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Utility Bills Soar as California Imposes Hefty Fixed Charges

Utility Bills Soar as California Imposes Hefty Fixed Charges

May 10, 2024

Utility Bills Soar as California Imposes Hefty Fixed Charges

The California Public Utility Commission (CPUC) has approved an increase in fixed charges for most electricity customers starting in 2025 and 2026. On May 9, the CPUC decided to raise the monthly fixed rate to $24.15 for the majority of customers, with lower rates for those enrolled in low-income assistance programs. The decision affects customers of the state's largest investor-owned utilities, including Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric.

Alice Busching Reynolds, president of the CPUC, stated that the hike is "instrumental in advancing California's decarbonization goals."

"Our electricity rate design needs to evolve to meet this moment in time," she said during the hearing. Fixed charges are set to increase from the current $10.12 for most accounts and $5.06 for the lowest-income households.

Under the new billing plan, households of four earning up to $60,000 annually and enrolled in the California Alternate Rates for Energy (CARE) program will pay a fixed charge of $6 per month, while those earning between $60,001 and $75,000 a year and enrolled in the Family Electric Rate Assistance (FERA) program will pay approximately $12.

The initiative stems from Assembly Bill 205 passed in 2022, which mandated a tiered fixed rate charge based on customers' income levels. The CPUC's approval came just weeks before the July 1 deadline.

Despite the increase in fixed charges, Reynolds claimed customers could benefit overall as the electricity cost per kilowatt-hour will decrease by 5 to 7 cents. However, this may not offset the increased fixed charges for those who use less energy, potentially leading to higher bills, while heavier users could see slight decreases.

Reynolds emphasized the expected increase in energy use as California seeks to electrify the economy through mandates on electric vehicles, homes, and businesses as a central component of the state's climate agenda.

Criticism of the decision has been vocal, with Republican leaders highlighting the negative impact on family budgets and concerns about the lack of a cap on the fixed charge, allowing the CPUC to potentially raise the fee in the future. Sen. Kelly Seyarto and Sen. Brian Dahle expressed concerns about the burden on working families and the detrimental effects of the decision. Minority Leader Sen. Brian W. Jones criticized the approval as "unfair and unjust" and warned of possible future fee increases.

During the public comment segment of the hearing, opponents significantly outnumbered supporters, with many arguing that the plan simply reallocates energy costs without addressing the underlying issues of rising energy costs. Yvette DeCarlo, representing various nonprofit organizations, and a representative of Public Watchdog raised concerns about the regressive nature of the policy and the procedural fairness of the decision-making process.

In the lead-up to the hearing, bipartisan efforts to halt or alter the proceeding included legislative attempts such as Senate Bill 1326 and Assembly Bill 1999, both of which failed to advance.

With Commissioner Matthew Baker recusing himself, the CPUC passed the measure with a unanimous vote of 4-0. As a result, Californians can expect the new rates to be reflected in their bills from late 2025.

The Epoch Times Article


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