California Wants To Charge For Electricity By Income

Beginning in 2025, the amount of your electricity bill in California may change depending on your income level.

Last year, Assembly Bill 205 was passed, and it will split up customers’ payments while also providing rate relief. But Southern California Edison’s Kathleen Dunleavy stated, “This is not a new charge.”

The monthly fee would be broken down into a fixed rate and a lower use charge based on consumption under this plan. 

According to Dunleavy, there have always been set costs included in the price of the electricity we need to run our home’s appliances and light bulbs. Electricity use (measured in kilowatt-hours) and fixed costs associated with delivering electricity make up the bulk of your monthly bill. Construction and upkeep of the power grid, customer service, energy conservation initiatives, and other fixed costs all go into the overall picture.

According to Dunleavy, the state asked the utility companies to break down those charges in the spirit of transparency, so when consumers see their bills, they’ll see that this amount will maintain the infrastructure.

Under the plan, over half of SCE’s customers would have cheaper costs, assuming no change in electricity use, while the company’s 1.2 million lowest-income customers would enjoy an average 16%-21% price drop.

A combined proposal outlining the new rate structure was presented to the state’s Public Utilities Commission last week.

The state already has the highest top-income tax rate in the US, at an astounding 13.3 percent on the wealthiest earnings, so this idea will surely incite controversy there.

Due to peak demand during a heat wave and the lack of investment in new power generation capacity, the state experienced significant electricity shortages last summer.

Aging wires have been known to cause flames in high winds; therefore, the state’s power companies, especially Pacific Gas & Electric (PG&E), have been blamed for their role in wildfires.

Dunleavy has stated that a state agency or a third-party vendor will be responsible for determining a customer’s income, but many of the specifics are still up in the air.