New California proposal: Use less electricity, pay more
In the next four years, Californians who use the least electricity may see their utility bills go up — while those who use the most get a break.
State energy regulators on Tuesday proposed major changes to the way residents pay for electricity in the biggest overhaul of utility rates since California’s energy crisis more than a decade ago.
The state’s big, investor-owned utility companies currently charge different prices for electricity based on four “tiers” of usage as a way to encourage conservation. The proposal issued Tuesday by two administrative law judges at the California Public Utilities Commission would cut that number to two tiers by 2019, with only a 20 percent difference between the prices charged for each. Right now, PG&E’s top residential tier charges twice as much for electricity as the bottom tier.
The changes may seem counter to the state’s long-standing push for energy efficiency. But, according to the commission’s staff, the most efficient California households currently pay less for electricity than the utilities spend supplying it to them. They are, in effect, subsidized by households in the higher tiers.
“The status quo is a form of subsidy,” said Scott Murtishaw, energy adviser to commission President Michael Picker.
The proposed changes go further than just cutting the number of tiers.
Starting this summer, customers would have to pay a minimum bill of $10, with low-income households paying at least $5 per month. The utilities could later change that minimum bill to a fixed monthly charge for all users, with the commission’s approval.
And for most customers, electricity rates would vary by the time of day, starting in 2019. Power would probably cost the most when usage peaks in the late afternoon, with cheaper prices at night — another way of encouraging conservation.
The changes would apply to the state’s big, investor-owned utility companies, not the municipal utilities that serve such cities as Sacramento and Los Angeles. All of the changes require the approval of the five-member utilities commission to take effect. A vote could come as early as May 21.
PG&E backs idea...
Under the proposal, Pacific Gas and Electric Co. would shrink the number of tiers to three next year, then two in 2018. And in each year through 2019, the difference between the top and bottom years would shrink.