SACRAMENTO, Calif. (CN) — The California Public Utilities Commission voted Thursday to implement a fixed-rate plan that will affect some 25 million people in the state, shifting a portion of what people pay in power costs to a $24.15 monthly fee.
People enrolled in lower income assistance programs will see discounted flat rates of $6 and $12.
The change essentially shifts portions of a customer’s monthly bill, moving some usage costs to a fixed rate. That’s expected to reduce kilowatt-per-hour usage rates by 5 to 7 cents. It provides no additional profit to the three utilities affected.
The change will become effective in late 2025 for customers of Southern California Edison and San Diego Gas & Electric Company. PG&E customers will see the change in early 2026.
“Your bill will still vary depending on how much electricity you use,” said commission board president Alice Busching Reynolds.
The move, passed 4-0 by the commission, was a requirement of Assembly Bill 205, which became law in 2022. It’s meant to incentivize people to switch from gas-powered vehicles and appliances to electric ones, helping the state meet its climate goals.
Commissioner Matthew Baker recused himself from a handful of agenda items.
Transitioning people to electric vehicles and appliances is “transformative,” Reynolds said, meaning the state’s electric rate design must change as well. The fixed rate is an incremental but important step toward making electricity more attractive to people.
Ratepayers could see $28 to $44 in monthly savings by switching their vehicles and appliances to electric. It also brings utility billing into line with most of the state’s publicly owned utilities and most other states.
The monthly fixed-rate fee of $24.15 is the same as what Sacramento Municipal Utility District customers pay. It’s also much less than what some stakeholders suggested — Reynolds said one asked for $73 a month.
Saying she’d support the change, Commissioner Darcie L. Houck noted many in the public have expressed concern over their electric bills. Houck said the commission must remain careful when considering any future increases in the flat rate.
“The decision before us is a positive first step in rate revision,” Houck said.
A handful of people who spoke during public comment opposed the change. Yvette DiCarlo, who said she represented several nonprofits, opposed shifting costs. She argued it would hurt those who live in smaller homes and apartments.
One man said the commission should put a cap on the fixed rate, though the commission opted against that move.
Commissioner John Reynolds said he found some aspects of the discussion irresponsible. He chided people who have argued that a fixed charge will reward people who waste energy. The more revenue collected from a fixed rate means less is needed from usage.
John Reynolds also disputed the idea that the change is unfair to people who make higher incomes. He argued that very little in the utility system favors lower-income people.
Republican state lawmakers roundly denounced the proposal in the days leading up to Thursday’s vote.
The state Senate Republican Caucus, led by San Diego Senator Brian Jones, asked the commission to reject the fixed rate. Noting the commission is appointed by Democratic Governor Gavin Newsom, the Republican caucus in a statement pointed to the uncapped rate. It’s also flawed because customers must pay the $24.15 fee regardless of their electrical use.
“Their rubber-stamp approval to add a new $24.15 per month electricity charge is unfair and unjust,” Jones posted Thursday on X, formerly Twitter. “Even worse, thanks to Democrat lawmakers, the commission now has the power to jack up this fee whenever they please — $24 today could easily be $100 next year.”
Assemblymember Kate Sanchez, a Rancho Santa Margarita Republican, also opposed the commission’s move in a message on X, formerly Twitter.
“… it gets even worse: these unelected commissioners can increase the fee whenever they want!” she tweeted. “This is the result of … Dems kicking too much power to the admin.”
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