California regulators to vote on changing how power bills are calculated

SACRAMENTO, California — California regulators on Thursday are likely to change the way some energy companies calculate their customers’ bills, a decision that would make it cheaper for people to charge electric cars and cool their homes in the summer but would raise prices for those who do not use electric cars. the same amount of energy.

The California Public Utilities Commission will vote on whether to let the state’s major utilities, including Pacific Gas & Electric – add a fixed amount to people’s energy bills every month. For most people, this amount would be $24.15 per month, which would pay for things like installing and maintaining the equipment needed to transmit electricity to homes. Lower-income residents enrolled in one of the two discount programs would pay less, $6 or $12 per month.

In exchange for the new levy, the electricity price would drop by 5 to 7 cents per kilowatt hour. One kilowatt hour is the amount of power required to operate a 1000 watt appliance, such as a coffee maker or vacuum cleaner, for one hour.

For people who use a lot of energy every month, this can reduce their monthly costs. People living in Fresno — where temperatures can often exceed 100 degrees Fahrenheit — would save about $33 on running their air conditioners in the summer, according to the commission. That’s because the savings they would get from the price drop on electricity would be greater than the amount they pay for the new fixed rate.

It would also benefit people who own electric cars and use other electrical appliances such as heat pumps. According to the committee, they would save on average between €28 and €44 per month. In 2022, California accounted for 37% of the nation’s light-duty electric vehicles, or about six times more than second-place Florida, according to the U.S. Energy Information Administration.

“The new billing structure distributes fixed costs more evenly among customers and will encourage customers to adopt electric vehicles and replace gas appliances with electric appliances because it will be cheaper to do so,” administrative law judge Stephanie Wang wrote in a proposed decision explaining the costs.

For people who use less energy, the new fixed rate could increase their bill every month. This also applies to people who live in smaller apartments or live in cooler areas and use air conditioning less often. This is because for them the decrease in the electricity price would not be enough to offset the amount of the new monthly costs.

Opponents argue this would have a disincentive to energy conservation, something California has been urging people to do.

“If you wanted to design a policy instrument that would send the message that conservation doesn’t matter, this would be it,” said Ken Cook, chairman of the Environmental Working Group.

Most states already have fixed monthly charges on utility bills to pay for grid maintenance and infrastructure. But in California — where electricity rates are among the highest in the country — any move that could raise prices for anyone is causing alarm among consumers and elected officials.

A group of 18 California congressmen have called on the commission to keep the rate low, noting that the national average for fixed charges on utility bills is $11. Some Democrats and Republicans in the state Legislature have supported a bill that would cap the levy at $10 a month.

“We must do more to rein in the ever-rising cost of living in our state, not find new ways to raise it even further,” California Senate Republicans wrote in a letter urging the committee urged to reject the proposal.

The proposal is much lower than what the state’s investor-owned utilities had asked for, an amount between $53 and $71 per month. The commission also argues that the levy will not discourage conservation efforts, as utilities are already allowed to increase rates during peak hours.