California regulators are working on a ratemaking proceeding that would add fixed monthly charges to utility bills, which increase based on income levels. Proposals under consideration affix charges as high as $128 per month, regardless of how much electricity is used at the home.
The proposed charge is justified by the California Public Utilities Commission (CPUC) based on claims that it would alleviate bill pressure on California’s low-income residents, but this reasoning has not stood up to scrutiny in the eyes of 18 California Congressional members.
“A single parent with one child living in a small apartment in the expensive San Diego area earning just $40,000 per year would be forced to pay a new fixed charge of $73 each month—regardless of how much they try to reduce their energy usage,” warned the coalition of Congressional members in a letter to CPUC commissioner Reynolds.
Economist, rate design expert, and California resident Ahmad Faruqui modeled that the Income Graduated Fixed Charge (IGFC) not only does not help low-income residents with savings, but that it would disproportionately harm customers with low electric bills.
Faruqui said the charge both creates a disincentive for conserving energy at home and worsens the value of rooftop solar customers, significantly damaging the return on investment.
“We are concerned that imposing a high fixed charge could make it substantially more difficult for families to realize cost savings from electrifying their homes, improving their energy efficiency, or installing distributed energy resources such as rooftop solar,” said the letter from the state Representatives.
The proposed decision is unanimously supported by the state’s large investor-owned utilities, which stand to profit from an energy mix that includes less customer-sited solar and less electricity conservation. The state has goals of energy affordability, conservation, lowered emissions, and climate resiliency, all of which can be supported by distributed solar, but this proposed decision works in direct contrast to those goals, said the Congressional members.
“Even $33 per month would distinguish California as having a monthly fixed charge three times the national average. And there is little to stop utilities from continuing to increase electric rates once they secure the highest fixed charges in the country,” said the letter to the CPUC.
California’s residents have taken a beating from investor-owned utility companies and the CPUC over the past year. Major utility PG&E passed a 13% hike to electricity rates, adding on to what are already among the highest in the nation.
The state passed NEM 3.0, a cut to solar export compensation which sunk the state’s once-thriving rooftop solar market, leading to nearly 20,000 jobs lost and numerous solar installer bankruptcies.
CPUC then moved to shut down the emergent community solar market, which offered a pathway for renters and those with unsuitable rooftops for solar to save on electricity bills. Proponents of community solar legislation say it would enable bill savings of about $300 per year, with total ratepayer savings reaching $9 billion.
As for the income-graduated fixed charge, California Representatives are calling for thorough analysis that extends beyond investor-owned utilities’ internal analysis on the impacts on Californian families.
“We believe that a policy change of this magnitude requires thorough vetting and analysis. We urge the CPUC to ensure that any proposal it ultimately pursues neither inadvertently and disproportionately increases energy costs for low- and middle-income California families, nor slows down our efforts to address climate change through energy efficiency, conservation, or distributed energy resources,” said Congressional members Mike Levin and Mike Thompson in a joint letter to the CPUC.
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As a widow on a fixed income this is a DUMB and STUPID idea. How am I and anyone else who has to budget and do without supposed to justify a additional charge just to make the utility companies richer. Maybe they should figure out how to prevent fires and maintain their lines.
Exactly people better start paying attention or it’s gonna get even worse
The overall cost of living in CA is completely out of control. Just consider the following inflated costs.
Car registration
Gasoline
Auto and home insurance
Fast food
Gas tax
State income tax
And yet we have the most people living in poverty and highest homeless population.
And our deficit is over $70 billion but we are giving illegal aliens free Healthcare.
CA is walking the green mile
CPUC: Let them eat cake
Fast food? Fast food is a want not a need. Like saying skittles, pepsi, and snickers gone up in price. LoL
Hi Mike,
I agree 100 %. My wife and I are retired and 2 years ago down sized to a mobile home in San Jacinto, which can get up to 115 in the summer. So we were one of first homeowners to get solar. The company installed them at no cost and we pay a flat rate each month. It saves us over a 1000 a year. It really passes me off to hear that the utility commission is using our monthly rate again. Its time to investigate the members and their families for kick backs and corruption.
Reminder that California going from a huge $100 billion surplus to $75 deficit is due to the state being entirely reliant on income taxes (income being highly variable, and the SPAC days of lots of investor money being over), and not planning for bad years by putting a surplus into a savings for bad years, results in CA having these issues.
Newsom and the CPUC need to go, and all utilities need to be owned by the government and not private companies who have the incentive to continuously raise prices from pressure from stock owners.
Well said.!
Exactly people better start paying attention or it’s gonna get even worse
If they do this, I’m unplugging, and going off the grid. I could do it now. Don’t make me!
Has there been any thorough discussion of how income will be verified and whether this fee will reflect the size of families/dependents? I don’t see how this measure remotely reflects the will of CA residents, not how we can hold anyone responsible for it accountable. Frankly this is insulting for families who have invested in solar energy or been mandated to purchase solar panels.
The energy situation in California is absurd and this alone is undermining the state economy. People are leaving, planning to leave, in record numbers. The exodus will continue since for some of us it’s a multi-year plan to execute the relocation, but wheels are already turning.
Energy infrastructure is fundamental to society from citizen residents to all business. The only winners here are the energy companies. Record profit, record price increases, policy that undermines the states purported direction of electrification, and a Governor, CPUC and state legislature that continually show they are owned by power company lobby.
Evidence for that: Power companies lobby the Governor and state legislature with very big money. The Governor appoints the CPUC members who have literally destroyed existing-home rooftop solar ROI with NEM3 while simultaneously approving absurd rate increases for PG&E who is already reporting record profit. The legislature aligns with PG&E by passing AB205 which, by law, makes PG&E a defecto tax collection authority tying electric service (which cannot be disconnected) to income. All of this makes distributed home solar absurdly expensive because of NEM3 batteries for proper sizing, and AB205 adversely changing the math of volumetric ROI. On top that systems that can scale to future resident needs are difficult to get approved.
The decoupling of connection fees, which are set to be a defacto income tax by state law, from volumetric use fees will provide two fees that can be independently argued for increases.
This is an abject failure of the main bodies of state leadership. People and business are leaving California and this alone is reason enough.
Personally, I can only describe it as an extortion racket. 1) There are no real market alternatives as PG&E as the delivery agent charges substantially more than generation & delivery in most parts of the country. I use a 3rd party generator but the delivery is PG&E regardless and almost all cost is in the delivery. 2) I cannot disconnect once connected and now 3) the connect fee has been legislated to be income based so a defacto income tax levied and collected by a for profit company. I also believe this extortion racket will end once PG&E has milked what it needs to rebuild neglected infrastructure and there may be big fines. Those fines will go to the state and not back to the pockets the state has sanctioned be raided.
Absurd, frustrating, failure of the state to protect and serve citizens, all while a publicly traded company is reporting record profits. Those who can will leave, those who cannot leave will be left with a failed state.
Rambling post but I think I represent a great number of people. Unfortunately most people don’t know this is happening. They just see their energy bills and accept the PG&E ad campaign that they are a good neighbor.
They need to come up with ways to reduce costs not continuing to increase.
Commiefornia has been out of control for years. Gavin Newsome is a unbalanced liberal scumbag that only has Commiefornia’s destruction in his sights. If the people of Commiefornia would vote for conservatives they would get their state back. I was out there in 1977, it is a wonderful, beautiful state but I am glad I do not live there
It seems unconstitutional to me (but I’m not an attorney) to allow companies to charge for their electricity when the homeowner isn’t using their electricity and instead uses solar or another form of electricity. And yes, it harms the middle and lower income groups.
I want to know if this can be prevented. It seems like the government should be able to protect us from this kind of outrageous arbitrary charge when the cost of electricity in California is one of the highest in the nation.
Wellll, our illustrious governor in this state Gavin Newscum, receives campaign donations from the cpuc and PG&E board of directors that’s just great so of course he’s not going to stand up and speak out against any of this
I’m 80 on SS and have to have a part time job in addition to that for my house payment, utilities, bare basic phone service and gas for my 20 year old vehicle! There are few extras, as you might well imagine. I struggle now, higher rates from THE ONLY INVESTOR OWNED ELECTRIC Utility will sign my death warrant sooner than later. High salaries and stockholders wealth are killing me and the rest of the working poor in CA. Don’t do it. INVESTOR means gambler: it should be their problem, not mine. Why don’t we have true public utilities! I can’t afford to subsidize gamblers and keep paying higher rates
Hello EP
I concur with you 100%. I am also a disabled senior citizen. With these practices they are eroding our very existence to a total sum of zero. The State of California has to do better by us.
Utilities should be billed based on usage. End of story. We should always be rewarded for our efforts to conserve energy.
I’m 81 years old worked hard all my life this is really terrible what the utility company’s are trying to do to line their pockets also if happens it’s going to effect the very people that work for these big companies that’s really wonderful (not) IS NOT GOOD AT All PERIOD!!!
California legislators need to get a grip on this issue before we either vote them all out, vote to replace our current utility provider with a better managed utility system or we leave the state for good. Anything would be better than we have it now with the CPUC at the helm. To add insult to injury, I cringe every time a PGE commercial comes on the PBS news hour telling us how many wonderful things they are doing for Californians!
They just want to run every hardworking person out of California so it will be king Newsome and his subjects
Maybe it’s time to replace this board with a group that cares about people paying up vs the utilities that are paying them to ignore what is in the base interest of common people.
Also maybe remove the elected officials that keep appointing them
I don’t understand why Newsom is allowing this to happen. The CPUC seems to be in the pocket of investor owned utilities. They’ve allowed rates to increase again while PG&E makes huge profits and pays out bonuses and dividends. The problems PG&E has with poorly maintained lines and infrastructures are because they paid out dividends rather than investing in maintenance, resulting in catastrophic fires. And the CPUC is allowing them to pass repair costs to us rather than penalizing the stock holders for not replacing PG&E leadership.
Now they have cost jobs and exacerbated global warming. We need the governor and legislature to completely revamp how electric rates are set and who pays for what.
How will they know my income? I sure as hell won’t tell them!
This is getting out of control. I am on disability and am having to choose between paying my electric bill and buying food to eat. With electric going up it also takes money from paying on my other utilities. Shame on these people who take from the low income to make themselves wealthy.