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Sacramento Does an About Face on Electricity Bills Based on Income – Pacific Research Institute

Sacramento Does an About Face on Electricity Bills Based on Income

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At roughly the same time that steeper energy bills arrived this winter, Gov. Gavin Newsom declined an opportunity to support repeal of a hated law that directs utilities to charge customers based on truly Marxist principle – their income.

At roughly the same time that steeper energy bills arrived this winter, Gov. Gavin Newsom declined an opportunity to support repeal of a hated law that directs utilities to charge customers based on truly Marxist principle – their income. Instead, his office said he’s looking “forward to seeing a” proposal from the California Public Utilities Commission “that is consistent with” Assembly Bill 205.

AB 205, passed and signed in 2022, requires a “fixed charge to be established on an income-graduated basis with no fewer than three income thresholds,” according to the Senate floor analysis, which lacked specifics. But the numbers are coming into a sharper focus. Recent media reports indicate that a joint proposal by the utilities affected – Southern California Edison Company, Pacific Gas and Electric Company and San Diego Gas & Electric Company – breaks down this way:

Households with annual incomes between $28,000 and $69,000 would be charged $20 to $34 per month; those in the next bracket, $69,000 to $180,000, would have to pay from $51 to $73 per month, while those earning more than $180,000 would pay from $85 to $128. When annual household earnings are less than $28,000, the fee would be $15.

These “from each according to his ability, to each according to his needs” payments would be on top of the usual charges based on consumption. The Public Utilities Commission is to decide on the final format by July 1.

It’s no surprise that lawmakers of both parties want to repeal AB 205. Every Democrat in the Assembly voted for AB 205 and all but four in the Senate did, as well. Now some want it to go away. Ten recently sent a letter to the PUC complaining “the fixed charges proposed by the utilities … would be the highest in the nation and would create an unacceptable burden for our constituents.” Four who signed the letter didn’t vote on AB 205. Three of them, however, weren’t yet in office during the 2022 session.

Assemblywoman Jacqui Irwin was not a party to the letter, but she has positioned herself as an AB 205 opponent, claiming as other Democrats have, that she voted for the bill without knowing enough about it – that it was rushed through. Howard Jarvis Taxpayers Association President Jon Coupal believes “the change in tune from this group of mostly coastal Democrats appears attributable to the blowback they are receiving from their affluent constituents in an election year.”

Even with Democrats waking up to their error, the bipartisan effort hasn’t been successful. Maybe it would be a different story if Newsom were to support repeal.

Meanwhile, Californians are being “stunned” by their power bills after new price hikes unrelated to the income-based levies kicked in.

“It’s almost like you’re getting punished,” 90-year-old Dorothy Lovell of Santa Rosa told the San Francisco Chronicle after getting “sticker shock” from the “historically high electricity rates” being charged by Pacific Gas and Electric Co.

We covered the rate-hike spree just after the first of the year, and noted then that, at an average of 22.33 cents per kilowatt hour, California has the most expensive electricity in the continental U.S. And they’re only going to grow higher than the current “stunning” rate hikes that were just slapped onto bills. One wonders when and if this will stop.

Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.

 

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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