Next year Californians will be charged for electricity in part based on how much money they make, a social equity move designed to help lower-income families.
The big picture: Assembly Bill 205, passed in 2022, aims to address the issue by introducing income-based fixed charges for electricity in order to lower bills for low-income customers.
- The California Public Utilities Commission (CPUC) has until July 1, 2024, to figure out the details of how the income-based fixed-pricing will work in accordance with AB 205.
- The fixed charges would cover costs such as power line maintenance, energy efficiency, and wildfire prevention, which are currently included in kilowatt-hour usage costs.
- Californians will still be on the hook for how much electricity they use, but the fixed-rate will reduce the kilowatt usage rate that customers pay.
What we’re watching: Multiple proposals are being considered, including those submitted by utility companies and consumer groups.
- Under the proposal from the utilities, customers who are enrolled in the California Alternate Rates for Energy Program (CARE) would have a $15 fixed charge per month if they have incomes that are 100 percent or less than the federal poverty level. All other CARE members and people who are enrolled in the Family Electric Rate Assistance Program (FERA) would see monthly costs of $30.
- PG&E would charge customers $51 per month if they have incomes between 100 percent and 650 percent of the federal poverty level. All other customers would pay $92 every month.
- Proposals from consumer groups include one from the Solar Energy Industries Association, which would have a lower fixed cost for all customers who have solar, regardless of their income level. The maximum monthly fixed cost under that proposal would be $9.09.
- Other ideas include a proposal from the California Environmental Justice Alliance to have no monthly fixed charge for all CARE customers and everyone who makes less than $100,000 annually.
