California Wants To Charge for Electricity by Income

California Wants To Charge for Electricity by Income

( – California’s largest power companies want to change how residents pay their electric bills. Those companies — Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric, recently sent a joint application to the Golden State’s Public Utilities Commission outlining a new rate structure partially based on income.

On April 14, KTLA reported that the three power companies propose charging households a fixed rate for the basic electrical services included in customers’ bills. Those fees include the cost of meters and the wires that transport electricity from the grid to homes and businesses. They also cover costs associated with accounting for bill payments, maintaining customer records, and reading meters.

Under the new proposal, those fees won’t change based on consumers’ level of energy use. Instead, the companies will set a flat rate for those fees based on users’ household income.

Hydra Host data center co-founder Aaron Ginn posted a tweet outlining the power companies’ proposed three-tier system. His post shows a price range for each income level that customers can expect to pay based on which of the three companies provides their electricity.

In June 2022, California lawmakers passed Assembly Bill 205 (AB 205), which paved the way for the joint proposal. The measure requires energy companies to simplify their bills. It also mandates they create a fixed charge for basic services for customers “established on an income-graduated basis,” using at least “three income thresholds.” According to the bill’s senate floor analysis, low-income ratepayers “would realize [a] lower average… bill without… any changes in usage.”

The utility companies claim the proposal would “lower the average amount” all of their customers pay for each kilowatt hour of usage. They also noted the new system would improve “billing transparency and predictability.”

Breitbart News predicted the proposal would “provoke outrage,” Southern California’s KUSI News recently reported the proposed rate change faces backlash from some customers and politicians. For instance, San Diego Supervisor Jim Desmond issued a statement calling the joint proposal “an absurd idea” that would cost median-income residents $876 per year regardless of whether they consume electricity.

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