CPUC Proposal Decision Released
The California Public Utilities Commission (CPUC) has recently announced its decision regarding income-based utility fees, setting the stage for a significant vote scheduled for May 9th.
Recently, the CPUC released its proposed decision regarding the high residential fixed charges issue that has sparked controversy in the state legislature. According to the proposal, a fixed charge of $24 per month would be established for customers who do not qualify for subsidized rates. This charge would be mandatory for all residential ratepayers, regardless of whether they are solar customers or not. It’s worth noting that $24 is more than twice the national average, and the Commission has stated that this would only be the starting point, hinting at the possibility of further increases. View more information about the proposed decision on the California Solar & Storage Association’s (CALSSA) PDF.
The proposed charge would be applicable to all residential rates for each of the three investor-owned utilities (IOUs). It would not be an additional charge on top of the mandatory monthly charges for NEM-3 customers. The fixed charges for those rates would increase from $14-$16 to $24, and the same $24 charge would also apply to other residential rates. It is unclear how this fee will be incorporated with those on NEM 1 or NEM 2 and whether or not it will take the place or be additional to fees already implemented.
The California Public Utilities Commission (CPUC) did not approve the addition of components that would increase the charge, but it has shown willingness to consider them later. The utilities can propose rate increases every four years during general rate cases.
No new income categories will be established. Customers who are enrolled in CARE would pay $6 per month, FERA customers would pay $12 per month, and all other customers would pay $24 per month. These three categories would fulfill the income-based component of AB 205, which is a budget trailer bill passed in 2022 that initiated the investor-owned utilities’ unpopular effort to introduce high fixed charges. PG&E would decrease kWh rates by 4.7 c/kWh, SCE by 4.6 c/kWh, and SDG&E by 6.8 c/kWh, which would be offset by the increase in fixed charge revenue. However, these rates are historically constantly subject to change and there is speculation that the utilities will pad the rates before or after implementation.
Upon an initial analysis of this structure, it has been observed that customers who are not enrolled in the CARE program and do not consume much electricity, such as apartment tenants and those living in small or energy-efficient homes, would experience an increase of $180-$220 per year in their bills. On the other hand, customers with high energy consumption would observe a reduction of $330-$470 in their annual bills.The fixed charge will take effect in Q4 2025 for SCE and SDG&E, and in Q1 2026 for PG&E.
The California Public Utilities Commission (CPUC) is set to vote on the proposed decision on May 9th. However, the details of the proposal may change significantly before the vote takes place.
Currently, there are multiple bills being considered by the Legislature that would limit the residential fixed charge. The primary bill, AB 1999 (Irwin), proposes setting the limit at $14 (adjusted to $10 in 2013 dollars). This bill is anticipated to be scheduled for a hearing within this month.
The decision is not yet final and the discussion will continue for the next month. Further action in the legislature and future rate cases are also possible.
Before the May 9th vote, staying informed and voicing your concerns is crucial. Let’s work together to shape a brighter solar future for California. Make your voice count!
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