Electric rate revisions: Lawmakers urge Newsom to get involved

Inequality Insights

A weekly dose of informed analysis, commentary and news items on the persistent issues of poverty and inequality in California

By Justo Robles

November 30, 2023

California is considering setting fixed charges for part of residents' electric bills. Photo by Larry Valenzuela, CalMatters/CatchLight Local

Dear California Reader,

I'm Justo Robles, reporting for the California Divide team.

On Monday eight members of the Senate Republican Caucus sent a letter to Gov. Gavin Newsom raising concerns about a proposed fixed-rate system for residential electric bills, which would charge customers not just for how much energy they use but also a fixed amount based on their household income.

The state’s three largest electric utilities — Pacific Gas & Electric Company, San Diego Gas & Electric Company and Southern California Edison Company — proposed the plan, saying it would reduce electric bills for the lowest income ratepayers.

But Republican lawmakers said there hasn't been enough public discussion about the plan, which could be approved next year.

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“It was time to bring it again to the governor’s attention, and politely invite him to engage before it gets approved and goes into effect,” Senate Minority Leader Brian Jones, a Republican from El Cajon, told CalMatters.

A monthly fixed charge for PG&E’s low-income customers would be as low as $15, and no greater than $30, while moderate-income customers would pay about $51. The highest fixed charge, for customers in the top 25% of earners, would be about $92.

San Diego Gas & Electric Company said income limits would vary depending on the number of people in each household. But those making less than $28,000 a year would pay a $24 monthly fixed charge.

As for Southern California Edison Company, the monthly fixed charge for 1.2 million lower-income customers would be as low as $15 but no greater than $20, while the highest fixed charge, for customers who are among the top 19% of earners, would be $85.

The letter asks the governor for time to amend or repeal the state law that authorized the Public Utilities Commission to make a decision about fixed charges by July 2024.

Lawmakers passed AB 205 in June 2022, in a “budget trailer bill” process after minimal debate. Newsom signed it as part of a comprehensive energy bill.

Republicans aren’t the only lawmakers sounding alarms. In October, 22 Democratic lawmakers wrote a letter to Alice Busching Reynolds, president of the commission, raising concerns about “the direction of the implementation of AB 205 and its potential negative impacts.” Newsom appointed Reynolds in 2021.

“There’s concern about the proposal from constituents in my district, but also statewide, particularly from folks who are trying to move the needle toward incentivizing a clean energy future for California,” said Assemblymember Damon Connolly, a Democrat from San Rafael, who signed the October letter.

One of the criticisms of the proposal is that it might weaken financial incentives to conserve energy and raise costs for customers using solar energy.

When asked about those concerns Justin Ong, a policy adviser at the commission’s Public Advocates Office, said: “Solar customers will do relatively worse off if there was no fixed charge to begin with, but we feel this is a good middle-of-the-road approach because if someone had installed a (solar energy) system in 2022, they’re still getting a better deal relative to when they had installed the system.”

The fixed electricity charge could go into effect, at the earliest, in 2025 for SCE and SDG&E customers and 2026 for PG&E customers.

More recently state regulators decided to reduce payments for the second time in a year to customers who use rooftop solar power and they approved a rate hike for PG&E's residential customers next year.

“People paying their electric bill each month are not paying a Republican electric bill or a Democratic electric bill,” Senate Minority Leader Jones added.

“We, the legislature, need to work in a bipartisan manner as much as possible to lower the cost of living in California.”

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Low income tax credits. California last year authorized spending $20 million on outreach, to get more families enrolled in a key anti-poverty program, the earned income tax credit or CalEITC program. The Public Policy Institute of California reports that, among families with incomes below $30,000 who might be eligible, fewer were signing up in the San Joaquin Valley and the state’s northern regions, than in eastern Los Angeles County and Orange San Diego counties. Also claims were higher in Latino-dominant communities than in predominantly white communities. A key challenge: reaching people whose incomes are so low they don’t have to file taxes.

Reparations collaboration. Six members of California’s erstwhile reparations task force have joined a new collaboration to build support for the task force’s recommendations for repairing racism’s damage. The Alliance for Reparations, Reconciliation, and Truth includes Cheryl Grills, Lisa Holder, Jovan Scott Lewis, Assemblymember Reggie Jones-Sawyer, Senator Steven Bradford, and Donald Tamaki, as well as a panoply of California organizations. Meanwhile, in Florida, a state senator has proposed a constitutional ban on reparations.

A small homeless encampment in Fresno on Feb. 10, 2022. Photo by Larry Valenzuela, CalMatters

Dying on the street. A new national study says non-elderly homeless people are about 3.5 times more likely to die in any given year than people with housing, The San Francisco Chronicle reported. The National Bureau of Economic Research’s non-peer-reviewed analysis posits that a 40-year-old unhoused person has a similar risk of death as a 60-year-old person who has housing.

LA homelessness. Los Angeles Mayor Karen Bass says her administration has housed more than 18,000 unhoused people since she took office in December and 3,283 people went into permanent housing. Most of the rest are in temporary housing — such as shelters, tiny homes and motels — or they’re back on the streets, reports LAist.

Cancer cluster. Farmworkers and families in Greenfield, a small town in California’s Salinas Valley, believe cancer cases in their community were caused by pesticides, the Wall Street Journal reports. Greenfield’s middle and high schools and many of its homes are across the street from fields where growers apply some of the 9 million pounds of pesticides used in Monterey County each year. Some research shows pesticides can harm workers and nearby residents, but tying an exposure to an individual’s cancer often is difficult.

Discontent at Legoland. Ride technician engineers at Legoland in Carlsbad filed for a union election to join the International Association of Machinists and Aerospace Workers District Lodge 947. The Guardian reports low pay, favoritism and inconsistent disciplinary actions prompted the action and that Legoland’s management has retained the same union avoidance law firm used by Starbucks and Amazon.

Most generous. California’s safety net is the third most generous in the nation, behind Hawaii and Alaska, but its rank drops to 5th when you consider cost of living, says Brookings’ new Safety Net Interactive. Nationally, government food and cash benefit programs were 14% more generous in 2019 than in 2001, not counting the large, temporary spikes in funding during the pandemic.

It’s a dirty job. Day laborers told the Los Angeles Times about some of their worst temporary jobs — cleaning brothels, standing in line for employers’ concert tickets, and being exposed to toxic plants and used needles. A Tarzana man last month hired some day laborers to haul away trash bags he said contained rocks and Halloween decorations. When the workers looked inside and saw body parts they returned the bags and money and called police. The man was arrested on charges linked to the disappearance of his wife and two in-laws.

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The California Divide Team

California Divide is a statewide media collaboration to raise awareness and engagement about poverty and income inequality through in-depth, local storytelling and community outreach. The project is based at CalMatters in Sacramento with a team of reporters deployed at news organizations throughout California.

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