The California Public Utilities Commission on Thursday approved a restructuring of electricity rates aimed at cutting bills for lower-income households and incentivizing the adoption of climate-friendly electric vehicles and heating systems.
Assuming there are no delays, the new rate structure will not go into effect until late 2025 for Southern California Edison and San Diego Gas & Electric customers, and early 2026 for PG&E customers.
Advocates say that the high bills Californians are likely to experience this summer reinforce the need for a more equitable rate structure and the ongoing need for action from policymakers.
The decision reduces the per-unit cost of electricity for all customers. At the same time, it introduces a “flat rate” charge to cover infrastructure expenses, with the amount varying according to household income.
While the overall impact on bills across the board is expected to be modest, the new rate structure paves the way for regulators to deliver more substantial savings for low- and moderate-income customers in the future.
Under the new rates, customers who electrify their home and vehicle under the new rates will save an average of $28-44 per month compared to previous rates.
Proponents said the landmark decision will significantly benefit communities most affected by extreme heat by lowering their summer cooling costs.
“With temperatures soaring into the 80s and 90s this week, we are reminded of the importance of affordable electricity for Californians. Households shouldn't face financial strain just to stay cool during hotter days, especially those residing in Inland regions. By lowering the price of electricity for all and incorporating an income-graduated component, the CPUC is modernizing its approach and taking an important step to ensure electricity is affordable for all,” said Sylvie Ashford, energy and climate policy analyst, for The Utility Reform Network, or TURN.
“With this decision, California gains a new tool to tackle the high electricity bills and promote electrification. The rate structure approved today is an important first step, but we must do more to achieve substantial savings for low- and moderate-income households. Electricity is a basic need especially as the clean energy transition advances — it should be affordable to all and cheaper than polluting fossil fuels,” said Mohit Chhabra, Senior Analyst at Natural Resources Defense Council, or NRDC.
“We commend the Commission for moving expeditiously on the flat rate decision. The decision will reduce the price of electricity for all customers and reduce bills overall for low- income households. While more must be done to lower rates, the flat rate moves the needle toward addressing the rates affordability crisis that Californians are facing,” said Linda Serizawa, interim director of the Public Advocates Office.
California regulators approve new electricity rate structure to lower bills amid soaring rate increases
- Lake County News reports
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