(Bloomberg) — California regulators have voted to impose one of the highest monthly fixed utility fees in the country in an effort to change the way customers in the Golden State pay for electricity.
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Utilities owned by PG&E Corp., Edison International and Sempra will be able to charge many customers about $24 a month starting at the end of the year to cover their infrastructure costs, according to a ruling released Thursday by California Public Utilities Commission.
In exchange for higher monthly fees, capped at $10, customers will also pay 5 to 7 cents less for each kilowatt hour used. Fixed monthly fees will be lower for low-income customers.
The change comes as California grapples with what consumer advocates have called an affordability crisis for the state’s utility customers, who now face the second-lowest electricity rates on average. high in the country.
Rates have doubled for many utility-paying customers to spend billions of dollars to update their aging grids and work to reduce the risk of their power lines sparking more catastrophic wildfires.
The new billing structure was authorized by a law signed two years ago by California Gov. Gavin Newsom that required fixed electricity rates to be based on income.
State regulators say the new rates will make it more affordable for customers to electrify their homes and use plug-in cars. Critics of the proposal say it will increase bills for those who live in small apartments and don’t use much electricity, as well as rooftop solar customers who can offset their utility bills by generating their own electricity. , since they will still be obliged to pay the fixed monthly fee even if they receive credits for their excess electricity.
“The CPUC expects cost reallocation to encourage electrification, but we believe it could further harm the state’s rooftop solar,” ClearView Energy Partners wrote in a research note after the decision.
California regulators last year significantly reduced incentives for new rooftop solar customers, saying it would help lower bills for those who can’t or don’t have solar panels and who pay for those who have them. This has led to a sharp decline in residential solar installations in the largest U.S. market.
Utilities have supported the idea of increasing fixed monthly fees to more equitably distribute their infrastructure costs among customers. Fixed fees would be near the top of those charged by investor-owned utilities, according to an analysis by Ahmad Faruqui, an expert on utility rates.
(Updates with analyst comment in eighth paragraph)
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