CA electricity bills will have new fixed fees based on income

[KHYE]

Another sad day for solar owners in CA. Now it will take me longer to recoup the cost of my solar system I'm assuming the PW's time shifting benefits/payback will be reduced since they will lower the rates.

Californians will see lower electricity rates and a new fee that won’t vary with power use

California electricity rates will shift to a fixed fee starting in 2025. Most Californians won’t see much change, or will have a lower bill.

calmatters.org

"Wind turbines on a hilltop generate electricity for California" by Homeandgardners is licensed under CC BY-SA 2.0.
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[Tam]

Another sad day for solar owners in CA. Now it will take me longer to recoup the cost of my solar system I'm assuming the PW's time shifting benefits/payback will be reduced since they will lower the rates.

Californians will see lower electricity rates and a new fee that won’t vary with power use

California electricity rates will shift to a fixed fee starting in 2025. Most Californians won’t see much change, or will have a lower bill.

calmatters.org

It's sad because it encourages consumption rather than conservation and residential electric production.

It used to be the more a consumer used, the higher the rate they paid.

Now, the rate is lower to encourage consumption.

The fixed fee is added to ensure residential solar production still has to pay it even though they may produce more than they consume.

"For households that do not benefit from discounts, lower energy users will pay more every month."

The graph shows that families making less than $49,700, pay more, and those who make more pay less (negative sign):

 

[wwu123]

It's sad because it encourages consumption rather than conservation and residential electric production.

It used to be the more a consumer used, the higher the rate they paid.

Now, the rate is lower to encourage consumption.

The fixed fee is added to ensure residential solar production still has to pay it even though they may produce more than they consume.

"For households that do not benefit from discounts, lower energy users will pay more every month."

The graph shows that families making less than $49,700, pay more, and those who make more pay less (negative sign):

View attachment 1045731

Not only is it regressive (lower incomes pay more), but this data painted by CPUC does not even make sense, as it somehow suggests that the vast majority of groups will benefit, i.e. pay less than they do now. But this is supposed to be revenue-neutral zero-sum game, the $24 fixed fee will be offset by lower rates, so that the amount of revenue from the IOU's comes out to the same. So these bar charts don't really add up (to zero).

For example, for PG&E, if you look across how they divided everyone into the nine buckets (3 income brackets x 3 quartile buckets), only one bucket supposedly pays more, the low-usage, higher-income one pays $10 more. Now the buckets are not the same populations. But we know the six lower income buckets, regardless of usage, all pay from $0 to $15 less, and those six buckets are 30% of the households (CARE and FERA, as stated in other articles). So the remaining three buckets are 70% of households, as a whole must pay more. But two of the buckets pay less, and are supposed to be 3 of 4 quartiles, so another 52.5% (75% of 70%) also pay $0 to $5 less.

That means the last 17.5% (25% of 70%) of the population, paying only an average of $10 more, will somehow offset the other 82.5% paying $0 to $15 less. Even with the limited info they provide, it is just demographically and statistically impossible for all that to balance out to zero-sum.

 

[wwu123]

Let's look at their math another way, let's look just at the above $62K buckets (thus higher-income includes most of the working poor and middle-class as well)

The low usage bucket averages $10 more using 313kwh monthly average. Since the fixed monthly fee is $24, then the rate on the first 313kwh must be $14 less, to net out to $10 increase in monthly bill. That means the rate reduction must average 4.5c/kwh, or $0.045/kwh.

The two middle quartiles pay the same as now, using 515kwh. But they still pay the same $14 less on the first 313kwh. therefore the next 212 kwh must be $10 less than now, to zero things out. That's about 4.7c/kwh, or $0.047/kwh. So abut the same up to 515 kwh.

Finally the last quartile uses 647 kwh, and pays $5 less - so that additional (647-515= ) 132 kwh must be another $5 less. That's 3.7c/kwh, or $0.037/kwh.

So according to this data, maybe about 4.5c reduction in Tier 1 rates (for those schedules with tiers), and around 3.5-4.5c reduction in Tier 2+ rates? (Which of course these rate reductions will be wiped out by the usual 4x/year rate increases, before the reductions even take effect).

 

[Tam]

Not only is it regressive (lower incomes pay more), but this data painted by CPUC does not even make sense, as it somehow suggests that the vast majority of groups will benefit, i.e. pay less than they do now. But this is supposed to be revenue-neutral zero-sum game, the $24 fixed fee will be offset by lower rates, so that the amount of revenue from the IOU's comes out to the same. So these bar charts don't really add up (to zero).

For example, for PG&E, if you look across how they divided everyone into the nine buckets (3 income brackets x 3 quartile buckets), only one bucket supposedly pays more, the low-usage, higher-income one pays $10 more. Now the buckets are not the same populations. But we know the six lower income buckets, regardless of usage, all pay from $0 to $15 less, and those six buckets are 30% of the households (CARE and FERA, as stated in other articles). So the remaining three buckets are 70% of households, as a whole must pay more. But two of the buckets pay less, and are supposed to be 3 of 4 quartiles, so another 52.5% (75% of 70%) also pay $0 to $5 less.

That means the last 17.5% (25% of 70%) of the population, paying only an average of $10 more, will somehow offset the other 82.5% paying $0 to $15 less. Even with the limited info they provide, it is just demographically and statistically impossible for all that to balance out to zero-sum.

I think their goal is to penalize its competitors: residential electric producers at all costs including collateral casualties.

 

[getakey]

So this does not take affect until 2026. How many rate increases until then?

 

[wwu123]

So this does not take affect until 2026. How many rate increases until then?

It's typically about four increases per year, for the past 10-15 years, last time I checked....

 

[tivoboy]

CPUC is just a scam.

But, I have read/heard that the rate reduction overall is closer to 5-7 c/kw. Would that make it seem more equitable or economical for low income+low to medium use?

And I’m not sure who/what produced that article, but it doesn’t seem to show what the rate expectation is going to be AND it purports that CA wants “all vehicles sold to be electric by 2035” which is as well not accurate.

 

[tivoboy]

So this does not take affect until 2026. How many rate increases until then?

Proabably another 20%, THEN in 2025 a 20% reduction. But, by then we’ll be at ~ 120% of 2018 levels, so we’ll be back to just maybe Mid 2023 by EOY 2025

 

[mort neff]

In my area I get power from a Co-op. They have charged me a set "pole fee" for decades. So in effect my price per kWh is more if I conserve. The bill starts at $30 basically.
I really don't get the whole price that by income deal. Shouldn't being poor be painful and make it a reason to not be poor? Is it even legal?

 

[miimura]

In my area I get power from a Co-op. They have charged me a set "pole fee" for decades. So in effect my price per kWh is more if I conserve. The bill starts at $30 basically.
I really don't get the whole price that by income deal. Shouldn't being poor be painful and make it a reason to not be poor? Is it even legal?

Your location says "Texas". Your logic doesn't compute in Sacramento.

 

[ItsNotAboutTheMoney]

In my area I get power from a Co-op. They have charged me a set "pole fee" for decades. So in effect my price per kWh is more if I conserve. The bill starts at $30 basically.

Your price per kWh isn't necessarily really more. Paying for service, demand and energy separately is how it should be. But policy often favors loading more of the service into the per kWh price in order to encourage efficiency, and the utilities love that because they can earn more by selling more electricity.

I really don't get the whole price that by income deal. Shouldn't being poor be painful and make it a reason to not be poor? Is it even legal?

It's treating electricity as an essential service, but instead of paying for the basic service via general taxation (as is the usual way for public good) it's using cross subsidy. The big problem to me there is use of cross-subsidy. Public good should be paid by general taxation.

Income-based demand and energy pricing would be terrible.

 

[pinolero]

Have to pay the lawsuits, seems just right. Capitalism is a hellauva drug. I have no clue how "middle class" Americans can afford CA every single year.

 

[CrazyRabbit]

Click the income range bar at the top….