California Electric Bill Overhaul: What’s Ahead

California’s electricity payment system is getting a makeover. Recently, state regulators greenlit a shift to flat-rate billing, aiming to curb surging energy costs. Under this new scheme, most customers of investor-owned utility companies will face a fixed monthly charge of $24.15, trimming the per-kilowatt-hour usage fee by five to seven cents.

Low-income households stand to benefit more, with discounted rates of $6 or $12, contingent on factors like participation in aid programs or residency in affordable housing. This move veers from the decades-long practice of paying based on consumption.

The revamped fees will contribute to infrastructure expenses, a key factor driving recent price hikes amid grid upgrades for weather resilience and cleaner energy goals. But what’s next for ratepayers?

The transition won’t hit bills until at least late 2025, starting with San Diego Gas & Electric and Southern California Edison customers, while Pacific Gas & Electric patrons might wait until early 2026. In the interim, utilities will team up with regulators to inform consumers about the new billing model.

Large energy consumers like spacious homes or heavy AC users might see more significant cuts, while smaller households or energy-conscious individuals could face higher bills. Moreover, solar panel users will likely see increased costs due to the added monthly fee.

Uncertainty looms over potential clashes with usage fees tied to general rate cases, still under regulatory scrutiny. Decisions later this year could raise usage rates, counteracting any benefits from the flat fee system.

In 2022, a seemingly mundane budget “trailer bill” set the stage for a seismic shift in how electricity charges would be calculated for millions of Californians. Trailer bills, often appended to the state budget, typically zoom through the legislative process under the radar, receiving minimal scrutiny.

Assembly Bill 205, on June 26, 2022, underwent a transformation, emerging with provisions authorizing the California Public Utilities Commission (CPUC) to introduce income-based fixed charges for electric utilities.