Sacramento, California- The California Public Utilities Commission made a significant decision on Thursday to change the way electricity is billed, despite facing opposition from numerous electricity customers across the state. The commission voted unanimously in favor of adding a new fixed monthly fee for consumers, which would be compulsory at $24.15 per month.
This new billing structure aims to lower the rate per kilowatt hour, incentivizing individuals to transition to electric cars and replace gas appliances in their homes. The proposal was supported by the state’s three largest utilities, including Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric, which are investor-owned power companies.
However, this decision has sparked criticism from lawmakers from various political backgrounds and a coalition of over 250 consumer and advocacy groups. They argue that the new fixed fee would disproportionately impact low-electricity users, subsidizing households with high energy consumption.
Despite the concerns raised, Commissioner John Reynolds defended the decision, emphasizing the importance of reducing greenhouse gas emissions by transitioning more people to electricity from fossil fuels. Under Assembly Bill 205, which was signed into law by Governor Gavin Newsom, the commission was required to approve the details and amount of the new fixed fee.
The new fixed charges will be implemented in late 2025 for customers of Southern California Edison and San Diego Gas & Electric, with PG&E customers seeing the changes in 2026. The commission estimates that households utilizing electricity for all appliances and a vehicle could save an average of $28 to $44 per month compared to the current billing structure.
Critics of the new billing system argue that approximately 4 million households, particularly low-electricity users such as apartment renters, could see an increase of $65 to $225 in their annual electric bills. Meanwhile, larger households with higher energy consumption could save hundreds of dollars annually under the new rate structure.
In response to the backlash, some state legislators, including Assemblymember Jacqui Irwin, have proposed amendments to reverse parts of the 2022 law that imposed the fixed charges. Irwin’s amended bill aims to keep the fixed rate from increasing faster than inflation and ultimately repeal it at the end of 2028.
Overall, the decision by the California Public Utilities Commission to implement a new fixed fee for electricity billing has stirred debate and sparked concerns over its potential impact on electricity consumers across the state.