Opposition to the pending income-based fixed charge on Californians’ utility bills surfaced Monday in a letter from the California Senate Republican Caucus to Gov. Gavin Newsom.

The letter notes that nearly two dozen Democratic lawmakers have broken ranks and are now calling for a review of the provisions of Assembly Bill 205, which requires the Public Utilities Commission to create at least three levels of income-based fixed charges that would be income-dependent.

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The Democrats had asked the PUC to delay implementation of the income-based fixed charges to allow more time for public involvement in the process.

Officials have argued that the fixed charges would not result in higher electricity costs, but would rebalance the amount paid by customers, shifting more of the burden of the utilities’ fixed costs such as maintenance and operations to wealthier customers and lowering the per-Kilowatt hour cost of electricity.

Electric Rates Include Fixed Costs

Electricity rates from the state’s three investor-owned utilities now contain both the cost of electricity as well as fixed-cost charges. As more customers have switched to solar systems to power their homes and have paid less to utility companies, financial support is shifting to customers who are still dependent on the grid.

By requiring all customers to pay fixed charges, customers who buy little electricity would pay their share of supporting the grid through the fixed charge, the bill’s supporters say.

However, critics say that the fixed charge would remove incentives for customers to lower their costs by conserving electricity and would also raise costs for those customers trying to conserve. That would hit lower- and middle-income households hard and would come on top of PG&E’s rate increase that the PUC approved earlier this month. That hike was made, in large part, to cover the costs of burying power lines to lower fire hazards.

In addition, the fixed charges also might make it less affordable for customers considering a solar system.

A commenter identified on the PUC’s website as Trevor Owen of Oceanside said the utilities’ proposal, which would charge high-income households in the San Diego area as much as $128 monthly in fixed charges, “unfairly punishes” homeowners who have invested in solar systems. “I am part way into a long-term contract with my solar provider, and if this proposal goes through I’ll be paying much more monthly than if I had never installed the system in the first place. Investing in solar should be encouraged, not penalized.”

Take Time for a Closer Look

The Senate Republicans called on Newsom to support efforts to slow down implementation and provide an opportunity for a more thorough public discussion.

“The bottom line, Governor, is that the members of the Senate Republican Caucus have been making bipartisan attempts for months to resolve the problems caused by AB 205,” the senators said in Monday’s letter. “It appears that several Assembly Democrats are now willing to join in this effort.

“We are asking you to join us and encourage your Democratic colleagues in the State Senate to also work in a bipartisan manner to repeal or substantially amend AB 205 to help resolve this issue for all Californians.”

The governor’s press office did not respond to a request for comment from GV Wire on Tuesday morning.

The Dangers of Budget Trailer Bills

The Republicans’ letter says that the income-based fixed charge language was written into AB 205 only days before it passed both houses of the Legislature with little discussion and was signed into law by Newsom.

Major policy issues such as this that will have a big impact on utility customers should not be swept into budget trailer bills such as AB 205, the letter said.

“For years, our caucus has advocated against adopting significant policy changes in budget bills, particularly since very little deliberation, discussion, or debate on the policy occurs,” the Republicans wrote.

The caucus attempted at the end of the 2023 session to introduce an amendment on the Senate floor to remove the AB 205 fixed-charge provisions from the Public Utilities Code “to allow for proper public discourse,” but the amendment was defeated.

The public can submit comments to the PUC’s website and also during voting meetings, either in person or by telephone.

As of Tuesday morning, 814 comments had been posted to the website, including Trevor Owen’s.

California Senate Republican Caucus Letter