Can California’s New Fixed Rates Really Help…

Rising electricity bills are threatening California’s climate, electrification and energy equity goals. Last week, state regulators approved a major policy change aimed at addressing this issue, but left the main driver of the bill’s increases intact.

In a unanimous decision, the California Public Utilities Commission on Thursday authorized Pacific Gas & Electricity, Southern California Edison and San Diego Gas & Electric add fixed monthly charges to their customers’ electricity bills, while reducing how much they are charged for each kilowatt-hour of electricity they use.

The maximum charge of $24.fifteen per month is among the highest fixed monthly utility charges in the country. Low-income customers will pay smaller fixed monthly charges of $6 per month or $12 per month. At the same time, Volumetric utility charges will be reduced by an average of 5 to 7 cents per kilowatt-hour, or approximately 10 percent.

Speaking ahead of Thursday’s vote, CPUC President Alice Reynolds described the change, which will be implemented in 2026 by P.G.&my and in 2025 by the other two main public service companies in the state, such as a very gradual but important step” to achieve it “More attractive for customers to go electrified.”

We are at a time when our climate goals are not necessarily achieved by using less electricity. We need to start using more electricity in general,” he stated.

Whether the new rate regime will help or hurt millions of customers trying to afford the electric vehicles and heat pumps needed to shift the state away from fossil fuels, or benefit low-income residents facing crippling electricity bills for cooling their homes during summer heat waves. However, it is a very controversial topic.

Opponents of the flat charge say it will punish energy-efficient customers and the large number of Californians who have invested in energy efficiency or rooftop solar, without reducing per-kilowatt-hour rates enough to encourage electrification. They cite a study by independent analytics firm Flagstaff Research that finds most customers will pay more under the new structure.

The losers in the vote are households that use less energy, typically live in smaller houses and apartments and have lower incomes, as the new tax represents a larger percentage of their monthly bill,” said Bill Allayaud, director of affairs California government officials for the Environmental Working Group, a member of a coalition of environmental justice groups and other organizations that oppose the tenure.

Supporters say the change will ease the energy burden for low-income households in warmer parts of the state and pave the way for future reforms to more fairly distribute utility costs and support the state’s electrification goals. . They say the Flagstaff Research study is flawed and that the analysis by the Natural Resources Defense Council, a nonprofit environmental organization, and The Utility Reform Network, a nonprofit utility consumer advocacy group , finds that fixed charges will benefit low-income customers.

“This proposal is a step in the right direction that will make the way we pay for electricity fairer and provide relief to the people who are suffering the most,” said Sylvie Ashford, energy and climate policy analyst at The Utility Reform Network. during a Thursday meeting. Press conference. On average, customers in milder climates will pay about $3 more per month, while customers in warmer parts of the state with higher air conditioning bills will save $3 to $4 per month, he said.

But groups on both sides of the bitter debate over fixed charges agree that the new rate design does not address the fundamental problem facing California: Utilities are charging customers too much overall.

They say these costs – used to run operations and fund multibillion-dollar infrastructure needs – are too high and rising too quickly to be sustainable. The new charges do nothing to change this reality and simply distribute the costs in a new way.

Much more needs to be done to stop rate increases while keeping utility revenues and shareholder profits in check,” Ashford said.