CPUC approves a $24 fixed fee for utility customers’ monthly electricity bill
SACRAMENTO, CA—The California Public Utilities Commission (CPUC) has approved a monthly fixed fee that will be added to customers’ monthly utility bills. This fee is a result of a 2022 bill, Assembly Bill 205, that directed the CPUC to add a fixed charge to utility bills based on household income in exchange for lowering volumetric rates. The approved plan will add a fixed charge of $24.15 to monthly utility bills (reduced to $12 or $6 for lower-income customers).
There is little evidence that the fixed charge will help with electrification efforts, and widespread agreement that it will disincentivize conservation. The CPUC has commissioned no research, conducted no pilots, and marshaled no real-world experience to guide this decision. Instead, the fee will impose a higher cost burden on those households that use the least energy.
Reducing electricity costs is a worthy goal, but the imposition of these fixed charges is likely to negatively impact California’s electrification efforts and discourage investments in energy efficiency and distributed energy resources (DERs) such as rooftop solar and battery storage. This is yet another example in a series of decisions from the CPUC that seem to ignore the role DERs can and should play in achieving California’s clean energy goals.
Edson Perez, California Policy Lead at Advanced Energy United, the national business association, issued the following statement.
“Today, the CPUC dealt another blow to California’s clean energy goals. It is universally recognized, based on decades of experience and study, that the fixed charge will increase costs for Californians who use the least energy and reward those who use the most. It will mean less solar energy and fewer home batteries. And it will mean fewer of the smart, flexible devices, from thermostats to EV chargers, that can help the grid when we need it most.
Perhaps most worryingly, there are no limits set on this program. While today’s decision proposes a relatively modest fixed charge and relies on established low-income programs, the decision allows for a potentially massive expansion in the future, with fixed monthly charges two or three times today’s amounts, and an intrusive income verification program to rival state and federal taxes.
We are disappointed at this rushed and misguided decision. We urge the CPUC to proceed carefully and thoughtfully during implementation, to protect consumers from higher bills and course correct as the real-world effects become clear, and we encourage the legislature to implement safeguards such as those proposed in Assembly Bill 1999 to prevent further blows to our clean energy future.”
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