Senator Wiener, 9 Other Senators Call On Public Utilities Commission to Reject “Unreasonable and Excessive” Utility-Backed Proposal For Higher Electric Bills

January 30, 2024

SACRAMENTO – Today, 10 Senators led by Senator Scott Wiener (D-San Francisco) released a letter calling on the California Public Utilities Commission (CPUC) to reject a utility-backed proposal that would raise energy bills for millions of Californians by $360-824 per year. The proposed fixed charge is 4-6x higher than similar charges in other states, and removes the incentive for customers to reduce their bill by conserving energy. To date, the CPUC has held no public hearings on this proposal.

Senator Wiener will join Assemblymember Jacqui Irwin — who is leading a group of Assemblymembers — and a coalition opposed to the changes at a 9:30am press conference to discuss alternatives to this bad plan. The press conference will be held in Room 317 of the State Capitol Building in Sacramento.

“Californians already pay some of the highest electric bills in the nation and should not be forced to arbitrarily pay more to cover for a private utility’s poor business decisions,” said Senator Wiener. “The utility-backed proposal would place an unacceptable burden on millions of middle class Californians and remove a critical incentive to conserve energy. The CPUC must respond to public criticism and come up with a better proposal.”

In 2022, the Legislature passed AB 205, which required the CPUC to move the state to an income-based system of paying utility bills, known as an income graduated fixed charge. Under this system, all customers pay a fixed charge set by their income to cover the costs of building and maintaining electrical infrastructure, plus a smaller additional amount to account for the energy they actually use. The CPUC began the rulemaking process to implement this law last year ((R.) 22-07-005).

The fixed charges proposed by the utilities – currently ranging between $51 and $73 for non- CARE and FERA customers, depending on the IOU – would be the highest in the nation. Millions of Californians – including those who live in apartments, condominiums and small homes not covered by subsidized plans like CARE and FERA – will see their bills increase. The fixed charges proposed by the investor-owned utilities are four to six times the national median of $12 adopted by 173 investor-owned utilities.

Data shows that families in smaller homes with low energy usage, who make as little as $40k a year, will see their bills increase annually by as much as $360. These extra costs will come with no discernable benefits, and ratepayers will have no options to lower their bill through conservation. Conversely, large homes with high energy usage (for example in PG&E territory) will see their bills decrease by as much as $824 dollars a year.

The proposed changes also threaten to undermine California’s progress toward our climate goals. There is no evidence that this untested rate structure will promote electrification, as data clearly show that customers respond most strongly to the total size of their electric bill, not small changes at the margin. By removing the opportunity for large savings through major reductions in energy use, the proposed plan would undermine the incentive for customers to cut their electricity usage.