California electric bills may soon be income-based

How California energy bills could soon change

A new proposal for California electric companies would break up monthly charges by two things — the amount of energy you use, and your income.

LOS ANGELES - If you live in California, your electricity bill could soon be affected by how much money you earn, and your bill will start to look different by 2025.

Assembly Bill 205 was approved last year, and would break up customers' bills, while at the same time giving customers relief on their rates. But, Kathleen Dunleavy with Southern California Edison said "This is not a new charge."

California's three largest power companies - Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric - submitted a joint proposal to the Public Utilities Commission outlining a fixed rate restructuring that would be based on one's income.

The plan would break down monthly bills into the fixed rate plus a reduced usage charge based on consumption.

According to Dunleavy, fixed charges have always been built into the kilowatt-hours that we use to power appliances and turn on the lights. Bills are mostly made up of two things — the kilowatt-hours, or the energy you use, and fixed costs for providing electric services. Fixed costs include things like building and maintaining the electric grid; providing customer support; energy efficiency programs and more.

"So what the state has asked the utilities to do is to break out those charges for greater transparency so that when customers look at their bills, you're going to see that this amount is going to maintain the infrastructure and how my electricity ism provided and then this amount represents how much I'm using which is actually going to go down 33%," said Dunleavy.

Right now the resident rate is 36 cents per kilowatt-hour. Under the current proposal, that rate would go down to 24 cents per kilowatt-hour.

"Under the proposal, SCE’s approximately 1.2 million lower-income customers would receive an average 16%-21% bill reduction, and about half of SCE’s customers would see lower bills, assuming no change in electricity use. Rates for each unit of electricity consumed (kilowatt-hours) would decrease by about 33% for all residential customers," Edison said in a statement.

Here's a breakdown of the proposed rate restructuring for Edison customers based on income:

Above $180,000: $85/month
$69,000 - $180,000: $51/month
$28,000 - $69,000: $20/month
Less than $28,000: $15/month

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The State is still figuring out some of the particulars, including how they'll determine customers' income, but Dunleavy said it will be a state agency or a third party vendor. The California Public Utilities Commission would have to approve the proposal and make a final decision by mid-2024. If approved, the fixed-rate bills could be in effect as soon as 2025.

California Consumer Money Instastories