Will future increases in PG&E bills be tied to personal income? Here’s the latest | Opinion

Nearly a year has passed since many Californians went berserk over a proposed income-based fee that would be added to electric bills.

The idea was simple: The more you earned, the more you would pay. PG&E, for example, proposed a $92-per-month charge for customers earning over $180,000 per year.

The income-based fee would pay only for transmission costs and would apply in some amount to all customers, depending on how much they earned. Meanwhile, customers would get a break on the rate they paid for their actual electricity use.

Utilities were not supposed to profit under the new way of billing. Even so, there was almost universal outrage over what some described as a “commie” pricing system.

Not only that, utilities would have to come up with a method to verify customers’ incomes — and many saw that as a clear invasion of privacy.

After many months of uncertainty, it appears we finally have some clarity. And no, there will be no $92-per-month charge for high-earners — cue the sighs of relief.

This column is part of The Tribune’s Reality Check series.

Public Utilities Commission issues proposal

On Wednesday, the California Public Utilities Commission proposed a flat rate of $24.15 per month for the majority of customers, with a couple of exceptions. Low-income customers already receiving some form of subsidy will pay less — either $6 or $12 per month, depending on income qualifications.

As the new flat rate takes effect, the usage rate will decrease by 5 to 7 cents per kilowatt hour. According to the PUC, that will translate into a cost savings for some customers. An average customer in Fresno, for example, would save $33 over the summer, according to a PUC fact sheet.

That’s not a huge amount, but the PUC maintains that by bringing down the cost of electricity, it will be more economical to transition away from fossil fuels.

Not everyone sees it as a fair proposal.

The Sierra Club objected that it “lumps customers making $50,000 a year” into the same tier as multi-millionaires. As a result, lower middle-class families that don’t use much energy would likely pay more, while wealthy customers who suck up lots of juice would get a break.

Another group likely to be unhappy: homeowners who invested in solar panels primarily to save on their energy bills. They will be billed the same flat rate as other customers. Not exactly an incentive to switch to rooftop solar.

It all started with the Legislature

The PUC proposal, which is tentatively scheduled for a vote on May 9, is the culmination of months of negotiations and backtracking involving the commission, the utilities and state lawmakers.

It was, in fact, the state Legislature that started the whole brouhaha. In 2022, it quietly passed Assembly Bill 205, requiring investor-owned utilities like PG&E to adopt the new billing structure.

The goal was two-fold: To provide a stable revenue stream to upgrade the grid and pay for fire prevention and energy efficiency projects, and to protect low-income customers who can ill afford hefty rate increases.

But following a huge public backlash, legislators attempted to soften the blow by proposing legislation that would undo parts of the original law.

Utilities were instructed to come up with just two proposed tiers — one for ratepayers already enrolled in programs for low-income customers and another for everyone else. That way, there would be no need to verify personal incomes.

They responded with proposals ranging up to $73 per month — the amount submitted by San Diego Gas & Electric. PG&E proposed $51 per month.

In that context, the PUC’s proposal of $24.15 seems like a decent compromise, though there will doubtless be efforts to persuade commissioners to revise it. Those may or may not be successful; judging by their past decisions, it’s unlikely the commissioners will deviate much from the proposal.

But at least for now, this much seems certain: Aside from ratepayers who qualify for subsidies, the rest of us will be in the same boat as far as the flat rate goes — whether we make $50,000 per year or $500,000.