Electric bills could soon depend not only on how much energy you use, but also how much money you make, according to California Assembly Bill No. 205. It requires the three major private utility companies — PG&E, Southern California Edison, and San Diego Gas — to submit a billing structure plan based on household income to the California Public Utilities Commission.
The companies submitted a joint plan this spring, and the commission has until next summer to approve it. The state hopes the new initiative will incentivize more residents to switch from gas to electric, but it’s also received a lot of blowback.
The proposal only applies to three major investor-owned utility companies, and does not apply to smaller municipal authorities, such as LADWP in Southern California.
Under this new plan, bills are split into two categories: fixed and variable charges, meaning half of your bill would be tied to electricity usage and the other would be tied to household income, says Shannon Osaka, climate reporter with the Washington Post.
She says money from fixed charges will be applied to the electrical grid and other infrastructure upgrades that will help the state mitigate climate change. The variable charge will cover the cost of delivering electricity to a household.
Osaka says she’s heard of criticism from richer Californians who have invested in electric alternatives at home, including solar panels, heat pumps, and electric vehicles.
“The people who are upset are saying, ‘I want to be able to lower my bills below $100 a month. … On the flip side, supporters say, ‘Well, what this will do is it will lower the use-based rate because we're taking the fixed charge out of it.’ And so they're hoping that this will motivate particularly people of middle and lower incomes to switch over from gas to electricity and things like that, because the cost of the electricity that they're using is a bit lower."
Meanwhile, new changes for California’s solar power provisions are rolling out.
Osaka explains, “If you had solar panels on your home that were covering more than the electricity that your home actually uses, then you would be getting money paid to you from the utility companies. … They have recently turned down those incentives so that people with solar are not getting quite as many benefits.”
At the crux of the issue, as Osaka points out, is what role these utility companies play.
“A lot of Californians are frustrated with the investor-owned utilities. They think that the utilities are taking home too many large profits and paying their senior executives too much. But I think that there has been a long struggle to actually regulate the utilities more strictly in California. And I think that's going to continue to play out.”