California's electricity rates will shift to a fixed fee based on income(calmatters.org)
calmatters.org
California's electricity rates will shift to a fixed fee based on income
https://calmatters.org/housing/2024/05/californians-electricity-rates/
57 comments
Headline is editorialized. They're not getting rid of usage-based fees like the headline here implies
I don't really understand this article. "The new California charge will be $24 for most customers, but lower income households, who already qualify for discounted electric rates, will see fees of either $6 or $12.". What? Is this like a surcharge of some kind on top of a regular use charge? The average electric bill in NYS is $230 a month, in California it's $220. So I don't really understand the context for this article.
Actually providing electricity consists of two parts. There is the fixed infrastructure of all the transmission lines, transformers, maintenance, and similar, plus the preparedness of generators to provide electricity on demand even when it isn't financially worthwhile. (The latter robustness was behind Texas' problems a few years ago.) Then there is the electricity you actually consume. They were all combined into one per kwh price that was adjusted every year or so by the regulator so the utilities got to cover the costs and get a 5% return on their "investments".
This is now an attempt to bill separately for those fixed costs versus the actual kwh costs. As an example someone with solar and battery completely covering their needs would have been paying $0 (there is more & fine print), despite all that fixed infrastructure being in place to provide all their needs without notice. Similarly homes with solar panels are pumping electricity back into the grid at times now when it is least needed. Commercial solar providers get curtailed and cannot do that. (See "duck curves" for more information.)
People using the least amount of electricity weren't paying much. People using the most electricity were getting solar, and weren't paying much towards that fixed infrastructure. Those in the middle were paying the most. This will in theory move more of the burden onto either side of the middle. Make your own mind up if that is fair.
But it gets worse. Most electricity in the state is provided via PG&E. You'll note they have been in the news over the last decade for various incidents such as exploding gas mains and neglecting maintenance leading to wildfires. That has been very expensive to address and rectify (many billions of dollars). Guess who is ultimately paying for all that? Hint: not the shareholders.
This is now an attempt to bill separately for those fixed costs versus the actual kwh costs. As an example someone with solar and battery completely covering their needs would have been paying $0 (there is more & fine print), despite all that fixed infrastructure being in place to provide all their needs without notice. Similarly homes with solar panels are pumping electricity back into the grid at times now when it is least needed. Commercial solar providers get curtailed and cannot do that. (See "duck curves" for more information.)
People using the least amount of electricity weren't paying much. People using the most electricity were getting solar, and weren't paying much towards that fixed infrastructure. Those in the middle were paying the most. This will in theory move more of the burden onto either side of the middle. Make your own mind up if that is fair.
But it gets worse. Most electricity in the state is provided via PG&E. You'll note they have been in the news over the last decade for various incidents such as exploding gas mains and neglecting maintenance leading to wildfires. That has been very expensive to address and rectify (many billions of dollars). Guess who is ultimately paying for all that? Hint: not the shareholders.
It is a reduction in per-kwh rates coupled to the introduction of a universal flat fee. You can see in the graph in the article, for PGE and SoCal Edison it shifts the burden from users of more than 515kwh to users of less electricity and for SDGE customers the burden shifts from users of more than 313kwh to users of less. Of course there is also an income-based distortion to soften this for poor people.
This seems kinda nuts, why would we incentivize electricity consumption? I guess there is some infra cost to connect customers to the grid but how can that be worth 8--18% of the cost of the kwh?
This seems kinda nuts, why would we incentivize electricity consumption? I guess there is some infra cost to connect customers to the grid but how can that be worth 8--18% of the cost of the kwh?
They are shifting the charges from all usage based to partially fee based, which forces those who use very little (due to having solar on their home for example) to still have to pay. That's offsetting the reduction in usage rates. And in all cases lower income households get subsidies.
Lower income get subsidies (and lowered rates) but at what point does the seemingly corrupt PUC decide to simply raise them again?
The bigger thing that's overlooked in this regulatory change is the removal of caps on fees. So that $24 is going to be $50 or $80 pretty quickly.
The bigger thing that's overlooked in this regulatory change is the removal of caps on fees. So that $24 is going to be $50 or $80 pretty quickly.
OK but if someone with very low income and a "fixed rate" starts using thousands of kwh to mine bitcoins (which are also pretty easy to hide from income!), that still would run up their bill I hope
Currently, I pay $10 per month to be connected to grid. Now I will need to pay $24 with zero consumption for majority of the year.
Me too.
We installed additional solar two years ago, and it's taken our net grid draw to zero, with our house providing excess power to the grid every month. We only pay the $10/month grid connect fee.
Too bad. I'd hoped never to have to pay more than that grid connect fee as a result of investing in my own power generation.
We installed additional solar two years ago, and it's taken our net grid draw to zero, with our house providing excess power to the grid every month. We only pay the $10/month grid connect fee.
Too bad. I'd hoped never to have to pay more than that grid connect fee as a result of investing in my own power generation.
Me three. And I don't understand how a fixed fee is a new concept because I am paying the $10/month fee. So now its a guaranteed $34/month fee, for using zero kWh?!
I love California for so many reasons, but charging me more for using less is not one of them.
If we can’t cut costs by running on pure renewables because we need to “make up for lost profits”, this whole green plan will never work. Will we pay oil companies for lost profit from EVs?
Just make usage below some threshold free and keep the same rates (or raise them) for high users. Simple and fair.
If we can’t cut costs by running on pure renewables because we need to “make up for lost profits”, this whole green plan will never work. Will we pay oil companies for lost profit from EVs?
Just make usage below some threshold free and keep the same rates (or raise them) for high users. Simple and fair.
Remember: PG&E is a for-profit company. The CPUC consists of folks pretty much entirely in bed with PG&E.
I also love California - it's beautiful here, and the people are generally wonderful. But our state government, despite claiming to be blue, is pretty damned conservative across the board. Corporations first, then - if we still have time - the people.
I also love California - it's beautiful here, and the people are generally wonderful. But our state government, despite claiming to be blue, is pretty damned conservative across the board. Corporations first, then - if we still have time - the people.
>Simple and fair.
The whole point is to obfuscate prices and subsidies so the ~50th to ~90th percentile income earners (the young, productive work force) don't get uppity.
If the goal was to simply help the poor, then the government simply would have given them cash. But the goal was to "help" them (or at least say you did), but also mitigate the burden from the most influential (older people/richest people).
The whole point is to obfuscate prices and subsidies so the ~50th to ~90th percentile income earners (the young, productive work force) don't get uppity.
If the goal was to simply help the poor, then the government simply would have given them cash. But the goal was to "help" them (or at least say you did), but also mitigate the burden from the most influential (older people/richest people).
My rate in California is now 41 cents per kwh. My friends in Idaho are paying 10 cents. When (if) gasoline drops below $4.50-4.75 a gallon, it'll make more sense to just run my Chevy Volt on gasoline than electricity.
Californian's like to complain we pay 50-100% more than gasoline than the rest of the country, but it I think if more people knew they'd be really annoyed they pay 4x more for electricity.
Californian's like to complain we pay 50-100% more than gasoline than the rest of the country, but it I think if more people knew they'd be really annoyed they pay 4x more for electricity.
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Y'all pay 41¢?! That's insane, the highest priced energy provider where I'm at is 7¢. Does your electricity come with foot massages? If you take the default electric provider you pay 5¢, and 5.5¢ if you want 100% renewables.
$0.41/kWh is a good price. I pay at least $0.50/kWh and I have family in the exurbs paying as much as $0.91/kWh in San Diego county. That doesn't include the fixed hook up costs that are constantly going up. We have plans that charge a lot less over night ($0.10-0.20/kWh) to charge EVs though.
Is it cheaper to run a gas generator at some point?
Actually yes, I did the math a few months ago and if you have a gas generator such as [1], you can produce electricity from PG&E's gas for cheaper than PG&E's own electrical rates.
Details:
The generator linked below can produce 17 kWh of electricity by burning 307 cubic feet of natural gas. That translates to 3.07 therms of gas, and looking at my bill PG&E charges around $2.3 / therm, so the generator would produce electricity at a marginal cost of $0.41/kWh, cheaper than what I pay.
Of course this ignores maintenance costs and the upfront cost of the generator itself ($6,000), not to mention environmental costs.
[1] https://www.generac.com/generaccorporate/media/library/conte...
Details:
The generator linked below can produce 17 kWh of electricity by burning 307 cubic feet of natural gas. That translates to 3.07 therms of gas, and looking at my bill PG&E charges around $2.3 / therm, so the generator would produce electricity at a marginal cost of $0.41/kWh, cheaper than what I pay.
Of course this ignores maintenance costs and the upfront cost of the generator itself ($6,000), not to mention environmental costs.
[1] https://www.generac.com/generaccorporate/media/library/conte...
I hate to be that guy, but instead of running a generator why not deploy rooftop solar? If we’re already ignoring upfront costs it generates your electricity for zero dollars.
be that guy. if you've got the space for it it's definitely under consideration but there's only so many dollars to spend on things. solar plus batteries is the dream but I'm not made of money. Unfortunately part of these changes actually disincentivzes paying for solar which is just so aggravating. nationalizing pg&e when?
You can also use a plugin hybrid as a quiet generator and battery bank. My Chevy volt kicks out 2kw into the 12v system bus when on, and then you just need an inverter. Once you use up the available 10kwh battery pack, the gas engine will just turn on and it makes about 10kwh per gallon.
And then buy the generator for nights. Last I checked, batteries were prohibitively expensive.
You can get 30 kW (EG4-LifePower4) for $9000. Depending on your handyman skills, you can assemble most of the system yourself and have an electrician check it over, tie it into your electrical service, and sign off on the project.
If I were doing solar and batteries today, I would not try to feed any power to the grid except as part of a virtual power plant that pays me peak rates.
If I were doing solar and batteries today, I would not try to feed any power to the grid except as part of a virtual power plant that pays me peak rates.
Yes and a lot of people around here already have propane generators because SDGE kept turning off power once or twice a week during the day for the infrastructure upgrades that took years.
Cali is trying hard to ban gas generators too
You could just run a plugin hybrid vehicle with an inverter and power a house for around around 50 cents a kwh, at $5.00 a gallon gas.
So soon yes I think people may start just using cheap gasoline generator, or their plugin hybrids, to power their houses if electric companies go crazy.
It's already common for people to not want to pay for electric hookup when building new developments. Solar, batteries, and generators are cheaper by a wide margin.
So soon yes I think people may start just using cheap gasoline generator, or their plugin hybrids, to power their houses if electric companies go crazy.
It's already common for people to not want to pay for electric hookup when building new developments. Solar, batteries, and generators are cheaper by a wide margin.
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Genuinely, I'm so sorry. I can't even imagine my electric bill being 5x let alone 15x. Do y'all just have to conserve like crazy or is your electric bill like a $1000+/mo and that's just normal.
The extreme rise in prices is relatively recent, mostly due to the court decision post the Camp fire that said the power companies are liable for the fires. Through the 2010s power was around $0.15-0.30/kWh iirc but after the decision the power companies had to replace all their aging infrastructure all at once and pass the cost on to consumers.
The rise coincided with the large drop in solar and battery prices, so most people just have solar now. Before installing solar and batteries my family in the exurbs did conserve very well and paid under $100/mo. I don't conserve very well and pay $125-200/mo. Worst bill I've ever had a few years ago was $700 but I was running indoor grow lights and had doors open for animals while running AC during a heatwave (it was ridiculously dumb and the cost is why I don't do it anymore).
The rise coincided with the large drop in solar and battery prices, so most people just have solar now. Before installing solar and batteries my family in the exurbs did conserve very well and paid under $100/mo. I don't conserve very well and pay $125-200/mo. Worst bill I've ever had a few years ago was $700 but I was running indoor grow lights and had doors open for animals while running AC during a heatwave (it was ridiculously dumb and the cost is why I don't do it anymore).
That's bay area price. Non-peak. Peak prices are 60c+ for TUI or if you're over the baseline.
I do wonder if everyone is using the same rate structures when they compare, things like fixed fees for consumption/delivery, delivery charges, and actual usage.
If I included the base fees and all that, it would be higher. The 41 cents is the fee for energy alone. So yes even if I just used 100kwh being out of town or something, my bill would be even higher than $41.
Yes, about a third of my electricity costs are fixed fees. Did California actually have no fixed fees before? Those fixed fees make my effective rate much higher than the posted rates.
i pay roughly the same in NYC
I feel deceived for installing a roof-top solar. Having got one to help CA go solar, it is now becoming a burden as I will be paying more in monthly bills. PGE has already reduced the true-up they pay for generating more electricity, this one is another nail in the coffin.
What is stopping low income people from growing weed with subsidies for power and selling it illegally and not reporting the income to stay under the limit?
What's stopping anyone from doing illegal activities?
Electricity cost, for one.
Are you asking for a friend?
Where is the incentive for everyone to not mine bitcoins?
This is not eliminating use-based billing. It's adding an income based fee on top of rate decreases. You'll still pay for the electricity at some of the highest rates in the world.
Something that got lost due to the editorialized headlines
I have solar, and it's mostly (90%) not being utilized and sent back (I overspecced when NEM 3.0 was about to hit).
Prior to this, it made sense to sell it back to PG&E. Now I'm looking for uses to only sell back what it makes sense to sell back. Obviously transitioning gas therms and replacing with electric is underway (for heating/cooking), as well as charging an EV but there will likely still be excess.
So mining bitcoin? But only if I can spin up & down the mining when solar ramps up/down.
Prior to this, it made sense to sell it back to PG&E. Now I'm looking for uses to only sell back what it makes sense to sell back. Obviously transitioning gas therms and replacing with electric is underway (for heating/cooking), as well as charging an EV but there will likely still be excess.
So mining bitcoin? But only if I can spin up & down the mining when solar ramps up/down.
where are you located? there's a company doing installs in San Diego doing exactly that
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> The new California charge will be $24 for most customers, but lower income households, who already qualify for discounted electric rates, will see fees of either $6 or $12.
This will never go down. It will only go up.
And the real idea here is to get a min fixed amount from net zero customers with their own generation (ie solar).
This will never go down. It will only go up.
And the real idea here is to get a min fixed amount from net zero customers with their own generation (ie solar).
PG&E (dunno about the others) is not a public utility, it is a private company that has been granted a monopoly by the local government. They made 2.2 billion dollars profit in 2023, after going bankrupt in 2019. There is no incentive to reduce prices since there aren't really any competitors.
Every fee increase has to be granted by a regulatory agency (CPUC) which clearly hasn't been doing much regulation, and gives us odd pricing strategies like this one.
One small city (Alameda) in the Bay Area, surrounded by PG&E customers, has its own municipal utility and they pay a third of the cost.
Every fee increase has to be granted by a regulatory agency (CPUC) which clearly hasn't been doing much regulation, and gives us odd pricing strategies like this one.
One small city (Alameda) in the Bay Area, surrounded by PG&E customers, has its own municipal utility and they pay a third of the cost.
I'd be fine if this was a true fixed fee, that gets increased when infrastructure is gets improved, similar how water is billed.
But I know it won't because ya know corruption and waste.
But I know it won't because ya know corruption and waste.
At first this seemed ludicrous, but there is some rationality in charging net zero customers right? To put it another way: assuming the customer is only using the grid as an emergency backup and as a discharging service - isn’t that still a service? Even if the transmission lines are only taking power from my property, they still need maintenance?
Presumably maintenance costs that would be overcome trivially by my generating a bit of excess power - but still non-zero?
Presumably maintenance costs that would be overcome trivially by my generating a bit of excess power - but still non-zero?
This is pure corruption (from a SacBee article [1]):
"When a proposal to roll back the fixed rate plan was discussed in a committee hearing last month, all 14 lawmakers abstained from voting — shelving the controversial measure."
So no vote at all on rolling back fixed rates. We truly have the best democracy money can buy.
[1] https://www.sacbee.com/news/politics-government/capitol-aler..."
"When a proposal to roll back the fixed rate plan was discussed in a committee hearing last month, all 14 lawmakers abstained from voting — shelving the controversial measure."
So no vote at all on rolling back fixed rates. We truly have the best democracy money can buy.
[1] https://www.sacbee.com/news/politics-government/capitol-aler..."
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Sounds like inhabitants of that state need to get together in local groups where everyone has solar panels on the roof, some have wind generators, some have ICE-powered generators and maybe some even have some small-scale hydro (does that exist there?) into local 'microgrids' and just go 'off-grid'. From what I read here even running natural gas powered generators end up being less expensive per produced kWh so it should easily be less expensive than pulling power from the grid. If the grid does not want you, why would you want the grid?
Call your local groups 'electrical power councils' (Электроэнергетические советы or 'Elektroenergeticheskiye soviety') - and it should go down quite well with the more 'progressive' sections of that state.
Call your local groups 'electrical power councils' (Электроэнергетические советы or 'Elektroenergeticheskiye soviety') - and it should go down quite well with the more 'progressive' sections of that state.