Adding a new monthly set price, the California Public Utilities Commission voted overwhelmingly on Thursday to radically alter the way power is paid, disregarding hundreds of concerns from customers throughout the state.
Customers will pay less for each kilowatt of power they use in exchange for an obligatory $24.15 monthly fee.
The governor appoints the commissioners, who approved the proposal in support of the three biggest utilities in the state. According to them, cutting the price per kilowatt-hour will incentivize more people to switch to electric vehicles and gas appliances in their homes, therefore minimizing the consumption of fossil fuels that warm the world.
Customers of investor-owned utilities including Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric are impacted by the move. Customers of other municipal utilities or the Los Angeles Department of Water and Power are not covered by it.
A coalition of more than 250 consumer and other groups, along with some lawmakers from both parties, protested the decision, claiming that millions of low-power-using Californians who live in modest homes and flats will now be subsidizing high-power-user households.
Dozens of coalition members opposed to the fee demonstrated in front of the building where commissioners were meeting, holding posters that said, “Protect Working People” and “Protect Renters.”
“This will punish people who use less energy,” Jenn Engstrom, the state director at consumer advocacy group CalPIRG stated. “This will encourage high consumption and it will increase bills for millions of Californians.”
Commissioner John Reynolds disregarded the objections before to casting his vote in favor of the plan. He declared, “The public discourse has been disappointing.”
He acknowledged that while some customers’ total costs may increase as a result of the adjustment, others will notice a decrease.
However, he asserted that the main focus should be on the rate per kilowatt hour decrease, which is necessary as the state works to encourage more people to switch from using fossil fuels to power their homes and cars to electricity that is increasingly coming from wind and solar farms.
“We can reduce our greenhouse gas emissions as a state,” he stated.
In order to comply with Assembly Bill 205, a statute slated to take effect in 2022, the commission was moving to approve the specifics and sum of the new fixed charge.
On June 26, 2022, Governor Gavin Newsom introduced AB 205 as part of his budget. After the bill was passed by lawmakers and signed by Newsom a few days later, there was minimal public debate.
Just three months before to AB 205’s passage, PG&E had requested the additional monthly cost from the commission in a regulatory filing.
Opponents claim there is little stopping the utilities from hiking fixed prices more, and the measure removed the $10 cap that has been in place since 2013.
This spring, the commission put forth its own plan after rejecting the businesses’. Families with lower incomes who are currently engaged in programs that provide them with electricity bill savings will pay a monthly cost that is less than $24.15.
Individuals or couples making less than $39,440 per month will contribute $6. A $12 monthly fee will be charged to anyone who make more than that but less than $62,150 annually.
According to the commission, the modification is not intended to increase revenue for the electricity providers. Rather, it incorporates some of the expenses associated with wildfire prevention and power line maintenance into the new fixed charge.
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Customers of SoCal Edison and SDGE will be subject to the higher monthly fees starting in late 2025. Beginning in 2026, PG&E customers’ bills will reflect the new information.
According to the commission, a household using energy for all domestic appliances and a car will save, on average, $28 to $44 per month in comparison to the present billing structure.
Assemblywoman Jacqui Irwin (D-Thousand Oaks) modified her bill, AB 1999, this week. Originally introduced in January, it aimed to undo a significant portion of Newsom’s 2022 law, which imposed the set costs.
The modified bill by Irwin would eliminate the fixed rate at the end of 2028 and prevent it from increasing faster than inflation.
“A system that promotes high energy consumption could increase the entire grid’s costs and lead to higher electricity bills for everyone,” Engstrom at CalPIRG stated. “We’re looking to the state Legislature to act to reverse this bad policy and prevent more proposals like this in the future.”
