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The effort to fix California's electricity pricing

Uploaded: Nov 12, 2023

Effective energy pricing is key to transitioning away from fossil fuels. Americans are not always great at following rules but we are excellent at following prices. If we align our pricing with the transition we need to see, then we will see it. If we don’t, we won’t.

Crowds flock to sales at Macy’s on Black Friday. Image source: Department of Energy

California’s electricity rates have a lot of problems right now. First of all, they are too high. Not just as in “they seem too high” or “they are higher than everyone else’s” (both of which are true), but also as in they are too high per economic theory. The actual cost of adding one more kWh of electricity to the grid is much less than the per-kWh rate we are charged. That means we are using too little electricity. I wrote about this in 2021 and our rates have only gone up since.

The power prices charged by California’s three investor-owned utilities, shown in orange for SDG&E, PG&E, and SCE (left to right), are higher than those of any in the western states. Source: California Environmental Justice Alliance (2023)

It’s not just that our prices are too high. The pricing is also unfair, making electricity unaffordable for many low-income households, even with the CARE and FERA discounts. (1) Although these discounts are used by 25% of customers, CARE participants make up 37% of the households that are behind on bills.

Customer arrears data for California’s investor-owned utilities, cumulative through 2023. Source: California Environmental Justice Alliance (2023)

The pricing is also far too inflexible. Electricity costs vary significantly over the day and over the year, yet the rates do little to reflect that. The result of this faulty pricing is that we use too much gas, too little electricity, and too much dirty electricity during times of peak demand.

Economists at the Energy Institute at UC Berkeley’s Haas School of Business have done a lot of work on this (see for example this writeup) and California’s legislators have been listening. California Assembly Bill 205, which was signed into law in June 2022, directs the California Public Utilities Commission (CPUC) to develop an income-graduated fixed charge to improve affordability and speed up electrification, and to look into more flexible rates that will encourage use of cheaper and cleaner energy. That effort is now underway. (2) (Note: These rulings will not directly impact Palo Alto’s pricing, since it operates its own utility.)

The basic idea behind the fixed charge is simple. If a utility collects more revenue in fixed charges, then it can offer lower per-kWh rates. Lower rates encourage electrification. The fixed charge can also make bills more affordable if it is income graduated. That is more or less what AB 205 asks for. Several variations have surfaced during the CPUC proceeding.

The three investor-owned utilities (IOUs) collaborated on a joint proposal. They are eager to make this happen, saying that “This residential rate reform is overdue and is needed now.” They suggest a substantial fixed charge that will lower rates by an average of 37%. To adjust the fixed charge by income, they specify four income levels. These use the federal poverty level as a benchmark to align with the guidelines for CARE and FERA discounts.

Investor-owned utilities suggest four income brackets based on Federal Poverty Level (FPL). The FPL is $30,000 for a family of four. CARE and FERA discounts are available to households earning less than 250% of FPL. Source: Testimony by the IOUs (2023)

The rates go down significantly, as shown in this chart.

Investor-owned utilities propose a substantial decrease in per-kWh rates. Source: Testimony by the IOUs (2023)

The IOUs tout the more affordable bills that come with the income-graduated fixed charge. The highest income bracket will pay more in bills, but still an affordable percentage relative to household income.

The average annual bill drops for the lowest three income brackets and goes up for the fourth, in the proposal offered by the Investor-owned utilities. Source: Testimony by the IOUs (2023)

The IOUs emphasize that all households will save money when they electrify because of the much lower rates. For example, they estimate that a moderate-income PG&E customer would save almost $1800 per year compared with today if they fully electrified.

The Sierra Club believes that the IOUs are charging low-income households too much, and has come up with a different, more progressive proposal, charging $0 for all CARE/FERA customers, regardless of income. Moreover, they understand that “high” incomes are not so high in counties with a high cost of living. “Electric affordability is an issue that affects not only CARE/FERA customers, but a wider segment of the population affected by elevated cost of living in California.” So they base their five income levels on the Area Median Income (AMI) which, unlike the Federal Poverty Level, takes local cost of living into account.

The Sierra Club defines five income tiers based on Area Median Income (AMI) BAI: below 80% AMI. MI: below 125% AMI. HI: below 200% AMI. UI: above 200% AMI. AMI in Santa Clara and San Mateo Counties is around $165,000 for a family of four. Source: Testimony by the Sierra Club (2023)

The Sierra Club boasts that “most California customers would have substantially lower average monthly bills” if their proposal is adopted, and that theirs “is the only proposal to provide a substantial bill reduction (19%) for non-CARE/FERA customers with below-average incomes.”

Sierra Club’s location-sensitive income brackets, based on Area Median Income, are shown in colored bands. They allow for much greater income levels in expensive counties than the IOU’s statewide brackets based on the Federal Poverty Level, shown as horizontal yellow lines. Residents of Santa Clara, Marin, San Francisco, and San Mateo counties need household incomes over $300,000 to qualify for Sierra Club’s top bracket (and highest fixed charge). Source: Testimony by the Sierra Club (2023)

The Sierra Club explains that “The Joint IOUs’ top bracket unreasonably groups some customers making very close to average incomes in their counties with customers making well above average incomes. A (fixed charge proposal) that treats customers identically in a state with as much economic diversity as California runs counter to the intent of AB 205.”

The California Environmental Justice Alliance (CEJA) takes this focus on a progressive rate structure even further. They reason that since the top earners in California have by far the largest income, then they should be paying even more.

Income in California is concentrated among the top earners. 78% of income comes from the 8.3% of households bringing in $200,000 or more. Source: Testimony by the California Environmental Justice Alliance (2023)

They look at income tax liability in nine different tiers of approximately equal size and create brackets accordingly.

The top bracket, consisting of the 0.1% of households with incomes over $5 million, represents 26% of income in the state. Source: Testimony by the California Environmental Justice Alliance (2023)

To keep prices equally affordable at all income levels, CEJA proposes a much higher fixed charge for the top brackets. As a thought experiment, they ask: “If a 5% energy burden is reasonable for low-income customers, should 5% not also be reasonable for high-income customers especially when considering the construction of a legislatively mandated income-graduated fixed charge?” In practice they say charges would not be at that level, but they provide this chart to convey the idea.

In this example, which sets an “energy burden cap” at 5% of income, the top income bracket representing households with more than $5 million in income would pay a fixed charge of $2,083 per month. Source: Testimony by the California Environmental Justice Alliance (2023)

If nine brackets is too many, they suggest what three might look like, again choosing them based on equal tax liability.

In this example, one-third of the revenue would come from each bracket, with the lowest bracket representing incomes up to $300,000 and the middle bracket incomes up to $2 million. Source: Testimony by the California Environmental Justice Alliance (2023)

Unfortunately the analysts at California Environmental Justice Alliance were not able to work out the needed level of fixed charges for each bracket because the modeling tool the CPUC provided did not support brackets beyond $200K. As a result, CEJA was only able to specify the ratios across income levels.

Some of the other parties struggled with this model. Doesn’t it become vulnerable to the incomes of a few households? What if those wealthiest households defect from the grid? The investor-owned utilities say that this model and the Sierra Club’s are too complex and won’t work for high-income households. “These two proposals could be perceived as purely punitive by higher income customers due to the lack of perceivable benefit from reduced volumetric rates, therefore resulting in significant utility administrative and customer burden costs for little policy benefit.”

The solar industry, represented by the Solar Energy Industries Association (SEIA), goes in a completely different direction. Their industry relies on high electricity rates to justify the expense of installing rooftop solar. So they propose a miniscule fixed charge with almost no impact on rates and instead suggest focusing on more time-differentiated rates that encourage flexible demand.

Almost every other party spent considerable space pointing out the ways in which this proposal does not achieve the goals set by AB 205. The Sierra Club says that "SEIA’s proposal does not reflect the statutory intent to revise rates in a manner that more aggressively pursues California’s electrification and equity goals." The investor-owned utilities write that “SEIA’s proposal is not compliant with the letter of AB 205 by any interpretation.” The Natural Resources Defense Council (NRDC) writes that “SEIA’s proposal and recommendations are based on inaccurate rate design theory and should be rejected.” It seems like patience is wearing thin with the solar industry in these proceedings.

The last proposal I will reference is a joint proposal from NRDC and The Utility Reform Network (TURN), an advocate for ratepayers. They split the difference, coming in between most of the other proposals, making some compromises but achieving the essence of what AB 205 calls for.

They advocate for modest fixed charges based on three income levels. Rates go down in their scheme, but not to the degree that they go down for the IOUs. Affordability improves, but not as much as it does with the Sierra Club or CEJA proposals. Bills go up for higher-income customers, but electrification can save them money. “Coastal high tier customers for each IOU generally more than double their savings under our new electrification rate proposal relative to the existing rate.” NRDC and TURN seem to be aiming for something that will make things better, be politically palatable, and not be too hard to implement.

The proposed fixed charges vary as shown below. The investor-owned utilities propose the highest, while the solar industry proposes the lowest. The Sierra Club proposal has the lowest charges for lower-income households.

The fixed charge sizes and ranges, shown here for PG&E, vary across proposals. The CEJA proposal is not shown because the modeling tool was unable to implement their proposal. The Public Advocate Office’s plan shown here (PAO) is not covered in this blog post because unlike the other proposals it is not self-funded, so it is not really comparable. Source: Testimony by NRDC and TURN (2023)

The proposed rate reductions are shown below, with the greatest reductions proposed by the investor-owned utilities and the lowest by the solar industry. (The CEJA proposal shown here is a modification that fits into the $200K limit of the tool, and is not one that CEJA recommends.)

Rate reductions proposed by each party, shown for each of the three IOUs. The IOU proposal suggests the biggest reductions (along with the greatest revenue from the fixed charges), while the solar (SEIA) proposal offers the smallest reductions. Again, the CEJA proposal shown here is not the one that they recommend, it’s only the version that could be modeled by CPUC’s tool. Source: Testimony by NRDC and TURN (2023)

In all cases bills go down for low-income households and up for high-income households, but much more for some plans than others.

Average monthly bill impacts for CARE PG&E customers by income level and party proposal. Source: Testimony by NRDC and TURN (2023)

Average monthly bill impacts for non-CARE coastal SCE customers by income level and party proposal. Source: Testimony by NRDC and TURN (2023)

The lower rates mean that electrification becomes a better deal, for all proposals except that from the solar industry.

Annual savings on electric space and water heating operating costs for coastal customers earning $150,000. Source: Testimony by NRDC and TURN (2023)

Annual savings on EV fueling costs for customers earning $150,000. Source: Testimony by NRDC and TURN (2023)

CEJA sweetens the deal for electrification, adding upside for high-income households, by suggesting that any household that fully electrifies by a certain date could get a $0 fixed charge (or 50% discount if more than $500,000 income).

There is a lot of discussion around implementation and how to assess income with enough accuracy. Some parties suggest letting customers self-report and doing random spot checks. Others prefer integrating with the state’s Franchise Tax Board, though that will take longer. Others suggest working with credit agencies. For the first phase, the CPUC has asked each party to come up with a plan that uses only the existing verification mechanism based on Federal Poverty Level.

There is also a good discussion about whether to account for the large disparities in cost of living across counties. The Sierra Club thinks this is important, as do Senator Josh Becker and Assemblyman Marc Berman. The investor-owned utilities are not so keen. They reason that not only would it be inconsistent with how we determine rates and CARE and other program qualifications today, it is not necessary. “The extent to which there are income differences between baseline territories is likely due to higher demand for housing in cooler coastal regions resulting in lower-income households being forced to live elsewhere. The fact that housing costs are extremely high in San Francisco compared to Stockton is not a reason to provide low-income electric bill discounts to six figure income households in San Francisco.”

But there is also a lot of agreement. Few disagree with the basic ask from the commission. As NRDC/TURN say, “The Commission is justified in setting fixed charges at a level that results in volumetric rates that encourage beneficial electrification, lead to progressive outcomes, do not adversely affect affordability, and maintain a signal for energy efficiency and conservation.”

A fixed charge is just the beginning. There is a parallel effort to develop more flexible pricing. But even more important is finding ways to reduce overall costs. Becker and Berman, as well as most of the parties in this proceeding, say that costs have to come down, for example by decreasing the return on equity that utilities receive and by funding social programs outside of electricity rates. The NRDC/TURN proposal contains a fairly depressing stat in this regard. Their proposal reduces rates by 20-25% from today’s pricing structure. And yet “recent rate increases have been so steep that the TURN/NRDC fixed charge proposal reduces volumetric rates to what they were between 2020 and 2022 in the PG&E and SDG&E service territories. These new reduced volumetric rates would still be among the highest in the nation.” Ugh.

I’d love to hear any questions or comments you have about this effort to overhaul California’s electricity pricing.

Notes and References
1. CARE = California Alternate Rates for Energy. These customers who generally earn less than 200% of the Federal Poverty Level, receive a 30-35% discount on electricity bills. FERA = Family Electric Rate Assistance. These customers, who earn less than 250% of the Federal Poverty Level, receive an 18% discount on electricity bills.

2. The way the process generally works is as follows. The CPUC invites thoughts on a topic (e.g., what does the law mean, what principles should we adopt for rate design, how big should the fixed charge be), and asks interested parties to submit testimony (e.g., proposals) by a certain date. These are published so that others can read them, and a “Reply” date is set for parties to comment on other proposals. You can see some of those submissions and replies here (under “Track A Opening Testimony”) and many others on the docket (see for example documents submitted on October 6.)

It is a productive process with a robust exchange of ideas. A CPUC administrator (an “Administrative Law Judge”) oversees the proceeding, setting guidelines for the proposals, answering questions, and ultimately determining the result. In this case, the judge has asked parties to comment on topics ranging from income thresholds to pricing rationale to implementation cost and complexity, to impact on electrification, and so on. A schedule for this back and forth has been outlined and is set to lead to a proposed decision in March or April of next year.

Current Climate Data
Global impacts (September 2023), US impacts (October 2023), CO2 metric, Climate dashboard

Miscellaneous fact: More than half the CO2 emissions of the industrial age have been dumped into the atmosphere since 1990.

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Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Nov 12, 2023 at 7:58 am

Bystander is a registered user.

Off Peak pricing should have been done a long time ago. It has been done elsewhere and even storage heaters were available but not practical if it wasn't cheaper overnight. In our homes, ovens, washers/dryers etc. should all have delay settings so that cheaper power could do regular chores.

Why has this not been available for decades?

Posted by nancygrove, a resident of another community,
on Nov 12, 2023 at 2:37 pm

nancygrove is a registered user.

Sherry, useful post, as usual! I've got three questions I'm hoping you can address:
1) What is the CPUC timeline on decision-making?
2) Any changes planned for commercial accounts?
3) If CA is promoting electrification, why do we still see the gas & oil industry subsidized? Our gas prices have historically been really low, especially compared to other regions such as the Pacific Northwest and the South. Are there moves to reduce the financial incentives for gas use while we make electrification more affordable?
Nancy Grove

Posted by Ole Agesen, a resident of Menlo Park: Allied Arts/Stanford Park,
on Nov 12, 2023 at 5:49 pm

Ole Agesen is a registered user.

Social fairness is a must-have. but it is a stretch for me to imagine that PG&E, SDG&E and SCE care about fairness. They care about money and ROI. If they push these rate plan changes, our hairs should bristle (I have little hair left, but I'm showing goose bumps).

I care about fairness. I care equally about having us continue to install more solar as fast as possible (with batteries when affordable) on rooftops, parking lots, schools, churches, freeway cloverleaves, farmlands where shade-happy crops can grow under panels, etc. Every panel installed will reduce total grid-related emissions (even in this time of partial curtailment during Spring/Fall).

SB205 shifts bills towards fixed charges. The more we do that, the less we encourage energy conservation (LED vs. incandescent bulbs, for example), and the less solar and batteries we will get from individuals, schools, municipalities, micro-grids, etc. (You'll note that this shift in rates doesn't prevent PG&E, say, to make profits on their own solar farms, but it does reduce ability by all consumers to offset costs by installing solar, including small players who want to reduce their own costs with solar and don't think about profits.)

The good news: I think the circle can be squared. We can find a rate plan that doesn't slow down solar and at the same time is fair.


We could have income-differentiated kWh charges and constant (even zero!) connection charges, with NEM, and cap annual true-up balances at zero dollars to ensure that no billionaire can turn his/hers super-high kWh charge into a giga-profit. This is diametrically opposite of income-differentiated connection charges.

This would encourage more solar (by those who can afford it) and can reduce costs for all who need it. And billionaires won't have any reason to defect from the grid.

What's not to like about it?

We could ask IOUs... Nah. Let's ask ARNOLD!

Posted by SRB, a resident of St. Francis Acres,
on Nov 13, 2023 at 11:32 am

SRB is a registered user.

What does it mean for CCAs? SVCE rates are essentially indexed to PG&E rates, they set them at a few percents below at every PG&E rate change.

Posted by Sherry Listgarten, a Palo Alto Online blogger,
on Nov 13, 2023 at 12:33 pm

Sherry Listgarten is a registered user.

Thanks for the great questions. Here's my 2c fwiw.

@Bystander: I think the need for highly differentiated time-of-use rates is much greater now than it has been, due to increased penetration of renewables. It's also the case that a smart meter is needed to enforce such rates. Most Palo Alto Utilities customers do not have these yet, though the city will be rolling them out in the next few years.

@Nancy: You can find the most recent schedule on page 3 of this document. The proposed decision is set for March or April of 2024, though the judge will sometimes adjust the schedule to provide more time for discussion. Some politicians have recently also asked for more time.

I don't know of any requirement wrt commercial rates.

California eliminated subsidies for extending natural gas pipelines to new buildings last year. (It went into effect a few months ago.) More recently, concerns have been more about too high gas prices, due to volatility over the winter. But I haven't been following that very closely. I should!

@Ole: Remember that one of the reasons why electricity prices are so high is because non-solar homes are paying a subsidy to solar homes. The fixed charge is meant in part to address that. (The previous proceeding punted that gap to this one.) Remember also that rooftop solar is one of the most expensive sources of renewable energy that we have. See page 5 of Lazard.

As to what is behind the investor-owned utilities' embrace of this change, I do think it's partly because they don't like how high their rates are. (Unlike most companies, they have little control over their rates, which are set by the CPUC.) The high rates cause people to hate them, and that's not good for business. They would love if some of these costs were taken up outside of rates, or at least tilted more towards wealthier customers who can better afford it. I believe they really do not like to have to come after the 37% of their most vulnerable customers who are in arrears. Also, I think they know if this issue of high prices isn't addressed soon, their rate of return on equity is a juicy target. And they definitely don't want that cut.

@SRB: I think these new prices would pass through to the CCAs (minus a slight discount). The CCAs are paying attention to this proceeding and have asked to work closely with the big investor-owned utilities on implementation, communication, etc.

Thanks all for the questions and comments.

Posted by Steven Nelson, a resident of Cuesta Park,
on Nov 15, 2023 at 8:29 am

Steven Nelson is a registered user.

Thanks - now that I have quickly read through all this - I think the simpler (utility proposed) base fee changes BASED ON UNIFORM state-wide Federal Poverty levels is simpler and easier and (in reality) fairer.

We chose to live in a high cost area. We may - move to Texas - or move out of the Bay Area. Of course our Local state representatives want to save Us LOCALS money. But I cannot see how this is better for the whole state. While I can surely see how this proposal of Berman and Becker would be better for most Local more-wealthy families.

Turn down your heat. "Turn back" at night. Run HVAC cooling judiciously in the summer - open windows during cool and smoke-free evenings. Bless the sturdy roof over your head and the windows to keep out the heat and cold. Take short showers!

FYI, the local area had many of the top ten most wealthiest ZIP Codes in the US (family income or family residence). Woodside, Saratoga ... all represented by our local state senator!

Posted by Sherry Listgarten, a Palo Alto Online blogger,
on Nov 15, 2023 at 2:59 pm

Sherry Listgarten is a registered user.

@Steven, FWIW, I agree with you. When I first read the Becker/Berman op-ed, I thought it made sense to have a cost-of-living adjustment with the fixed charge. But after thinking about it more while writing this blog post, I changed my mind. If people choose to move to a more expensive area because it has better weather, or better schools, or is closer to work, that shouldn't mean that the CPUC makes their bills lower relative to those of the people who stay behind.

Another way to think about it is that the costs that are represented by these fixed charges really belong in the state budget and state taxes. And taxes would be quite progressive, with no cost-of-living adjustment. (Why aren't they in taxes? The politicians seem to prefer having utility bills go up to raising taxes, so right now the costs are in our utility bills.)

Posted by Leslie Bain, a resident of Cuesta Park,
on Nov 16, 2023 at 1:25 pm

Leslie Bain is a registered user.

Sherry, do you realize that Becker and Berman voted in favor of Assembly Bill 205? Web Link

"We supported the legislation due to the critical clean energy reliability and permitting streamlining provisions, as well as the creation of a financial relief program for utility bills incurred throughout the pandemic."

And now they have written and opinion piece, trying to distance themselves from it because of public reaction? "Opinion: The income-based electricity bill provision is a mistake that will raise your rates. Let's not shy away from real solutions." Web Link

"However, tucked into the bill was a provision that required the California Public Utilities Commission (CPUC) to modify a portion of electricity rates to make them dependent on a household's income.

"There are real concerns and real risks to this approach.

Most of the proposals that have been submitted would create additional financial burdens for low- and middle-income customers in the Bay Area, since the income thresholds are tied to federal and statewide income thresholds."

Becker and Berman both voted "Aye" on AB 205. Do not forget that. The time for them to have raised their concerns was BEFORE they cast those votes, and the bill was signed into law.

"It's not just that our prices are too high. The pricing is also unfair, making electricity unaffordable for many low-income households, even with the CARE and FERA discounts."

Becker and Berman both voted "Aye".

"Not only are the income thresholds geographically inequitable, it's clear that Pacific Gas & Electric (PG&E) is using this proceeding as a way to raise your rates."

Becker and Berman write this NOW, but they both VOTED "Aye". They should be held accountable, not let off the hook because of an essay.

Posted by SRB, a resident of St. Francis Acres,
on Nov 16, 2023 at 3:02 pm

SRB is a registered user.

@Sherry - Was this move to income based pricing part of the increases the CPUC just approved today? avg. $22 a month for electric use?

Posted by Sherry Listgarten, a Palo Alto Online blogger,
on Nov 16, 2023 at 4:59 pm

Sherry Listgarten is a registered user.

@SRB: The income-graduated fixed charge is still under discussion. So, it is separate.

Today the CPUC approved another PG&E rate increase. "For the typical residential customer, their combined monthly electric and natural gas bill will increase by $32.62 or 12.8 percent." It's enough to make your eyes bleed.

The electricity bills in this state are out of control imo. An income-graduated fixed charge will help but it won't be enough. The politicians have to step up and get some of these costs out of utility bills and into taxes where they belong. And take a hard look at the return on equity that we are guaranteeing the investor owned utilities.

BTW, if you are wondering where the cost increase comes from, it's things like undergrounding, conductor hardening, vegetation management, and capacity increases. Climate change is making electricity more expensive, a tough irony since we have to use electricity to combat climate change. Even more reason these costs should not be in our rates, and preferably even our bills.

@Leslie: FWIW, I agree that Becker and Berman should own their vote. But I'd rather they double-down on it by reiterating that lower and more affordable rates are important, identifying which fixed charge proposal they prefer and why, and then saying how they will do even more.

Posted by sjd, a resident of Livermore,
on Nov 17, 2023 at 3:45 am

sjd is a registered user.

Sherry, thank you for this very detailed look about the tradeoffs between the different rates. I already knew some of this and why certain proposals were "bad" but this clarified the differences and I learned a lot. Unfortunately, the (frequently correct) anger at PG&E seems to bleed over into any discussion about rate structures.

I tend to think that the income-basing of electricity should be solved by other methods - which is apparently what you just added in the comments with Steven. This frankly gets directly at the whole wealth-vs-income inequality question, plus so many other systems are not income-graduated that it contains a massive marginal tax rate problem. Then there's so many other systems in CA that are not income-graduated like water and the criminal system...

I tend to live a pretty modest life because I believe in conservation. It's remarkable that we're at a place where getting off of point-source natural gas basically requires less conservation of electricity. Much appreciated, again.

Posted by pl, a resident of Addison School,
on Nov 17, 2023 at 7:27 am

pl is a registered user.

So, I invested in solar with a specific payback last year.

Now, I might get stuck with a 100+ minimum bill, and the "savings" for the solar investment are less since the electrical rate is less. Thus, my payback on my system could go from 5 years to 8+ years.

How is this fair, @Sherry?

It's interesting how quickly California switched from energy conservation to "let's get rid of natural gas", which is really what this is all about.

Posted by Leslie Bain, a resident of Cuesta Park,
on Nov 18, 2023 at 7:18 pm

Leslie Bain is a registered user.

"@Leslie: FWIW, I agree that Becker and Berman should own their vote. But I'd rather they double-down on it by reiterating that lower and more affordable rates are important, identifying which fixed charge proposal they prefer and why, and then saying how they will do even more."

I always thought that when one "double-downed" on a position, it meant that one embraced it even more strongly than they did before. That is not what Becker and Berman have done. They completely reversed their positions. They voted AYE for a bill, and now they are writing opinion pieces to indicate that the bill is flawed. That sends mixed messages to voters. It appears that Becker and Berman are attempting to distance themselves from their vote now that there is a certain degree of backlash to the bill. I don't find that admirable at all. Their vote affects people's lives.

The fact of the matter is that Becker and Berman used their power in order to get a bill passed that they freely admit "create[s] additional financial burdens for low- and middle-income customers in the Bay Area." The fact of the matter is that this bill will remain the law of the land until a new bill is passed to strike it down, and that bill gets signed into law. Until that happens, I will keep Becker and Berman's ACTIONS in mind, not their op-ed. If we don't hold politicians accountable for their VOTES, then we deserve to be ruled over by leaders who say one thing but use their powers to do something else entirely.

Posted by Sherry Listgarten, a Palo Alto Online blogger,
on Nov 19, 2023 at 12:59 pm

Sherry Listgarten is a registered user.

Thanks for the really thoughtful comments.

@sjd: Keep in mind that these electric appliances are very efficient. A move from a gas furnace to an efficient heat pump is a strict conservation of energy, by about 3x. In addition, people will care to choose more efficient electric appliances, because electricity will still cost money and heating uses a lot of energy. So I have no doubt that people will continue to conserve energy.

@pl: "Fair" has so much to it. One thing that I think is going on is that when you remedy a system that is unfair, that remedy can seem unfair. The low-income non-solar customers are paying the wealthier solar customers through regressive subsidies built into bills, and there is no "payback period" for them, only increasingly higher bills. Is that fair? It's also the case that the solar industry has known for years that this fixed charge proceeding was coming and perhaps they didn't tell you. Was that fair? Finally, this doesn't apply in Palo Alto, which seems to be where you live. That is because Palo Alto adopted fairer solar rates a while ago. So, lots to consider. The goal is for everyone to be able to afford their utility bills. We'll see how it shakes out. BTW, you can read a local economist's thoughts on "fair" here.

@Leslie, yes, I agree that B&B should be owning and not shirking their votes, saying that the fixed charge legislation was "buried". I don't buy that.

Anyway, thanks for sharing your thoughts on this difficult topic. California for sure has a lot of work to do to get to more affordable electric bills that will encourage electrification.

Posted by Leslie Bain, a resident of Cuesta Park,
on Nov 19, 2023 at 2:00 pm

Leslie Bain is a registered user.

Thanks Sherry. FYI, Mercury New recently ran a piece, "Skyrocketing PG&E bills will soar higher after state ruling -- PG&E's sky-high bills are already rising far faster than inflation", Web Link .

"The agency's five governor-appointed commissioners approved on a unanimous vote a revenue plan for PG&E that is poised to dramatically ratchet up the financial burden for customers in the Bay Area and other parts of California."

"The Oakland-based company has been linked to a string of disasters, including a lethal gas explosion that destroyed a San Bruno neighborhood and a string of destructive -- and in some cases deadly -- wildfires across Northern California. In 2020, the utility pleaded guilty to 84 separate counts of involuntary manslaughter and admitted that the company's equipment started the 2018 Camp Fire that torched the town of Paradise."

"PUC commissioners acknowledged the brutal reality of the higher monthly bills -- before voting to impose the increased costs anyway."

"“Small businesses, workers, renters and many other Californians are struggling under the weight of PG&E bills that have skyrocketed at three times the rate of inflation since 2020," Sam Liccardo, San Jose's former mayor and one of the principal leaders of advocacy group FAIR California, said in an interview with this news organization last month. FAIR California is a coalition of groups that have banded together to oppose the continued increases in PG&E bills."

"By comparison, the Bay Area inflation rate rose 2.8% over the one-year period that ended in October -- which means that as of early 2024, PG&E bills will be rising more than four times faster than the current pace of increases in consumer prices."

Posted by Eduardo, a resident of Menlo Park,
14 hours ago

Eduardo is a registered user.

re: votes by B&B

I've tracked several bills this last year. It is ridiculous the amount of change that can happen at the very last moment in the process. Changes during the appropriation committee, or even during the hold suspense file process. It is extremely opaque, and very compressed. In this case I do not know if B&B knew what was in the last change - BTW, I have yet to hear *who* added the changes - and even if they did I doubt they could have made any changes and got the bill passed.

So, the process is broken, but we are where we are. I applaud B&B for trying to fix some of the problems created by that bill.

BTW - I am not convinced the bill requires the CPUC to add the IBFC; I've re-read it a couple of times and it seems to me that it allows CPUC to do it, but, whatever...

Posted by Sherry Listgarten, a Palo Alto Online blogger,
11 hours ago

Sherry Listgarten is a registered user.

It's not that the bill was changed. It's that it didn't exist until a few days before it was voted on. (And actually the Assembly approved it when blank, then approved the "amendment" later.) The short analysis that was published when the bill was ready was pretty clear about this fixed charge, but people may not have read it.

Here is a description of the pretty whacked process from the Los Angeles Daily News:

It was first introduced on Jan. 8, 2021, completely blank except for one 18-word sentence that read, “It is the intent of the Legislature to enact statutory changes related to the Budget Act of 2021.” About seven weeks later, the Assembly passed the blank bill by a vote of 56 to 18 and sent it to the Senate, where it sat quietly for more than a year.

On June 26, 2022, AB 205 was amended in the Senate. The “amendment” to the 18-word bill was 21,627 words long. It added new sections to the Government Code, the Public Resources Code, the Public Utilities Code, the Revenue and Taxation Code and the Water Code.

On June 27, AB 205 passed the Senate Budget and Fiscal Review Committee. On June 29 it was approved by the full Senate, 27 to 8. It was sent over to the Assembly the same day for “concurrence in Senate Amendments,” which it received by a vote of 64 to 13. The governor signed AB 205, now known as “the energy trailer bill,” on June 30. It took effect immediately.

Posted by Eduardo, a resident of Menlo Park,
9 hours ago

Eduardo is a registered user.

Thanks for the clarification. I tried to chase down the history of the bill via LegInfo and I could not make sense of what I was seeing. My comments on "last minute changes" were based on several bills in this season - including that on bidirectional charging, which I was tracking closely.

So, the bill appeared at the last minute and it was approved. Bad process indeed.


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