The California Public Utilities Commission approved a proposal for a fixed utility charge on Thursday with a 4-0 vote. Californians already pay some of the highest electricity rates in the country. This vote will change how investor-owned utilities (IOUs) charge their customers. In KCRA 3’s coverage area of Northern California, this would impact Pacific Gas and Electric Co. customers. Experts say the revenue-neutral change for utilities could save some people — namely those with low incomes and electric car owners — money on their monthly bill while others will pay more. Here’s what you need to know about the approved proposal, which lawmakers ordered as part of a 2022 law. Residential electricity bills would have 2 parts: a usage rate and a flat rate. California has been one of the only states where IOUs like PG&E do not have a flat rate for infrastructure and maintenance costs. In contrast, publicly-owned utilities like SMUD in Sacramento have flat rates.The new system is aimed at reducing the cost for people heavily impacted by extreme weather like a heat wave and also those who charge their electric cars at home.Usage Rate: The proposal should lower the usage rate by 5-7 cents per kilowatt hour. The rate will still vary throughout the day to encourage conservation, according to a fact sheet from the Public Utilities Commission. Rates for customers of the state’s big three utilities could fall between 8% and 9.8% during peak hours, The Associated Press reported. Flat Rate: The proposed flat rate is $24.15 per month, the same amount as SMUD’s flat rate. This flat rate would be discounted for people with lower incomes, $6 or $12 depending on the program. The CPUC says the $24.15 rate it recommends is on the lower end of a slate of proposals that topped out at $73. PG&E had recommended a $51 flat fee. How much money will people save? It depends on where you live, your income and how much electricity you use. PG&E customers are divided into “climate zones,” and most of those in KCRA 3’s coverage area are in the climate zone “S.” Bills of PG&E customers with average usage would save about $1.47 a month. People enrolled in the low-income program, California Alternate Rates for Energy (CARE), should save $5.74 a month with PG&E. About 30% of IOU customers make up this category, according to the state. It impacts households that earn below 200% of the federal poverty line. That changes to $12.63 savings for those PG&E customers who are enrolled in another income-qualified program, Family Electricity Rate Assistance (FERA). This impacts households that earn between 200% and 250% of the federal poverty line.Those who live in other climate zones aren’t as fortunate. PG&E customers in climate zone “Z” in the northernmost part of the state who aren’t enrolled in low-income programs will see an increase of $11.50 in their monthly bill. People in the Santa Cruz area, climate zone “T,” would have a $9.11 increase. People with electric cars and wealthier customers will likely benefit from the new systemThe state says that a customer who electrified their home and vehicle will save $28-44 a month on average, compared to the current rates. Customers who already don’t use very much power don’t get the benefit of a lower hourly rate. The Sierra Club said the $24 fixed rate “is likely to raise monthly bills for low energy usage lower-middle-class customers while lowering bills for wealthier consumers who tend to use more energy.”Protesters outside meeting worried their rates will increaseDozens of people opposed to the new billing system gathered outside the CPUC meeting Thursday. They called themselves the “Stop the Big Utility Tax Coalition,” and were comprised of renters, seniors, affordable housing advocates and environmentalists.They said that the fixed charge will result in overall higher electricity bills for people who use lower amounts of electricity and who just missed the cutoff to qualify for low-income programs.Shar Thompson, Central Valley Regional Coordinator for Tenants Together, said the CPUC should focus on keeping costs low for all Californians, including those who earn only a moderate amount of income.”You’re really stretching your dollars at the end of the month,” Thompson said. “It’s the lower class, middle class, disabled, and the working class that they need to look out for.”Thompson added that higher electricity bills could mean sacrificing other needs.”People have to choose food and medicine, these utilities over food and medicine, and that’s just not right. Nobody should have to say, ‘I’m sorry, kid. I know you’re sick,’ and not be able to afford medication because of a utility.”Concerns over potential increases to the flat rate in the futureSome PG&E customers said another worry they have is if the $24.15 fixed flat rate goes up in the future. They brought up that there is no mention of any”If it’s uncapped, the sky is the limit,” PG&E customer Marshal Merriam said. “Because it’s uncapped, I foresee it rapidly becoming quite a bit larger, and I suspect that in a year’s time, we’ll see it doubled.”But CPUC commissioner Darcie Houck said any potential revisions to the flat rate will be watched closely and ensured that safeguards will be put in place.“Electricity bills in California are high, and it is critical that we do not allow the fixed portion of these fixed bills to increase rapidly or unreasonably, and I was pleased to see the revisions in the decision that’s before us today that require any adjustments to the fixed charge to be addressed in this processing or a successor proceeding and not through the general rate case. There needs to be a careful scrutiny and guardrails placed on any proposed adjustments to a fixed charge in future phases or in a successor proceeding. We will need to look holistically at rate revision if we’re going to make any headway on ensuring affordability for all ratepayers.” Houck said.Supporters see the CPUC’s decision as a ‘win’Cynthia Martinez, spokesperson for the Predictable Power Coalition, praised the CPUC for their vote Thursday to approve the new bill structure proposal.”Because of their action today, relief is coming to Californians who need it most,” Martinez said. “Everyone will benefit from lower volumetric rates, and so, if people conserve, there’s still definitely an incentive to do so, because those rates are called out separately and you’ll be able to see lower bills because of it.”The Predicable Power Coalition also said having a residential fixed charge is popular with consumer groups, labor and environmental organizations because “it will help lower bills for lower-income households, and help California transition to a more equitable clean energy future.”CPUC President Alice Busching Reynolds said the changes will benefit people living the hottest climate zones in California. She also said for people concerned about the fixed rate, that the usage rate portion of the bill still remains, so the bill will still vary depending on how much electricity someone uses. She added utilities such as PG&E will not profit from the changes.”The proposal ensures that utilities cannot increase the costs they collect or make any profit. This is because the proposal simply redistributes costs associated with running the electric grid in a more equitable manner,” Reynolds said.When will the change take effect? The change will take effect starting in 2026 for PG&E customers. Learn more about the proposal here. | DIG DEEPER WITH KCRA 3 INVESTIGATES | Former CPUC president calls out agency for skyrocketing PG&E ratesSee more coverage of top California stories here | Download our app.
The California Public Utilities Commission approved a proposal for a fixed utility charge on Thursday with a 4-0 vote.
Californians already pay some of the highest electricity rates in the country. This vote will change how investor-owned utilities (IOUs) charge their customers.
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In KCRA 3’s coverage area of Northern California, this would impact Pacific Gas and Electric Co. customers. Experts say the revenue-neutral change for utilities could save some people — namely those with low incomes and electric car owners — money on their monthly bill while others will pay more.
Here’s what you need to know about the approved proposal, which lawmakers ordered as part of a 2022 law.
Residential electricity bills would have 2 parts: a usage rate and a flat rate.
California has been one of the only states where IOUs like PG&E do not have a flat rate for infrastructure and maintenance costs. In contrast, publicly-owned utilities like SMUD in Sacramento have flat rates.
The new system is aimed at reducing the cost for people heavily impacted by extreme weather like a heat wave and also those who charge their electric cars at home.
Usage Rate: The proposal should lower the usage rate by 5-7 cents per kilowatt hour. The rate will still vary throughout the day to encourage conservation, according to a fact sheet from the Public Utilities Commission.
Rates for customers of the state’s big three utilities could fall between 8% and 9.8% during peak hours, The Associated Press reported.
Flat Rate: The proposed flat rate is $24.15 per month, the same amount as SMUD’s flat rate. This flat rate would be discounted for people with lower incomes, $6 or $12 depending on the program.
The CPUC says the $24.15 rate it recommends is on the lower end of a slate of proposals that topped out at $73. PG&E had recommended a $51 flat fee.
How much money will people save?
It depends on where you live, your income and how much electricity you use.
PG&E customers are divided into “climate zones,” and most of those in KCRA 3’s coverage area are in the climate zone “S.” Bills of PG&E customers with average usage would save about $1.47 a month.
People enrolled in the low-income program, California Alternate Rates for Energy (CARE), should save $5.74 a month with PG&E. About 30% of IOU customers make up this category, according to the state. It impacts households that earn below 200% of the federal poverty line.
That changes to $12.63 savings for those PG&E customers who are enrolled in another income-qualified program, Family Electricity Rate Assistance (FERA). This impacts households that earn between 200% and 250% of the federal poverty line.
Those who live in other climate zones aren’t as fortunate. PG&E customers in climate zone “Z” in the northernmost part of the state who aren’t enrolled in low-income programs will see an increase of $11.50 in their monthly bill. People in the Santa Cruz area, climate zone “T,” would have a $9.11 increase.
People with electric cars and wealthier customers will likely benefit from the new system
The state says that a customer who electrified their home and vehicle will save $28-44 a month on average, compared to the current rates.
Customers who already don’t use very much power don’t get the benefit of a lower hourly rate.
The Sierra Club said the $24 fixed rate “is likely to raise monthly bills for low energy usage lower-middle-class customers while lowering bills for wealthier consumers who tend to use more energy.”
Protesters outside meeting worried their rates will increase
Dozens of people opposed to the new billing system gathered outside the CPUC meeting Thursday. They called themselves the “Stop the Big Utility Tax Coalition,” and were comprised of renters, seniors, affordable housing advocates and environmentalists.
They said that the fixed charge will result in overall higher electricity bills for people who use lower amounts of electricity and who just missed the cutoff to qualify for low-income programs.
Shar Thompson, Central Valley Regional Coordinator for Tenants Together, said the CPUC should focus on keeping costs low for all Californians, including those who earn only a moderate amount of income.
“You’re really stretching your dollars at the end of the month,” Thompson said. “It’s the lower class, middle class, disabled, and the working class that they need to look out for.”
Thompson added that higher electricity bills could mean sacrificing other needs.
“People have to choose food and medicine, these utilities over food and medicine, and that’s just not right. Nobody should have to say, ‘I’m sorry, kid. I know you’re sick,’ and not be able to afford medication because of a utility.”
Concerns over potential increases to the flat rate in the future
Some PG&E customers said another worry they have is if the $24.15 fixed flat rate goes up in the future. They brought up that there is no mention of any
“If it’s uncapped, the sky is the limit,” PG&E customer Marshal Merriam said. “Because it’s uncapped, I foresee it rapidly becoming quite a bit larger, and I suspect that in a year’s time, we’ll see it doubled.”
But CPUC commissioner Darcie Houck said any potential revisions to the flat rate will be watched closely and ensured that safeguards will be put in place.
“Electricity bills in California are high, and it is critical that we do not allow the fixed portion of these fixed bills to increase rapidly or unreasonably, and I was pleased to see the revisions in the decision that’s before us today that require any adjustments to the fixed charge to be addressed in this processing or a successor proceeding and not through the general rate case. There needs to be a careful scrutiny and guardrails placed on any proposed adjustments to a fixed charge in future phases or in a successor proceeding. We will need to look holistically at rate revision if we’re going to make any headway on ensuring affordability for all ratepayers.” Houck said.
Supporters see the CPUC’s decision as a ‘win’
Cynthia Martinez, spokesperson for the Predictable Power Coalition, praised the CPUC for their vote Thursday to approve the new bill structure proposal.
“Because of their action today, relief is coming to Californians who need it most,” Martinez said. “Everyone will benefit from lower volumetric rates, and so, if people conserve, there’s still definitely an incentive to do so, because those rates are called out separately and you’ll be able to see lower bills because of it.”
The Predicable Power Coalition also said having a residential fixed charge is popular with consumer groups, labor and environmental organizations because “it will help lower bills for lower-income households, and help California transition to a more equitable clean energy future.”
CPUC President Alice Busching Reynolds said the changes will benefit people living the hottest climate zones in California. She also said for people concerned about the fixed rate, that the usage rate portion of the bill still remains, so the bill will still vary depending on how much electricity someone uses. She added utilities such as PG&E will not profit from the changes.
“The proposal ensures that utilities cannot increase the costs they collect or make any profit. This is because the proposal simply redistributes costs associated with running the electric grid in a more equitable manner,” Reynolds said.
When will the change take effect?
The change will take effect starting in 2026 for PG&E customers. Learn more about the proposal here.
| DIG DEEPER WITH KCRA 3 INVESTIGATES | Former CPUC president calls out agency for skyrocketing PG&E rates
See more coverage of top California stories here | Download our app.
