The California Public Utilities Commission approved a controversial flat charge for customers of large investor-owned utilities like PG&E and Southern California Edison.
The decision means middle and high-income households will pay a fixed electricity rate of $24.15 each month. Low-income households will pay either $6 or $12. Usage rates will drop a few cents as a result of the change.
State legislators ordered the CPUC to establish a fixed rate in 2022. They said it would help pay for grid maintenance while lowering costs for customers.
But critics say it will actually raise those costs. Last year, a group of California legislators wrote a letter to the CPUC, urging them to lower the cost and align it more closely to the national average of $11 for monthly fixed utility rates.
Jenn Engstrom, state director for the advocacy nonprofit California Public Interest Research Group, said the new charge will especially impact customers who want to save money by conserving energy since a smaller proportion of their bill will be based on their usage.
“It’s going to punish households who use less energy or just live in small homes that use less energy,” Engstrom said. “And it's going to incentivize and actually help people who use a lot of energy or live in large homes that use a lot of energy.”
Kathy Schiffer, a solar user who attended a rally on May 9 protesting the charge in Sacramento, said she’s already seen PG&E raise costs for customers. She said that as a senior citizen on disability, she’s worried about paying even more.
“I have solar on my roof because I wanted to reduce my utility bills,” she said. “This is going to [increase] bills for me and renters and people who are lower income.”
Cecilia LeBlanc and Kathy Schiffer say they both use solar energy at home. They attended a protest outside the Warren-Alquist State Energy Building in Sacramento to voice their concerns about the new charge, which they say could increase their bills.Manola Secaira/CapRadio
Dave Rosenfeld, director of the advocacy nonprofit Solar Rights Alliance, said the Legislature can still change the charge. He said he supports Assembly Bill 1999, which would cap the fixed charge at $10 a month.
“If the Legislature doesn't act, that [charge] is uncapped,” he said. “And we know what happens when things are in the hands of the CPUC. That tax is going to keep going up and up and up.”
The new fixed rate will begin to go into effect in late 2025.
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