California Republicans are asking state regulators to reject a proposal by California’s three largest power companies to create a fixed rate for services based on household income.
“The ‘fixed-charge’ proposal is nothing but a shameful attempt to exploit and rip off residential customers,’” Senate Republicans said in a letter sent to California’s Public Utilities Commission last week. “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.”
The passage of Assembly Bill 205 required utilities to simplify power bills while lowering costs for lower-income residents.
As a result, Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric submitted a joint proposal to the CPUC earlier this month to create a tiered fixed-rate system that would cover basic services and operating costs.
- Households with annual income from $28,000 – $69,000 would pay $20 a month in Edison territory, $34 a month in SDG&E territory and $30 a month in PG&E territory.
- Households earning from $69,000 – $180,000 would pay $51 a month in Edison and PG&E territories and $73 a month in SDG&E territory.
- Those with incomes above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory.
The utilities say customers should also expect to see lower costs for their kilowatt-hour usage, which would not be included in the fixed rate. SCE says approximately 1.2 million of its lower-income customers will see their bills drop by 16%-21%.
Senate Republicans call the passage of AB 205, which included a wide variety of energy measures beyond billing, “overly complicated,” “rushed” and “flawed.” They argue the fixed rate proposal will have the opposite effect of lowering energy bills.
“The proposal by the big three energy companies to create a fixed-rate fee structure is crazy,” said Sen. Brian Dahle (R-Bieber), vice chair of the Senate Energy, Utilities and Communications Committee. “It will make electricity even more expensive and living in California less affordable. Californians already pay energy rates that are up to 80 percent higher than the national average, and schemes like this are what make it that way.”
In response to the GOP criticism, a spokesperson for Southern California Edison, which serves 15 million customers, points out that it was the California State Assembly -not utilities- that mandated the changes. Even so, SCE believes the fixed-rate system combined with lower kilowatt-hour rates will result in lower bills.
“We feel we’ve come up with a proposal that will benefit the majority of our customers,” Kathleen Dunleavy told KTLA on Monday.
State law requires the CPUC to adopt a new rate structure by July 1, 2024. SCE says the earliest customers would see the updated bills is 2025.