Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric have asked the California Public Utilities Commission for approval to charge customers a flat rate based on household income. The flat fees would be in addition to charges based on consumption, which, for San Diego Gas & Electric, now amount to 47 cents per kilowatt hour, the highest rate in California. Under the flat-fee plan, those charges would fall to 27 cents per kilowatt hour, in addition to the income-based flat fee. If the change gets approved, California will become the first state to use household income to determine residential utility bills. Evidently, someone in these utility companies has been reading Karl Marx: “From each according to his ability, to each according to his needs.”

According to the Times of San Diego, SDG&E’s flat-fee schedule for households of four would be: $24 per month for households earning less than $28,000 a year; $34 per month for households earning $28,000 to $69,000 annually; $73 per month for households earning $69,000 to $180,000 a year; and $128 per month for households making more than $180,000 a year. The PG&E flat fees are lower. At the same income levels and household size, the fees are $15 a month, $30 a month, $51 a month, and $92 a month.

The utilities’ proposal is a follow-up to last year’s Assembly Bill 205, which, according to the Senate floor analysis, “requires the fixed charge to be established on an income-graduated basis with no fewer than three income thresholds,” but doesn’t give specifics. So maybe the Marx fan was in Sacramento, not in the offices of the state’s power providers?

Click to read the full article in the City Journal.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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