Proposed Income-Based Billing for Electricity in Southern California

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A proposal currently under consideration may result in Southern California residents experiencing changes in their electricity billing in the near future. The proposed plan would necessitate households to report their income to utility providers, with a fixed rate being established based on the reported income.

Pacific Gas & Electric (PG&E), Southern California Edison, and San Diego Gas & Electric have presented the proposal to the state Public Utilities Commission. The commission has until mid-next year to finalize the details of this significant overhaul.

This development follows the enactment of Assembly Bill 205, which was signed into law by Governor Gavin Newsom last summer. The bill expanded the jurisdiction of the California Energy Commission and required the three utilities to finalize a new fixed-rate structure to be approved by July 2024.

As reported by The Mercury News, the proposal aims to restructure the current billing system, primarily based on usage, by introducing new income-based fees and reducing baseline electricity costs by 33 percent.

PG&E contends that the proposal will result in lower bills for some customers and provide more stability in charges between months.

KTLA's coverage indicates that households with annual incomes ranging from $28,000 to $69,000 would be subject to a flat fee of $20 for Southern California Edison bills, $30 for PG&E, or $34 for San Diego Gas and Electric. Households earning between $69,000 and $180,000 would face an additional monthly fee of $51 in Edison and PG&E regions or $73 for San Diego Gas and Electric's grid. The highest income brackets would pay monthly fees ranging from $85 to $128. Officials have informed commissioners that these charges will contribute to covering the costs of building and maintaining electricity infrastructure and provide financial relief for low-income customers.

In exchange, San Diego Gas & Electric would reduce rates by 42 percent, and Southern California Edison would implement a 33 percent rate reduction for all residential customers.

The Mercury News states that PG&E anticipates many customers will see lower bills, and those with increased costs will experience a "relatively small bill impact." KTLA reports that a third party would be responsible for verifying each customer's income, which would not be stored by the utilities.

If the commissioners approve the overhaul by next summer, Californians can expect to see these changes implemented by 2025.


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