California Electric Bills Set to Increase If Income Higher
A California law would set a sliding scale for electricity bills based on a household's income.
The fixed monthly fees would range from $15 to $128 and would be separate from use charges.
One retiree who lives without air conditioning is braced for a big bill — and says that's not fair.
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Californians might soon get electric bills based on how much they make: The higher their income, the more they'll owe each month.
It's part of a plan to pay for modernizing California's creaky electricity system, whose downed power lines have been blamed for starting massive forest fires — and where an increasingly hotter and drier climate is pushing demand for energy ever higher.
The new state law aims to make higher-income people shoulder a greater burden when it comes to paying for the power system's modernization, The Washington Post reports.
It doesn't totally take out of the equation how much power each household uses: Part of each bill will still be based on that. But each bill also will have "fixed charges" that will be set based on income.
Households with incomes under $28,000 would pay $15 a month in the Los Angeles area, for instance, according to the California Public Utilities Commission, which the Post cited. But households with incomes over $180,000 would pay $92 a month — a 144% difference. In San Diego, they'd pay $128 a month.
Income Bracket Pacific Gas & Electric San Diego Gas & Electric Southern Cal. Edison Less than $28,000 $15 $24 $15 $28,000-$69,000 $30 $34 $20 $69,000-$180,000 $51 $73 $51 More than $180,000 $92 $128 $85
Source: California Public Utilities Commission, The Washington Post
Some homeowners aren't happy with the changes, which have yet to be implemented. They told the Post that after years of messaging from state officials encouraging people to conserve energy, the new plan says just the opposite: Even if you've been watching your electricity use, you'll still be charged more if you make more.
One retiree in Eureka, in the northern part of the state, told the Post that he and his wife have tried hard to limit their electricity use — using their washing machine only during off-peak hours and even going without air conditioning.
But the new fixed fees — even just by themselves, without adding on usage charges — would be more than his total bill under the current system, he said.
Still, some researchers say the fixed-price charges — especially when set on a sliding scale, based on household income — are a fairer way to finance the electrical system's expansion.
Cities like Los Angeles need to build out their electric system to deal with increased demand. The state's drier and hotter weather — along with the continued rush of electric vehicle purchases — are also factors. Erik Von Weber/Getty Images/The Image Bank
If everyone paid the same fixed charge, then poorer households would be paying a greater share of their income to finance the expansion, and that's not how we pay for a lot of other things, like roads, schools and police forces, advocates of the change say. Those community needs are often paid for with a mix of property taxes and income taxes — which go up and down, depending on what you make or how much the property is worth.
And the Natural Resources Defense Council argues that if people pay for the fixed costs of building and maintaining an electric system with a fixed fee, then that would allow power companies to charge less to actually use the electricity. That's because they'll have a steady income stream regardless of use.
"This makes it cheaper to use electricity to operate electric cars or appliances," the NRDC argues — something that could become key in stoking demand for EVs.
That's not likely to satisfy ratepayers who say they've been offered a "bait-and-switch," according to the Post: being encouraged to conserve only to be told their electric bills could now go up, regardless of how much they use.
The California Public Utilities Commission is in charge of implementing the fixed-use charge, and it's still figuring out how to do that, the Post reports. It has until next July.
Source: Business Insider
