In fact, the proposal is controversial enough that some lawmakers are now trying to put a stop to it.
Last month, California Assemblymembers Jacqui Irwin (D-Thousand Oaks) and Marc Berman (D-Menlo Park) introduced a bill that would overturn a provision of a state law passed in 2022 that orders the California Public Utilities Commission to study and institute an “income-graduated fixed charge” for customers of the state’s three big utilities.
The newly introduced bill, AB 1999, would limit the CPUC to adding a fixed charge of no greater than $10 a month on customers’ bills to pay for the rising costs of maintaining the state’s utility grids, regardless of household income. That’s an amount far lower than what’s been proposed under several income-based rate plans.
The problem with charging customers based almost solely on how much electricity they use, fixed-charge advocates say, is that the utilities’ biggest expenses aren’t linked to how much energy customers use but to delivering that power in the first place.
“Surprising ratepayers with a large fixed fee in their utility bills will set us backward on reaching our clean energy and grid resilience goals,” Edson Perez, California policy lead at Advanced Energy United, a trade group representing companies that both provide and purchase clean energy, said in a statement. “It will punish middle- and low-income families who already have low monthly energy usage or who have invested in energy efficiency upgrades or home solar and storage systems.”
Utilities are asking the California legislature to pass a law that would allow the California Franchise Tax Board to supply data to the CPUC to create an anonymized database that utilities could use to rank customers into various income classes.
But until such a law is passed, utilities would have to make use of the “income-verification” processes they now use to enroll customers in low-income assistance programs, which require customers seeking bill reductions to provide documentation proving their household income, Baker said. For use in assessing income-based fixed charges, that process might default all customers into the highest income bracket, then require each customer to prove to their utility that they earned less than that amount.
That creates the risk of “a whole range of consequences for customers who fall through the cracks,” said Brian Turner, Advanced Energy United’s Western states policy director. If that policy is enacted, “we think there are going to be a whole bunch of news stories about folks slapped with high charges when they don’t deserve it” because they weren’t aware that they needed to tell their utility that they don’t earn as much money as they were assumed to.
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