Three major California utility companies are proposing plans to restructure customer billing based on income. Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric state the changes are to make power more equitable, though many customers question if this will result in higher bills.
The utility companies have stated that while this flat fee appears to be an increase for most, they’re expecting about half of their customers to see a 16-21 percent reduction on their monthly statements.
Customers can still reduce their electric bills by reducing energy consumption, but with more people working from home, this could pose another obstacle standing between customers and true savings.
Essentially, higher income brackets will pay more for recurring charges compared to those in a lower bracket and less for those on a fixed income. These proposed changes are not dependent on electric usage, but an additional flat rate fee in addition to energy consumption.
The proposed fixed rate changes are outlined as follows:
- Households with an annual income under $28,000 per year would pay an additional $15 or more per month depending on their territory.
- Households with annual income from $28,000 – $69,000 would pay $20 a month in Southern California Edison territory, $34 a month in San Diego Gas & Electric territory, and $30 a month in Pacific Gas & Electric territory.
- Households earning $69,000 – $180,000 would pay $51 a month in Southern California Edison and Pacific Gas & Electric territories, and $73 a month in San Diego Gas & Electric territory.
- Those with incomes above $180,000 would pay $85 a month in Southern California Edison territory, $128 a month in San Diego Gas & Electric territory, and $92 a month in Pacific Gas & Electric territory.
These fixed charges are earmarked for power poles, electric wires, customer service representatives, and other business-related upkeep costs. They are part of California legislation passed in 2022 signed into effect by Governor Gavin Newsom intended to make electricity more affordable for lower-income households.
The California Public Utilities Commission will come to a final decision sometime next year and flat rate charges will begin rolling out in 2025.