Sustainability: Soaring Electricity Prices Ahead

Think you are paying a lot for your electricity now?  Just wait, it could get a lot worse!

Last year, a trailer was added to a state bill with no discussion in the legislature, and it was signed by the governor 3 days later.  This sneaky trailer to the bill called for the California Public Utilities Commission (CPUC) to establish an income-graduated fixed charge for electricity by July 2024.  San Diego Gas and Electric (SDG&E) has submitted a proposal to the CPUC in which the fixed charge would be as high as $1536/year: $128/month for households earning >$180,000/year, $73/month for those earning >$69,000/year, $34/month for those earning >$28,000/year, and $24/month for those earning less than $28,000/year. This new charge is intended to cover most fixed cost items (e.g., to provide customer service, wildfire preparedness, operations and maintenance) as well as a portion of the costs billed under the transmission and distribution category. The cost of electricity generation for Del Mar residents will still be set by the Clean Energy Authority and will continue to appear as a separate line item on your monthly SDG&E bill.

Adding insult to injury, customers will still need to pay an additional distribution fee based on their monthly usage of electricity (although the utilities claim that they will lower that distribution rate).  Estimates are that customers of almost all earning brackets will pay far more each month, with the main exception being people with high electricity bills due to having very large houses, heated swimming pools, etc.  Most Californians who live in apartments or small homes use much less electricity, and they would all see their utility bills increase dramatically.

In addition to higher monthly bills for almost everyone, this fixed fee would essentially kill rooftop solar.  Who would pay >$10,000 for solar if you can never get that money back from savings on your electricity bill?  Also, this would discourage all forms of energy conservation.  Why not run the AC all day and night if you have this large fixed charge?  If Californians need to electrify their homes and transportation to avoid the climate impacts of fossil fuels, this high fixed fee will only hinder that effort. This fixed charge will penalize all those who are doing the right thing and conserving energy. The only hope is that the legislature will repeal this trailer bill, or that the CPUC will make the fixed fee much, much lower for everyone.  Unfortunately, both seem unlikely.

Did you know that SDG&E has the highest rates for electricity in the entire United States?  The other California utilities are not far behind. The average electric rate in California increased 75% in the last 7 years. The CPUC annually establishes the rate that the utilities can charge their ratepayers.  Our state Assembly Member, Tasha Boerner, called for the state to do an audit regarding the extremely high price of electricity. The recently completed report from the State Auditor says that for 9 of the past 10 years, SDG&E exceeded the profit that was authorized by the CPUC.  Although this is not illegal in itself, the auditor’s report stated that this “raises questions about whether forecasted costs were consistently overstated.”

It seems clear that the utilities control the CPUC.  Fossil fuel utility companies win, the public loses.