companies

  1. Same rate no matter how much you use? I may have to go to electric heat and a battery car because it would be virtually free.

    1. Actually, the article fails to mention that you still have to pay for the electricity you use. The flat rate just gets added to your current bill. The companies claim that they will lower the rates to offset the upfront flat rate. That won’t last long before they raise kwh rates again. My 3rd tier rate is currently $0.44.kwh which is the second highest in the country behind Hawaii at $0,45/kwh.

    2. No, it’s a fixed base rate, combined with a rate based on usage. The per kw usage rate would be lower than today, with the base rate covering the difference. So you’d still pay more to use more.

      Basically, it’s using utility rates as an additional method for a degree of income redistribution. The idea is that those with higher income should pay a higher bill for electricity (if using the same amount), so that those with lower income can pay less. We are not talking about truly rich people; as the article notes, the thresholds are at $28K, $69K and $180K. I guess we’ll have to file copies of our income taxes or something with the utilities.

      We have yet to learn how this would affect solar electric, but I’m guessing that if almost all of your electric usage is covered by solar, it could fairly dramatically raise the cost just to be connected to the grid.

      1. Well stated. This is exactly what this is. Ask me I invented and foisted this concept upon the American public, when I first ran and until end of my presidency. Barry Soetoro.

      2. And crash that grid and not be allowed to have a gas powered gen set.
        Then of course, the teaser rate goes away along with you paycheck to cover the grid nonsense.
        You go (airhead) girl!

    3. I believe that the so called flat rate will just be an added surcharge on top of the regular bill. Nobody gets out of the big squeeze here. In the future you will be billed for additional income for selling power generated from your solar panels, state and federal. They have to recoup the tax deferrals from past “gifts” to the peasants. It’s never about saving the planet, it’s always about the money. Watch and see.

    4. No. The flat fee is only part of the bill. It’s the part that varies based on income. Everyone still pays for the energy consumed, but at a lower rate. This is how the help the lower incomes. It’s also how they screw the solar users because now with lower unit rates, they will presumably pay less to the homeowners selling energy back to the grid.

    5. The same people who brought you the economic and social disasters of San Francisco, Oakland , Los Angeles etc are bringing their special skills to your utility service. Stock up on candles …………………

    6. The same people who brought you the economic and social disasters of San Francisco, Oakland , Los Angeles etc are bringing their special skills to your utility service. Stock up on candles …………………

  2. Da comrade. Government energy is the most reliable and least costly. The several weeks without it only make me stronger.

  3. Bad idea , it will hurt conservation and families. yhat use more if they are in the wrong utility. toot toot- calif exodus pocks up speed.

  4. I am actually more concerned that Sacramento was actually able to pass legislation that will negatively affect most Californians last summer and very few knew about it. I even read about environmental organizations complain that they didn’t even know about the new pricing format last week on a bill that was passed last August. Kind of slimy.

    1. That’s exactly what California does to the rest of the USA – make asinine policies that enrich the already wealthy and decimate every one else.

  5. Consumer: “How much is the electricity going to cost?”

    Edison: “How much ya got?”

    Classic extortionist shakedown tactics.

  6. So you need to run a test in order to figure out if people will use more if it costs less?…. something tells me the folks asking that question went to a college where they were overly schooled and under educated!

    1. If you bought solar, you’re gonna end up subsidizing those who couldn’t afford it and didn’t.

      And don’t ever forget, one stroke of the pen in a capital can change (I.e., destroy) the financial calculus behind many decisions.

    1. It is designed to fail. If I only had to pay $51 a month even if I were making well into 6 figures I would be using a couple of grand worth of electrons keeping my house at 65 degrees in the summer, running my pool filter night and day, charging my multiple electric cars and so on and so on. Who are they kidding?

      Now I do think it is possible to get real energy rates down to something like this in a sane energy policy run by adults. Cheap energy makes everyone’s life better and more productive. This is why they want to collapse the grid and only have power to the NWO elites. You will maybe have power on Tuesdays and Saturdays from 1 to 3:00 pm on alternate months IF they feel like giving it to you at all.

  7. In 2023, electricity should be considered human right, and should be free. Who pays for it? How about we don’t give billions to Ukraine? (for example).

  8. This will just encourage massive fraud. People will just transfer their utility bill to the resident that earns the least or it could even be a fake person. With all the “undocumented” residents, who’s going to verify the info that’s presented? This will incentivize even more fake documents and by Americans who are going to get screwed if they don’t work the system, too.

  9. The Globalists and other NGO, Malcontents, are destroying our country around us everyday. This is another form of attack on our economy, personal income etcc this is what WE call Asymmetrical warfare.

    Wakeup America, and quit watching MSM news, and the Sell out Political Elite, use your GOD given brains and take time to research life and all that is happening around you. AND FIND JESUS, as HE is the Ultimate TRUTH!!!

  10. This article is not well written. These prices are probably per kilowatt hour usage. Your electric bill will not be $30 per month. More inaccurate/incomplete information.
    Don’t trust anything tied to California politics.

  11. Ahhh the Political Officer, likes to delete Narratives and Opinions of those that don’t follow party ideology. You Moderators, don’t deserve what America’ freedoms, security, or Peace guarantees to its citizens.

  12. Commie Fornia comes through with fascist energy plan! The more you make the more you pay. Same as ObamaCare. The Democrat plan for redistribution of wealth from those who work hard to those who don’t. As the more productive people continue to leave the state. And tax revenues are running a deficit? This is why.

  13. As the government forces their electricity mandates on all. LOL, and the electricity comes from natural gas and fossil fuels. So, if there’s a fire or an earthquake and the power grids go down, how do I charge my car and get out of town? A: You don’t, you die.

  14. “From each according to his ability, to each according to his needs”…..Marxism is well and alive in Kalifornia.

  15. Here’s my reality in another state. For electric, we normally spend $90/mth during Fall and Spring. Add another $60 for Summer and Winter. My neighbor in a similar home is on a flat rate $100/mth year round due to (AHEM) being indigent.

    I run one room AC during Summer, he runs THREE. I run one room electric heater and a wood stove during Winter, he runs electric central heating.

    Last two years I’m not running AC or electric heater and I switched to gas appliances. My electric bill should be $40/mth (inflation is factored in), but since I’m now using less (and somebody has to pay for the neighbor), I PAY $75/mth!

    I’m on a fixed income, and our grid is at 96+% usage. I’ll probably stop using electric altogether when we start competing with EVs.

  16. This also fails to mention that the close to 2 million Californians who have invested tens of thousands of their retirement dollars into solar as a way of avoid electric rate hikes will also be forced to pay these fees, greatly diminishing the savings they are now enjoying by producing their own electricity and sending the excess back to the grid, now for pennies (thanks to NEM 3), that the utilities can then sell back to their neighbors at full retail. Bottom line, the private utility companies are only seeking to increase shareholder profits at the expense of all Californians under their domain.

  17. Why conserve, turn up the spa heater, no more sweaters in the house during winter, elective vehicle for sure, Free Free Free, that’s my Cali government.

  18. There is already an income-tested discount program in place called CARE. Other ways of paying less (or maybe even nothing?) kick in IF you are getting government benefits.

    Meanwhile still no windmills on the enviros precious California coast (the most gigantic untapped wind resource on the continent). The feds just auctioned off rights to OFFSHORE wind development in areas that see some of the most violent seas in the world on the north coast. These platforms are supposed to be anchored to the sea floor 1000 meters down?! Apparently no land-based shoreline wind will be permitted. Put them on the Golden Gate Bridge if it’s such an emergency!

  19. Either I’m not understanding the “fixed rate” or you’re not. I thought the “fixed rate” applied to all the *other* charges like “electricity transmission, wildfire fund, taxes” but the actual electricity *used* will still be charged at the tiered rates, so you still pay for all the electricity you use.

  20. This totally screws people like me who put rooftop solar on their houses recently. Should have a $10/mo SCE bill and pay a little in peak months. Now they want to charge me $85/ mo fixed plus ant energy I use at a lower rate. Which means they will buy my solar generated power at a lower rate also. It will never pencil out now. Spit roasted. There better be an exemption. I was promised I would grandfather in the NEM2.0 program.

  21. Fool idiot greenies ruin an already successful energy market. It’s unbelievable to think any of this is necessary. Not a single idea put forth by these imbeciles will affect the climate. Yet, you’ll all have less energy and what’s available will be unreliable.

  22. More and more California thinks electricity is the way to the future and wants to force more and more people to use nothing but electricity, yet the grid can’t handle the loads of today, when it’s legal to use natural gas for appliances and gasoline for vehicles, let alone the much higher needs of tomorrow. The governments fix is to ” charge the rich more ” for the electricity they use. This make the rich plan to fix every problem doesn’t add up, if you can do simple math. I guess politicians skipped that class as often as they could.

  23. NOPE for all the reasons already mentioned PLUS I’m not giving my annual tax info to a power company. Absolutely nothing to do with them.

  24. Now, who the hell gave utility companies access to my state and/or federal income tax returns?????? I never did, and will likely sue them if they get copies. Absent that, how are they going to find out users’ income levels??? Buffoonery reigns.

  25. So, how will this work if I have solar? On an annualized basis, I generate a net positive amount of solar energy. So, with this plan, if on PG&E I’ll have to pay $51 per month for using no electricity provided by PG&E? Basically, being penalized for installing solar.

  26. If my monthly grid hook up fee increases then the reimbursement to allow PG&E to steal my solar energy should equally increase penny for penny. Under this communist retardation, no one will throw money away on solar panels. Thus, there will never be enough energy to charge all these proposed EVs in the future. Consumers living in solar homes should be exempt from this retardation AKA “Gov Gavin Communist Energy Agenda” Who is going to reimburse the solar homes for all the money they invested?

  27. Still angry. When did it become justified to steal your neighbors income? Really! Just because you make less money or simply refused to advance up the ladder does not give you an excuse to steel from your neighbor. Higher earners did not commit a crime. There is no ethical arguement that makes it OK to steel from your neighbor. This income based utility bill is wrong. Under this retarded thought process the people could charge higher earners to breath….eat…poop…sleep…. We should stop this evil thought process before it starts

  28. The people who have a higher income usually made lifelong sacrifices to attain that income. These people did not commit a crime. Penalizing/punishing your neighbor for working hard or being motivated is low down evil. This is theft. This is not ethical. Low income homes can apply for CAREs.

  29. If you bought solar, you’re gonna end up subsidizing those who couldn’t afford it and didn’t.

    And don’t ever forget, one stroke of the pen in a capital can change (I.e., destroy) the financial calculus behind many decisions.

  30. Okay, so how much will this so called flat rate be for those who receive reparation checks or are they exempt from any charges?

    1. How are they going to know how much your family income truly is. WHAT – the government is giving out my personal information to a company that may have an employee stealing customer information. We have enough Identity theft without promoting It. FUCK YOU Neusome!!!

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