May 13, 2024 - News

California to add fixed fee to electric bills, reduce rates

Photo of a row of washing machines at an appliances store

Washing machines on sale at a store in San José in 2019. Photo: David Paul Morris/Bloomberg via Getty Images

The California Public Utilities Commission (CPUC) approved a new electricity billing structure last week that will introduce a monthly fee for fixed infrastructure costs while requiring investor-owned utilities to reduce usage rates.

Why it matters: California's electricity bills are among the highest in the nation. The CPUC says the change will lower the price for a unit of electricity for all customers, with a focus on reducing bills for lower-income people and those living in regions most impacted by extreme weather.

Details: The new billing system cuts the usage rate — the price a residential customer pays for a unit of electricity, like when using an air conditioner — by 8% to 18% depending on the utility and season, CalMatters notes.

  • The usage rate will also vary throughout the day to "encourage conservation," per a fact sheet.
  • Meanwhile, the new monthly fee, which will encompass costs like maintaining power lines that were previously included in usage rates, will be $24.15 per month for most customers and either $6 or $12 for lower-income households.

What they're saying: "This billing adjustment makes it cheaper across the board for customers to charge an electric vehicle or run an electric heat pump, which will spur greater uptake of these technologies that are essential to transitioning us away from fossil fuels," CPUC President Alice Reynolds said in a press release.

Yes, but: The decision has sparked criticism from some environmental and housing activists who accuse the CPUC of reducing penalties on high energy use and imposing a "Big Utility Tax."

What's next: The new billing structure is expected to take effect as early as late 2025.

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