California lawmakers seek to short-circuit new income-based utility charges

GOP and Dems eye plans to overturn hastily approved billing scheme

OAKLAND — Multiple efforts are underway on both sides of California’s political divide to short-circuit a 2022 law that would impose new income-based fixed fees on customers of PG&E and other utility leviathans.

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Democrats and Republicans in the state legislature have crafted separate measures designed to quash a plan to implement the fee that lawmakers hastily approved in an 11-hour proceeding.

PG&E, Southern California Edison and San Diego Gas & Electric would be able to impose the new charge on their customers if the state Public Utilities Commission gives the plan a final OK — potentially by this spring or summer. Newsom, who signed the bill, appointed all five current members of the powerful commission.

RELATED: PG&E profits hop higher as revenue from electricity and gas surges

The legislative efforts seek to either overturn or drastically alter the 2022 law, AB 205, a wide-ranging energy bill including a one-sentence provision that directed the utility commission to study income-based fixed charges and then decide on their implementation by no later than June 30 of this year.

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The provision in the legislation was intended to help encourage a transition to greater electrification and energy conservation in California as part of a shift away from reliance on fossil fuels, along with making utility bills more affordable for low-income customers. Critics, though, warn the bill might actually produce higher monthly bills.

The state lawmakers involved in the various efforts to overturn the income-based utility charge plan include Assembly Democrats Marc Berman of Menlo Park and Jacqui Irwin of Thousand Oaks, and Senate Republican Brian Dahle, Shannon Grove, Janet Nguyen, Roger Niello, Rosilicie Ochoa Bogh, Kelly Seyarto, and Scott Wilk.

What’s more, 22 state lawmakers wrote to the utility commission’s president in October warning that the powerful California regulatory agency might be racing too quickly — and with no public input — to decide on the income-based fees.

“At a minimum, more time will be needed to consider such a significant and far-reaching change in policy that will significantly impact ratepayers with only a theoretical benefit,” the lawmakers wrote.

Several experts led by Ahmad Faruqui, an economist who has consulted with all three of the utility behemoths, have provided an array of reasons that regulators should reject the current proposal, including the fact that PG&E bills are already rising far faster than the Bay Area inflation rate.

“The proposed fixed charges are way too high compared to the national landscape,” Faruqui and the group of economists wrote. “The fixed charges will be burdensome for many, infeasible to administer, are likely to be challenged in court and are likely to unleash adverse unintended consequences, such as penalizing customers who use energy efficiently and frugally.”

Advocates for Income-based fees, including The Utility Reform Network (TURN) and the National Resources Defense Council, say that higher-income customers will tend to pay more, while lower-income customers will pay less. Proponents also claim that PG&E and the other utilities intend to lower the kilowatt-hour rates they charge customers as a way to offset the fees.

Even so, TURN and the environmental group concede that fixed fees are far from a complete solution. Despite their support, the groups wrote in a filing with the state that they recognize “the development of a progressive fixed charge does not represent a silver bullet and will not, on its own, make customer bills affordable.”

State lawmakers are increasingly alarmed about the income-based fee proposal.

“Too many Californians struggle to afford their electricity bills at a time when energy is already unreliable, and yet the legislature thought it was a good idea to rip people off more,” Wilk, a Santa Clarita Republican, said in a prepared release this week.

The fixed-income proposal has surfaced at a time when PG&E bills, along with the bills charged by the other two utility titans, have skyrocketed.

Click here to read the full article in the Mercury News

Comments

  1. Stupidfornia utility bills are more than double the national average. WHY? Allegedly, we have 40 mil people. Why can’t utilities benefit from economies of scale like businesses? Where is our money going? Check out salaries and benefits. You might be surprised.

  2. The legislature does not need to change the planning to charge utility charges based on income, they need to kill the plan altogether.

  3. After hiking rates this year, PG&E announces nearly 25% increase in profits for 2023
    PG&E announced on Thursday that it saw an almost 25 percent increase in profits for 2023. This comes after the utility company slapped customers with substantial rate hikes at the beginning of this year.

    Read in ABC7 Bay Area: https://apple.news/AclPl462tQxC1STlbDWjsGw

    Enough said.

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