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To lower energy costs, California wants to tie bills to income. That plan is making enemies

Ari Plachta, The Sacramento Bee on

Published in News & Features

SACRAMENTO, Calif. — California is already home to some of the highest energy costs in the country, and those prices are only expected to rise as the state powers more of its economy with clean electricity.

Now a state plan to lower electricity rates and relieve the burden on low-income households, in particular, is sparking conflict among lawmakers, utilities and clean energy advocates.

At the core of the tension is whether the state’s three major investor-owned utilities should begin charging customers a predetermined amount for the delivery of power roughly based on household income, while lowering prices for actual energy use.

Supporters say this ‘fixed charge’ would shift more of the growing costs to power California on higher-income households. It will also keep overall rates down, they argue, to help encourage the adoption of electric vehicles and home appliances.

Opponents say the charge would punish those who have invested money in making their homes more energy efficient by installing rooftop solar. They also have privacy concerns related to providing income data to utilities.

California Assemblymembers Jacqui Irwin, D-Thousand Oaks, and Marc Berman, D-Menlo Park, introduced a bill last month that would grind the state’s process on this plan to a halt, arguing that the legislature should pursue other options.


Irwin noted that something as straightforward as encouraging electric vehicle charging at off-peak hours can dramatically reduce the need for expensive grid upgrades that utility regulators say are needed.

“We’re shifting around the chairs on the Titanic,” Irwin said in an interview. “As opposed to arguing about how we rearrange this to make it fair, we need to look at the bigger picture and drive down costs for everybody.”

High and rising costs

California’s electricity rates are 25% higher than the national average, and nearly one in four customers of the state’s largest utilities are behind on their bills.


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