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Last year, California passed Assembly Bill 205.
We supported the legislation due to the critical clean energy reliability and permitting streamlining provisions, as well as the creation of a financial relief program for utility bills incurred throughout the pandemic.
However, tucked into the bill was a provision that required the California Public Utilities Commission (CPUC) to modify a portion of electricity rates to make them dependent on a household’s income.
There are real concerns and real risks to this approach.
Most of the proposals that have been submitted would create additional financial burdens for low- and middle-income customers in the Bay Area, since the income thresholds are tied to federal and statewide income thresholds.
Given the Peninsula’s high cost of living, particularly for housing and child care, these financial thresholds do not accurately represent the financial struggle many of our constituents are facing.
In turn, many low- and middle-income San Mateo and Santa Clara County residents struggling to make ends meet will see increases to their electricity bills.
Not only are the income thresholds geographically inequitable, it’s clear that Pacific Gas & Electric (PG&E) is using this proceeding as a way to raise your rates.
The three monopoly utilities, including PG&E, jointly proposed using this change as an opportunity to raise the overall revenue they collect from customers.
Incomes between $28,000-$69,000 would pay an additional $120-$288 per year; incomes between $69,000-$180,000 would pay an additional $492-$876 per year; and those above $180,000 would pay an additional $1,020-$1,536 per year.
The federal low-income threshold for a family of four living in San Mateo County is $149,100, making this proposal financially burdensome for many of our low- and middle-income constituents.
In addition, this change would disincentivize energy conservation and efficiency, as well as rooftop solar and battery use, as it would increase the fixed costs for many households relative to what they pay per kilowatt of electricity used.
Undermining our energy conservation and efficiency goals, especially in this moment when the Bay Area is looking to electrify buildings and the cost of a kilowatt of electricity can make-or-break the financial decision to switch a home appliance to electric, is a huge problem.
There are meaningful solutions the Legislature can and should use to decrease rates. We have fought — and are fighting — for those solutions.
California should subsidize the clean energy buildout by funding some of it through a proposed climate bond, which we are both strongly advocating for.
California provides our utilities with the highest “return on equity” for shareholder profits, which according to experts overestimates the financial risk return. These profits could be rebalanced.
We have also fought against boondoggle programs and outdated legal obligations that are paid for by taxpayers.
PG&E has been allowed to put extensive costs from the horrific wildfires, some of which were started by their own equipment, as well as the significant costs of prevention of future wildfires, into electricity rates.
Instead, we should follow the Legislature’s proposal to stop ratepayers from footing the cost of these wildfires and pay for them out of a Climate and Equity Trust.
Electricity affordability is a top priority that we both support, but it’s critical that we proceed thoughtfully and don’t undermine our existing climate policies.
This proposed change is at risk of being poorly implemented, with long-lasting affordability and climate impacts for the Peninsula.
The CPUC needs to consider the impacts to all California communities.
Senator Josh Becker was elected in 2020 to represent the 13th Senate District and serves as the Chair of the Senate Budget Subcommittee No. 2 on Resources, Environmental Protection, and Energy.
Assembly member Marc Berman was elected to the Assembly in 2016 to represent the 26th Assembly District.
Respectfully this sounds like a CYA op-ed.
Our representatives supported a bill that contained ” a provision that required the California Public Utilities Commission (CPUC) to modify a portion of electricity rates to make them dependent on a household’s income.” but don’t want to be blamed for the unintended consequences on our consistuancy (hence this op-ed to try to show that they’re trying to fix it…).
Maybe next time, our representatives should take the time to read and analyze the bills….they are approving; in other words do a better job.
Wait, did Josh Becker and Marc Berman vote in favor of Assembly Bill 205? Looks like they did, https://leginfo.legislature.ca.gov/faces/billVotesClient.xhtml?bill_id=202120220AB205
And now they have written this opinion piece, trying to distance themselves from it?
SRB, you nailed it. If they don’t like what’s in the bill, they should not have voted in favor of it.
My income consists solely of Social Security which is is $1164 a month. I would be delighted to have to pay less for my utilities.
So, the legislature required the utilities to collect an additional income tax for them? What a thinly veiled shell game that is! We know CA is a tax-the-rich state, but let’s be honest about it.
But, my bigger gripe is how this dis-incentivizes energy conservation and installation of solar. On top of the NEM3.0 that went into effect this year we are making a full U-turn from trying to curb our electricity usage. NEM3.0 is a mis-nomer – it is no long a net metering rate system – they will charge and credit minute by minute. After analyzing it for installing solar, I’ve found my best choice will be to disconnect from the utility (to avoid the flat monthly charge), add batteries (to cover the night and cloudy days) and add a propane generator (to supplement when my solar isn’t quite enough). So, if I’m rich enough, I can do that and save quite a lot, but I might produce a bit more carbon with the generator. But, that is what the sum of “incentives” are directing me to do.
Like SRB, I am disappointed in these Reps for not doing their jobs. I saw these flaws first time I read about the legislation and I don’t even have staff helping me.
@Sheryl wants to pay less for utilities and presumably less for milk, rent, and gas, but the problem is this proposal is a wolf in sheep’s clothing.
If you missed this point, to implement this PG&E needs to raise the prices on the rest of us by quite a lot, which are already some of the most expensive prices in the whole country. In many cases, your bill will go up by more than $1,000 a year. Yikes.
Ah – I don’t know what compromises our representatives saw – but MORE COMPLEXITY to an already poor idea will not really save it. All the administrative costs (at utilities) will come out of the beneficiaries benefits. AND it does not give incentives for lower edgier energy use.
– Low income family equipment incentive – Window Heat Pump (warm air in Winter, cooler air in Summer, especially on smokey days). Low income family ‘equipment’; low cost synthetic-fill bed quilts (they work!). Low income family ‘equipment’; reflective window shades (like for cars). …
Economies of state-wide SCALE / imagine a 100,000 unit window heat pump purchase!
Sheryl, you won’t pay less. Only the poorest will escape an increase, EVERYONE ELSE will pay more. Did you read these bits?
“The three monopoly utilities, including PG&E, jointly proposed using this change as an opportunity to raise the overall revenue they collect from customers.”
“Incomes between $28,000-$69,000 would pay an additional $120-$288 per year; incomes between $69,000-$180,000 would pay an additional $492-$876 per year; and those above $180,000 would pay an additional $1,020-$1,536 per year.”
And now, after having voted yes for this bill and after it being signed into law, Josh Becker and Marc Berman write this:
“The federal low-income threshold for a family of four living in San Mateo County is $149,100, making this proposal financially burdensome for many of our low- and middle-income constituents.”
Hello Jay,
Since you referred directly to me, I believe it’s fair for me to say that I think you are making some assumptions about me that are unfair I am lucky to be living in Mountain View! I love living here. And if it weren’t for these kinds of resources I would not be able to. I believe that people in the middle class are very fortunate even if they have to pay a little more money. Certainly more than I live on. But I understand the issue. And I understand being upset about the situation.