The California Public Utility Commission approved a proposal on May 9 to raise fixed charges for most electricity customers to $24.15 per month, with lower charges for those enrolled in programs for low-income residents.
Customers of the state’s largest investor-owned utilities—including Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric—will be affected by the change starting in 2025 and 2026, depending on the utility provider.
In addition to the amount of electricity used, families of four earning up to $60,000 annually and enrolled in the California Alternate Rates for Energy Program, which offers 30 percent to 35 percent discounts on usage rates—known as CARE—will pay monthly fixed charges of $6. The same size household earning $60,001 to $75,000 per year and enrolled in the Family Electric Rate Assistance Program—known as FERA—which offers 18 percent rate discounts will pay about $12.
“This billing plan that’s required by the Legislature is really, at its foundation, a key lever to help propel us toward our decarbonization goals,” Alice Busching Reynolds, president of the utility commission, said during the hearing. “Our electricity rate design needs to evolve to meet this moment in time.”
Fixed charges are currently $10.12 for most accounts and $5.06 for the lowest-income households.
Commissioners believe that the change will help reduce ratepayers’ bills going forward when electricity use is expected to skyrocket as the state intends to mandate households and businesses to switch to electric appliances.
While monthly fixed rates are increasing, Ms. Reynolds suggested that customers could benefit from the change because electricity charged per kilowatt hour will be reduced by between 5 cents and 7 cents.
Mathematically, ratepayers who use less energy will see bills increase because the savings from the reduced cost per hour will not equate to the higher fixed rate charge, while those using more energy could see slight decreases on their bills.
Ms. Reynolds said the change is needed because energy use is expected to double in the coming years as the state looks to electrify the economy by mandating the electrification of vehicles, homes, and businesses as part of its “key climate change fighting strategy.”
“We’re marching toward the future we want to see ... where we can replace gas-guzzling cars on our roads with EVs that run on clean electricity and emit less pollutants, a future where we replace gas-fired appliances in our homes with all-electric ones,” she said.
Ms. Reynolds was appointed to head the utility commission by California Gov. Gavin Newsom in 2021 after previously serving as senior adviser for energy to Mr. Newsom from 2019–21. She also served in former Gov. Jerry Brown’s administration from 2011–19 as a senior adviser for climate and energy and chief counsel and deputy secretary for law enforcement for the California Environmental Protection Agency.
Critics say the decision will prove detrimental to ratepayers.
“From the start, this proposal was poorly constructed and flawed—this fixed rate is uncapped and discourages energy conservation because even if you are energy conscious, you’re still hit with a $24 charge,” state Sen. Kelly Seyarto, Republican Caucus chair, said in a May 9 statement. “All this does is put a bigger burden on working families that are already dealing with the repercussions of unrealistic energy policies that make California unaffordable.”
A fellow lawmaker agreed and said residents are already paying the price for high utility costs and will be further affected by the commission’s ruling.
“Families in my district and around the state are struggling to buy food, pay their bills, and fill up their gas tank to get to work,” state Sen. Brian Dahle—vice chair of the Senate’s Energy, Utilities, and Communications Committee—said in the statement. “Now, Newsom’s appointees are adding another $300 to families’ already stretched budgets. Unbelievable!”
Another senator expressed concern that because the plan does not include a cap on the fixed charge, the utility commission could increase the price significantly in the future.
“Their rubber-stamp approval to add a new $24.15 per month electricity charge is unfair and unjust,” California Senate Minority Leader Brian W. Jones said in a May 9 statement. “Even worse, thanks to Democrat lawmakers, the Commission now has the power to jack up this fee whenever they please—$24 today could easily be $100 next year. Now is not the time for more government-mandated fees!”
One commissioner acknowledged that Californians are concerned about high-priced electric bills and noted that any adjustments to the fixed rate charge would have to be approved by the commission. But she stopped short of assuring the public that there would be no increase.
“It’s critical that we do not allow the fixed portion of these bills to increase quickly or unreasonably,” Darcie Houck said during the hearing. “There needs to be careful scrutiny and guardrails placed on any proposed adjustments to a fixed charge.”
During the public comment portion of the hearing, opponents outnumbered supporters by a wide margin.
Multiple individuals said the plan merely shifts energy costs around and suggested that the change will negatively affect many ratepayers.
“This will increase utility bills on households while doing nothing to encourage electrification or getting to the root problem of rising energy costs,” Yvette DeCarlo, representing 260 nonprofit organizations, told commissioners before they voted. “This policy is regressive, backwards, and ... for millions living paycheck to paycheck, raising energy bills could be devastating.”
A representative for the nonprofit Public Watchdog said the process was unconstitutional due to a lack of public hearings on the issue. During the meeting, he recommended an independent investigation and suggested postponing the decision.
In the days and weeks before the hearing, lawmakers from both sides of the aisle urged caution and attempted to derail the proceeding.
After passing the five-member utility commission—although commissioner Matthew Baker recused himself because of his former role as director of the Public Advocates Office, a state agency that advocates for lower utility bills—on a unanimous vote of 4–0, the new charges will start affecting bills in late 2025.
