California Public Utilities Commission approves new billing system Thursday
SACRAMENTO, Calif. – On Thursday, the California Public Utilities Commission approved a new utility billing structure that includes a flat rate and a reduction in electricity usage rate.
The new rate structure will go into effect in late 2025 for customers of Southern California Edison and San Diego Gas & Electric and early 2026 for Pacific Gas & Electric customers.
According to the California Public Utilities Commission, the flat rate will be $24.15 per month for most customers and all customers will see an electricity usage rate reduction of five to seven cents per kilowatt-hour.
Customers enrolled in the California Alternate Rates for Energy (CARE) income-based assistance program will have a discounted flat rate of $6 per month stated the California Public Utilities Commission.
The California Public Utilities Commission added that those enrolled in the Family Electric Rate Assistance Program (FERA) or those residing in deed-restricted housing with incomes at or below 80 percent of the area median income will qualify for a flat rate of $12 per month.
"This new billing structure puts us further on the path toward a decarbonized future, while enhancing affordability for low-income customers and those most impacted from climate change-driven heat events," said California Public Utilities Commission President Alice Reynolds. "This billing adjustment makes it cheaper across the board for customers to charge an electric vehicle or run an electric heat pump, which will spur greater uptake of these technologies that are essential to transitioning us away from fossil fuels."
The new billing system does not add new fees nor add extra profits for utility companies and instead redistributes existing costs included in usage rates into a separate line item identified as the "flat rate" charged to consumers explain the California Public Utilities Commission.
Those fixed infrastructure costs to be charged now as the flat rate include maintaining power lines and equipment detail the California Public Utilities Commission.
These changes were part of Assembly Bill 205, signed into law on Jun. 30 of 2022.
Below is a comparison of flat rate proposals reviewed by the California Public Utilities Commission.
The California Public Utilities Commission note that California was one of the only states where investor-owned utilities do not have flat rates charged for infrastructure and maintenance costs.
Additionally, the California Public Utilities Commission compared the newly-approved flat rate to other publicly-owned utility providers in the state.
While the California Public Utilities Commission touts that the new flat rate will lower the average energy bill for consumers, that lower energy consumption rate as well as the flat rate itself are still subject to change in the future.
Additionally, the new flat rate functions as a utility use tax intended to pass the cost of energy infrastructure maintenance onto residential customers.
The losers in the vote are households that use less energy, who typically live in smaller homes and apartments and have lower incomes, as the new tax represents a larger percent of their monthly bill. That includes many seniors, renters, and working-families, totalling more than 4 million households across California.
Because the new utility tax disincentives energy conservation and could discourage users of gas appliances to switch to electric ones, California’s fight against climate change is also a loser in the CPUC’s vote.
It is disappointing to see the CPUC once again side with the interests of big utilities over struggling households and our climate goals, awarding them a monthly fixed charge that is twice the national average when they should be telling consumers that they are diligently reigning in the exorbitant salaries and bonuses enjoyed by those running the utilities.
-Bill Allayaud, Director of California Government Affairs for the Environmental Working Group
