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.
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.
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
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?!
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?
