Income-based energy bills are coming to California: How will it impact you? - Action News Now

Income-based energy bills are coming to California: How will it impact you? | News | actionnewsnow.com
Income-based utility program coming to California

CHICO, Calif. - Californians who make more than $100,000 a year could pay higher rates on their electric bill than low income customers under a new income-based utility plan being proposed.

The changes would restructure your bill into two parts. First, the fixed costs customers pay for the grid and second, the charges for the amount of electricity you use.

Matt Baker, the Director of the California Public Advocates Office, originated this idea as a way to help low and middle-income Californians ease the burden of skyrocketing energy prices.

He said low income customers already get a break on how much they pay per kilowatt hour, this proposal would continue that discount to the fixed rate they pay for the grid. He said middle income earners would also pay less.

"The thinking is because California's rates are so high and electricity is getting so unaffordable we want to do something to help ease that burden for lower income and middle-class consumers," Baker said. "The differences in our proposal aren't that great between the different income classes. You have fixed fee of between 20 and 30 dollars a month and then they would have the rest of the cost which would be in the volumetric rate which would be lower than what it is now."

Baker said the fee structure is designed to help people who live in hotter areas of California where air conditioning is used more in the summer. The rate per kilowatt hour would be reduced. He said people in PG&E service area could expect to save about $20 per month on their bill for the amount of electricity used.

Under the proposal by Matt Baker's office, a high income family is defined as earning $100,000 or more per year. Those customers pay the highest fixed rate.

According to the proposal by the California Public Advocates Office, "We anticipate the vast majority of low-income customers ($50,000 or less per year) will have their monthly bills decrease by $10 or more, and a small proportion of the highest income earners ($100,000+ per year) will see their monthly bills rise by $10 or more."

The income information to determine if you fall into the low, middle and high income tiers would be confirmed by an independent third party.

Baker's version is one of nine different proposals for the the income-based changes. You can read more about the California Public Advocates recommendations for the income-graduated fixed charges by reading the full proposal and frequently asked questions.

PG&E and other utilities have their own proposed rate structure. Some of them call for larger increases for high earners.

According to PG&E, the "company's proposal calls for a monthly fixed charge for PG&E’s low-income customers to be as low as $15, and no greater than $30; moderate-income customers would pay about $51; and the highest fixed charge, for customers in the top 25% of earners, would be about $92.

The rate for each kilowatt hour of electricity for all residential customers would decrease by about one-third.

Under the proposal, on average and assuming the same level of electricity use, PG&E’s lowest income customers would receive a 21% bill reduction; other lower income customers would receive an 8% bill reduction; moderate-income customers would receive a bill reduction of 6%; and high-income customers would have a bill increase of 24%."

The California Senate Republicans delivered a letter to the California Public Utilities Commission expressing serious concerns about the fixed-charge electricity price proposal by Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E).

Senate Minority Leader Brian Jones said "The utility companies’ 'fixed-charge' proposal is nothing but a shameful attempt to exploit and rip off residential customers.”

“Another name for this proposal could be the ‘Hard Work Utility Tax,’ as it is an unjust and regressive plan that fails to recognize the differences in energy usage among households and unfairly burdens lower-income families." Jones said. "California Senate Republicans are urging the CPUC to vigorously scrutinize and ultimately reject the utility companies’ plan to squeeze Californians even more."

The CPUC will hold hearings this summer. Customers probably won't see any change on electric bills until at least 2024 or 2025.