California recently made a decision that affects how much Californians pay for electricity. The California Public Utilities Commission (CPUC) gave permission for big utility companies like Pacific Gas & Electric to add a fixed charge to people’s monthly power bills.
This charge covers the cost of setting up and maintaining the equipment needed to deliver electricity to homes. In the wake of the fires started by equipment , energy companies say they are experiencing higher maintenance costs.
Existing solar owners that went to great lengths to reduce or even eliminate their power bill are in for a surprise.
Starting late next year, most people will see an additional charge of around $24.15 each month on their bills. However, those with lower incomes enrolled in certain discount programs will pay less, either $6 or $12 per month. In return for this new charge, the price of electricity will decrease by 5 to 7 cents per kilowatt-hour. Existing solar users will get a double whammy, take the reddit user above who’s bill after installing a solar system dropped to just 17.21 per month. The flat charge will more than double his bill and his solar production will now be credited at the ‘lower’ electric retail rate further increasing his electric bill. This is a hidden tax on solar solar users and users that use very little electricity.
California is shifting towards cleaner energy sources like solar and wind, aiming to reduce pollution. Leaders in the state encourage using more electricity, particularly from renewable sources. The state leads in electric vehicle adoption and promotes electrifying homes with appliances like heat pumps and stoves.
The CPUC president, Alice Reynolds, emphasizes the need to increase electricity usage to meet climate goals. This move is expected to benefit those using a lot of energy, such as electric vehicle owners and people with electric homes. They could save an average of $28 to $44 per month due to lower electricity prices outweighing the fixed charge.
Residents in hot areas like Fresno, where air conditioning is crucial, stand to save money too, with potential savings of about $33 during summer months. However, increased electricity usage has strained the state’s energy supply, leading to issues like rolling blackouts during high-demand periods.
State officials advise conserving energy, especially during peak hours when solar energy is less available. Some critics worry that lowering electricity prices may discourage conservation efforts.
However, Commissioner John Reynolds argues that the fixed charge won’t undermine conservation efforts, as utilities already offer incentives to conserve during peak hours.
For those using less energy, including apartment dwellers or those with solar panels, the fixed charge might raise monthly bills. Critics suggest there are better ways to reduce utility rates and encourage clean energy adoption. A bill in the state Legislature aims to limit any increase in the fixed charge and cap it at $10 by 2028.
This proposal, though lower than what utility companies requested, raises concerns about increasing costs in a state with already high utility rates. It makes solar make less ‘cents’.
