In return for paying a mandatory $24.15 fee each month, consumers will pay a lower rate for each kilowatt of power they use.
The commissioners, who are appointed by the governor, sided with the state’s three largest utilities by approving the proposal. They said by lowering the rate per kilowatt hour it will encourage more people to buy electric cars and replace gas appliances in their homes, which would reduce the use of planet-warming fossil fuels.
The change affects customers of investor-owned power companies, such as Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. It does not apply to customers of the Los Angeles Department of Water and Power or other municipal utilities.
The decision was criticized by some lawmakers from both parties, as well as a coalition of more than 250 consumer and other groups, who say millions of Californians living in small homes and apartments who are low users of electricity will now subsidize households that are heavy power users.
Waving signs that said, “Protect Working People” and “Protect Renters,” dozens of coalition members opposed to the fee protested in front of the building where commissioners were meeting.
“This will punish people who use less energy,” said Jenn Engstrom, the state director at consumer advocacy group CALPIRG. “This will encourage high consumption and it will increase bills for millions of Californians.”
Commissioner John Reynolds dismissed the concerns before he voted for the proposal. “The public discourse has been disappointing,” he said.
He agreed that under the change some customers’ total bills will go up, while others will see a decline. But the focus, he said, should be on the reduction in the rate per kilowatt hour, which is needed as the state tries to move more people away from fueling their cars and homes with fossil fuels to electricity, which is increasingly coming from wind and solar farms.
“We can reduce our greenhouse gas emissions as a state,” he said.
The commission was acting to approve the details and amount of the new fixed fee to comply with a 2022 law known as AB205.
Gov. Gavin Newsom proposed AB205 as part of his budget on June 26, 2022. Lawmakers approved the bill and Newsom signed it in a few days with little public discussion.