A Major Change to Electric Utility Billing in California

By Ranger Dorn, EIS Council

June 8, 2023

There is a soon-to-be-implemented rule that has many electric company customers upset. It will include a flat rate based on personal income plus billing for usage. Californians currently pay almost double what the rest of the country pays for electricity. The flat base rate for all, depending on personal income, would range from a proposed $5 on the low end up to $128 per month at the high end before adding a charge for usage. A house could use zero electricity monthly and still have a substantial bill. Many residents will pay more than they currently do, especially those who paid the high cost of installing solar systems. The savings from using solar systems would be largely erased. This is the second major upheaval in the home power pricing process in a year. The amount the power companies have to pay for any excess solar produced by rooftop solar systems was reduced greatly for new systems as of April 15 this year. 

The stated goals of the new billing are to speed up the conversion of homes to all-electric, help those with lower income buy electric vehicles and heat pumps, and finance the hardening of the grid in wildfire areas for private power companies. 

The provision to convert to income-based electric billing went unnoticed when it was included in a bill, AB 205, to extend California’s last operating nuclear power plant, Diablo Canyon, with no Legislator’s name attached to it. The first that many in public heard of it was when the media picked up the story after the three largest investor-owned utilities partnered to present a proposed rate structure. Other groups have presented proposals as well for consideration before the program is implemented.     

The stated goals of the new billing are to speed up the conversion of homes to all-electric, help those with lower income buy electric vehicles and heat pumps, and finance the hardening of the grid in wildfire areas for private power companies. The question of how this new structure would apply to rental units and businesses is a little murky. The implications for the rest of the country remain to be seen.

An article explaining the billing and the implementation: California’s electricity bills could soon be based on how much you make — and some people are furious (msn.com)

Language to the CPUC of the proposal from the three large power companies in California.

Microsoft Word – R2207005 Joint Large IOU Testimony (4.7.23).docx (ca.gov)

The background behind the new billing process from Next10. 

https://www.next10.org/sites/default/files/2022-09/Next10-paying-for-electricity-final-comp.pdf 

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