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.
View Comments (52)
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.
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.
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.
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.
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!
Agreed
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.
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.
Karl Marx:
“From each, according to his ability”
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 .....................
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 .....................
Gimme muh free electrons!
Da comrade. Government energy is the most reliable and least costly. The several weeks without it only make me stronger.
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.
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.
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.
Consumer: "How much is the electricity going to cost?"
Edison: "How much ya got?"
Classic extortionist shakedown tactics.
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!
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.
This will fail miserably like all commie plans.
They always cost much more than promised.
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.
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).
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.