California changes how energy bills calculated
Fixed charge of $24, but lower kilowatt rate
SACRAMENTO, Calif. — California regulators on Thursday voted to make it cheaper for people to charge electric cars and cool their homes in the summer, a decision heralded as part of the state’s transition to clean energy but derided by others who warn it will raise prices for people who don’t use as much energy.
The California Public Utilities Commission voted to let the state’s big investor-owned utilities — including Pacific Gas & Electric — add a fixed charge to people’s power bills each month to pay for installing and maintaining the equipment necessary to transmit electricity to homes.
For most people, the charge will be $24.15 per month and will take effect starting late next year. Others with lower incomes who are enrolled in one of two discount programs will pay less, either $6 or $12 per month.
In exchange for the new charge, the price of electricity will drop by between 5 cents and 7 cents per kilowatt hour. One kilowatt hour is how much power it takes to use a 1,000-watt appliance — a coffee maker or vacuum cleaner, for instance — for one hour.
California now gets most of its energy from things like solar panels and wind turbines as opposed to burning coal and other fossil fuels that pollute the atmosphere. As a result, California’s leaders have been asking residents to use more electricity than ever before.
In 2022, California accounted for 37 percent of the nation’s light-duty electric vehicles, or about six times more than Florida, the state in second place, according to the U.S. Energy Information Administration.
The state has also pushed policies to encourage people to electrify their homes, like installing electric heat pumps and stoves.
“We’re at a time now when our climate goals are not met by necessarily using less electricity. We need to start using more electricity overall,” said Alice Reynolds, president of the California Public Utilities Commission.
For people who use a lot of energy each month, the proposal approved on Thursday will likely lower their monthly bills. People who own electric cars and have electrified their homes will save an average of between $28 and $44 per month, according to the commission. That’s because the savings they get from the price drop on electricity will be more than the amount they pay for the new fixed charge.
It will also benefit people who live in areas where it gets really hot. People in Fresno — where temperatures can often exceed 100 degrees Fahrenheit — would save about
$33 running their air conditioners during the summer, according to the commission.
Using more electricity has strained the state’s supply. In the summer of 2020, demand for electricity was so high that the officials had to order rolling blackouts to make sure the state didn’t run out of energy.