Cali utilities propose Income Based electricity rates

[bkp_duke]

Can't make this up.

SDG&E proposes billing electricity customers based on income

The proposal is part of a new state law requiring utility companies to come up with fixed-rate plans to make billing more equitable.

www.cbs8.com

SDG&E Proposes Changes to Billing

The plan would have a fixed rate for the delivery of electricity to help struggling families keep up with their bills.

www.nbcsandiego.com

SDG&E proposes adding flat fee to utility bills

It is part of a legislative mandate being shepherded through the regulatory process by the state’s utility regulators, the California Public Utilities Commission.

www.kpbs.org

EDIT - apparently this is already law:
"Assembly Bill 205 requires the California Public Utilities Commission to create an income-based fee for the state’s utility customers. That mandate offered no guidance besides the idea, so the CPUC requested proposals."

 

[Dukeybootie]

Edison monthly bills could change for many customers due to new state law

Customers for California’s three major power companies can expect to see some big changes in their monthly electricity bills.

www.ocregister.com

The proposal, as quoted from the article:

Here’s how the fixed charges would work in the PG&E service territory. The numbers are based on a four-person household:

• Households earning less than $28,000 a year would pay a fixed charge of $15 a month on their electric bills.
• Households with annual income from $28,000 to $69,000 would pay $30 a month.
• Households earning from $69,000 to $180,000 would pay $51 a month.
• Those with incomes above $180,000 would pay $92 a month.

**************************************************************************************************

On the one hand, I suppose it is no different from income tax brackets. I have personally benefited from tax incentives to "go green" so money asked of me to help the general population do the same should theoretically not bother me.

On the other hand...something about this whole thing is really disturbing.

What are your thoughts?

 

[holeydonut]

I just think it’s stupid how easy the IOU’s (and the lawmakers the IOU’s bribed) could create a class warfare trope. They easily succeeded in taking attention off of how poorly the IOU’s are run and are instead making the different classes fight each other over “fair share equity”.

NEM 3 pit “rich solar folks” against the poor.

This AB 205 pits rich vs poor again. AB 205 should have been about incentive based regulation to get the utilities to cut costs through efficiencies that and benefit everyone. Instead, AB 205 just let’s the classes duke it out.

 

[gaswalla]

These proposals remove incentives for conservation or going to solar.

Also, as noted: "Faruqui said 173 investor-owned utilities around the country charge a fixed rate to pay for part of their service. None base those fixed charges on income, and the average fee is about $10, with the highest at $40."

 

[DP26]

So much unsaid. Who’s income counts? Just the name on the bill? W2 income? Who else are we going to have to share our finances with? Who is going to check to see who lives where? Would putting utilities in the name of a low or no income adult (say a student living at home) allow parents to save a few $?

 

[holeydonut]

So much unsaid. Who’s income counts? Just the name on the bill? W2 income? Who else are we going to have to share our finances with? Who is going to check to see who lives where? Would putting utilities in the name of a low or no income adult (say a student living at home) allow parents to save a few $?

My understanding is they’ll ask for reported tax filings at the same address as the meter. The IRS and the state franchise board already have this. And I’m sure when you transfer new service PG&E will ask for a copy of your prior year tax return hah.

What is annoying about this is $180k income hardly seems like a baseline for a “wealthy fat cat” type of household. Can a family actually afford to purchase a home in California at today’s interest rates and only $180k income? I don’t know any banks that will extend a non-conforming 6.8% interest loan on a 80% LTV for a $1.2mm home and only $180k annual income.

The wealthy fat cats I know at work all have a “primary” home in Nevada where they reside 51% of the year. The remainder time is spent living at two other California investment properties that also act as income generating side-homes. So they’ll only pay state income tax at Nevada’s 0% since they aren’t California residents. I wonder what their energy fixed costs will be.

 

[cpa]

So, are the IRS and FTB going to share information with a private entity? Current laws prohibit this. (At one time there was some sort of form to complete when applying for a loan that authorized the IRS to share AGI or some very very limited information with the prospective lender, but I don't know if this is still in effect.)

Will we provide information voluntarily? Is it possible that a person has a once-in-a-lifetime windfall that boosts their income to 300K when under ordinary circumstances their income is 60K?

If I understand this correctly, we pay a fixed fee on top of our usage. We're in PG&E territory, so a nifty $1,000/year just to have a wire strung from a pole to our house to have lights when the sun is down and to keep food from spoiling in the old coolerator. With our solar panels, we've used about 1,200 kWh per year above what we generate. Once we are off NEM 1 in a few more years, what will be the rules in effect then?

Maybe it is time to stock up on candles and contract with the iceman for delivery. This proposal is

 

[sorka]

....if you make over $180K / year.

PG&E monthly bills could jump for many customers due to new state law

Customers for California’s three major power companies — including PG&E ratepayers — can expect to see some big changes in their monthly electricity bills.

www.siliconvalley.com

Surprised there isn't a big thread blowing up about this. This is another corrupt money grab by the IOUs and CPUC. They're trying to bill it as a steal from the rich and give to the poor scheme except that you'd only get a low income discount if you make $28K. If you make $28K - $69K, you still pay $30 / month.

My wife and I discussed it this morning and we've decided it's time to leave California. I was already in favor leaving a decade ago but she resisted due to having family here.

It disproportionately punishes solar customers because the proposal reduces the electricity rate but adds a fixed cost so if you're already net zero or close to it so that you don't have a true-up bill(except for NBCs - minimum billable), you'll have this new fixed charge. If you don't have solar, the lowered rate will offset some of the fee.

 

[DP26]

Income based anything hurts the middle and benefits the high and low. Period. Why? Low is straight forward. For high earners, they likely can manipulate how they get directly paid and become low or middle “earners” on their 1040.

 

[David_Cary]

Despite how poor you might feel, $180k is not middle anything.
Yes, the very high earners might work their way around this but is that worth doing to save $500 a year?
The fact is the upper middle class (and rich) have been very lucky. And by lucky I mean using their political clout to cut their taxes to the bone relative to other rich countries. And relative to how it was for much of modern time in the US.

I happen to be upper middle class. My tax burden feels huge but as a percentage, is actually quite low. I can complain all I want about the SALT caps but the majority of my rate structure is not bad. One of my partners thinks he pays thinks he pays 35% of all his income to the feds. The sense of entitlement and woe is me is abundant in him and many others.

The fact is that income inequality is a very large problem. And yes, the super rich have the greatest advantage. But that doesn't many you are going to get a majority to sympathize with your large monthly bill for electricity. I mean how does this compare to your property tax?

 

[gaswalla]

This ^ is the reason non-government entities are now playing the role of equalizer… If folks believe they want to pay more taxes to level society (no pun intended), then vote accordingly, and the democratic system will determine the approach. But to have private, publicly traded utilities play the role of equalizing society and then to justify it, that is where this all goes wrong

 

[andy92782]

Depending on whatever the rates wind up being this will discourage conservation. If the utility is going to charge me an arm and a leg flat rate no matter what, plus reduce the actual usage charges, I may as well start turning everything on...

 

[qdeathstar]

Depending on whatever the rates wind up being this will discourage conservation. If the utility is going to charge me an arm and a leg flat rate no matter what, plus reduce the actual usage charges, I may as well start turning everything on...

That should be good for them…

 

[bkp_duke]

Since I posted this, I've been talking with a bunch of neighbors about it, and getting a feel for what locals think. Everyone I talked to had no idea this was passed into law, the few that had heard about it thought it was another money grab by SDG&E and other utilities.

First, everyone I've talked with has serious questions about the legality of IRS/FTB sharing ANY income information with private companies (i.e. the utilities). That has to be a breach of privacy (which ironically CA state has been having a hissy fit about with tech companies sharing info on CA residents).

Second, some of us have done some "back of the napkin" math about what it would take to go completely off grid. I actually have a good bit of this data since I have had the solar + PW2 system in my sig since 2017 (16kW + 4 PW2). It helps living in SD county where we get a lot of sun, although this year has been the exception with all the rain. Until this year I would have been ~98.5% self sufficient, and am generally a net over-producer of electricity. The big sticking point here are those weeks when it's cloudy for a week straight with the rain, etc.

To go off-grid, I would need the following:
1) 2 more PWs, and probably 2-3 kw more solar. The PWs are more important, as we usually fill those up before noon.
2) Tie-in a secondary backup power source, such as a NG generator to use in the event that the PWs are fully depleted. This is unfortunately absolutely necessary when we have a week straight of cloudy weather. Given the ~$1500/yr "connectivity" charge that is being proposed, this pencils out on a payback of 5-8 years, depending upon the size of the generator and the install costs. Just hoping that the utilities don't consider "equity rates" on the NG as well, or we will have to consider on-site storage like a propane tank.
3) Supercharge both Teslas in the event that weather gets bad. It's not optimal, and would cost a lot more, but the house can run on the 4 current PWs for 2-3 days if we are not charging the cars. Fortunately there is a Supercharger 3 miles down the hill, so it's not that far out of the way.



What we REALLY REALLY need is competition, not more regulation. But that's not something even remotely on the radar of our legislators.

 

[jaed]

Not sure if this has been talked about yet but it appears that PG&E... will start adding an extra charge to the bill depending on your income?
Has anyone heard if we will pay a lower per KW rate? Or any other information.
On the surface it looks like it might screw us over again but open for discussion.

California utility companies propose charging customers based on how much money they make

 

[charlesj]

What's next, water based on income?
Don't see how this can be legal or even pass CPUC.
What if we lie about income? Will they have access to tax returns? Really?
Monterey had water allowance based on number of people living in house that was all convoluted and went away.

 

[taphil]

CA utility companies already won with NEM3.0, though it didn't include fixed monthly grid access charge.

Now they want their fixed monthly charge. And they'll base it on income to appear progressive and appeal to the public with decepitve marketing and PR.

Then the lower kwh charges will increase yearly like usual, so in 5 years they'll be back to today's value.

Shareholders will rejoice.

 

[STS-134]

This is stupid. If you want a progressive tax to support the grid (just like we have progressive taxes to support a lot of things), then it should be structured as a tax and collected via the CA FTB just like every other tax. (I'd say the same thing about the way mobile phone companies subsidize phones but put you in a contract with an "early termination fee"...NO! They're basically giving you a loan on the phone that gets paid back over the contract term, and as such, it should be structured as a loan and you should be able to see principal, interest, payoff date, etc.). And in the case you bail early, you shouldn't owe a flat "early termination fee" but the actual balance due on the loan, whether it is $300 or $30 or anything else at the time.

So I agree with the concept, in principle. But, the state should own and operate the grid, and support it via taxes. PG&E should be disbanded, its shareholders wiped out, and no corporation with a fiduciary duty to its shareholders first should ever again operate electricity, gas, or water utilities in California. But this proposal basically allows PG&E, a for-profit corporation, to collect a progressive tax. What other for-profit, publicly traded corporations are allowed to do this?

 

[cali8484]

California POCO's already have offered income based rates (e.g. PG&E CARE/FERA) so using income to determine rates is not really new. In fact, kind of expected given that the POCO's are investor owned to maximize their ROI.

 

[charlesj]

.... What other for-profit, publicly traded corporations are allowed to do this?

Just watch. If power companies get away with this, then the floodgate is opened for everything else.