If the CA government thinks we should have this kind of pricing or means-based support of the utilities, I think they should design it into the income tax code and provide subsidies to the utility from collected tax revenue.
An alternative might be to extend current CARE, FERA, and Medical Baseline Allowance programs to extend discounts or payment assistance for households in need. But I think these programs may also be flawed in that they endanger the privacy of those needing assistance. The state tax board already has the necessary data and the state should not be supporting the creation of additional parallel systems.
Source: I got a new apartment in a new state and had a lot of difficulty proving that I make enough money to get electricity from the utility company. The utility company was harder to convince than the landlord renting me the actual apartment.
The breakdown varies wildly depending on which electrical market you're in, and where in that market you're physically located. The price you pay is mostly a combination of:
- Wholesale energy prices set by multiple markets (week ahead, day ahead, balancing) - Market fees (minimal) - TSO/ISO tariffs for running the transmission grid and any ancillary services, as well as grid maintenance and capital recovery - Similar DSO tariffs for the distribution grid - retail costs that represent the overhead of any electricity retailer that exists between you and the DSO - taxes and other fees depending on your state
In my country, the wholesale cost is approximately 60%, TSO and DSO fees are around 10-15% each, retail is around 5% and other fees and taxes make up the rest. My numbers are loose because it has been 4 years since I broke it all down last.
Your underlying point is right though, that richer people can afford to buy their own production to avoid most of these fees. The result being that poor people shoulder more of the cost.
And handing out subsidies for electricity/energy usage is the last thing global warming needs.
And this is huge subsidy to high energy users from those who are saving and reducing their energy usage.
The article uses confusing and misleading terminology. The _rate_ charged for electricity is in no way based on income; this is about the "residential fixed charge", the bill component you pay regardless of usage. This fixed charge was introduced to counteract a freeloader phenomenon from people who benefited from electric infrastructure but paid next to nothing because of solar rebates.
S: We simply unleash wave after wave of Chinese needle snakes. They'll wipe out the lizards.
L: But aren't the snakes even worse?
S: Yes, but we're prepared for that. We've lined up a fabulous type of gorilla that thrives on snake meat.
L: Then we're stuck with gorillas!
S: No, that's the beautiful part. When wintertime rolls around, the gorillas simply freeze to death.
(This joke is about net metering.)
If this goes through, we will probably see people running their AC and heat more because there's no incremental cost for them to do so.
We need to be incentivizing reduction in energy use, not making it free to use more.
The real problem with the proposal is that it perpetuates hidden subsidies for rural electric networks. The progressive fixed rates should be related to the cost to connect that particular household to the grid.
So it will definitely encourage more consumption but it's not the complete lunacy of flat rate electricity.
> Existing law authorizes the PUC to authorize fixed charges that do not exceed certain amounts per residential customer account per month, as provided. This bill would delete the requirement that each electrical corporation offer default rates to residential customers with at least two usage tiers. The bill would additionally require the PUC to ensure that the approved fixed charges do not unreasonably impair incentives for beneficial electrification and greenhouse gas reduction. The bill would instead authorize the PUC to authorize fixed charges for any rate schedule applicable to residential customer accounts. The bill would eliminate the cap on the amount of the fixed charge that the PUC may authorize. The bill would require the fixed charge to be established on an income-graduated basis, as provided, with no fewer than 3 income thresholds so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage.
Since the income bracketing is a legal requirement, the CA state government will be sharing income data with these utility corps. I would imagine. So the bill’s obviously being positioned as relief for low income households, but what it would do is hand these utility oligopolies access to intelligence on their captive customers so it can fully exploit their price elasticities.
[0] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
Furthermore why would we want to disconnect cost from utilization? This seems ridiculous on the face of it, and the rates they're describing for the high-earners strike me as low compared to how wasteful such households tend to be.
Am I missing something? Is some millionaire with an electric heated outdoor pool going to be paying $92/mo in this scheme? That's madness and incentivizing the wrong things entirely.
Or are those figures listed just averages expected under the new scheme, but still scaled by utilization?
Also what happens if you refuse to provide proof of income level under this scheme? Does it just default to the highest bracket? Many actual low-income folks won't be filing paperwork proving their taxed income level with the power company, will this just fuck them over by treating them as high earners?
If we further assume big tech companies have 5 CxO (CEO, CFO, CTO, COO, CISO, CMO; pick 5), and that there are more than 1 big tech companies headquartered in California. If we assume those officers make large incomes that aren't W2 incomes, that they live in California, and, further, live in areas serviced by PG&E (which, statistically speaking is basically all of them), and then count individuals based on the fraction of income "hidden" as non-W2 income, and sum them up, then that number is surely greater than 5.
Not a statically significant portion of the 17M employed Californians mind you, but more than 5.
I honestly think it is a mistake to allow grandfathered NEM rate structures to continue, if these other wacky plans are really attempting to compensate for that imbalance.
Maybe we need better than the NEM 3 proposal, to actually charge based on your grid connection size and usage. Something based on peak and actual power transfers as they reflect proportionate reliance on the grid infrastructure.That would be in addition to any actual energy consumption which I think should also follow the NEM 3 plan with retail rates for consumption and wholesale rates for production that vary by time of delivery.
You're not paying that in Florida.
Here in Boston, my rate is $0.14479/Kwh for delivery with a $0.33891/kWh supply charge, or $0.4837 per kWh. Yep, higher than you're paying. That excludes a fixed standing charge of $7/mo. About 53% of our base load (IIRC) is natural gas, so when natural gas wholesale prices spiked, so did our rates by 80+ percent back in October 2022.
My electric bill nearly doubled over the course of 6 weeks. I'm fortunate that over the years I had always driven my power consumption into the ground. Certainly paid off. Back in 2017, the rate was legitimately under half what I paid now.
Again, I believe there might be some parts of CA where the delivery+supply rate might be approaching $0.60/kWh at some points in time, but it'll be location dependent.
Here's my most recent bill detail FWIW
Access Charge $27.00
Energy Charge 1,000 kWh @ 0.0725 $72.50
Energy Charge 725 kWh @ 0.0913 $66.19
Power Cost Adjustment 1,725 kWh @ 0.0465 $80.21
Subdivision Lighting Large $2.80
Light PCA $0.37
FLA Gross Receipts Tax $6.38
Florida State Sales Tax $0.23
County Sales Tax $0.05
Operation Round Up $0.91
Total Current Charges for this Location $256.64https://www.heritage.org/taxes/commentary/1-chart-how-much-t...
Computer programmers in particular might be forgiven for incredulity of these tax systems, but here we are in 2023.
It would cost me about twice that to upgrade my current solar and battery for 100% off grid. ($10K would go to a backup generator that we need anyway because PG&E pulls about 1 nine of reliability around here).
So, if this proposal passes, I’ll strongly consider just not paying for electrical service anymore. I suspect most high income houses will be looking at similar numbers as the cost of solar plus battery continues to drop.
This will only accelerate California’s power grid death spiral.
Edit: They should make the variable part of your electric bill proportional to carbon footprint (negative bills for net negative housholds), and legalize community net metering. This would allow poor people to buy into non-profits that lower their bills, so they could benefit economically form solar panels, just like rich people do. Also, this would even more rapidly decarbonize California’s power grid.
They could make it revenue neutral for PG&E by raising the base rate for interconnect, by giving PG&E cap and trade credits, or by giving individuals the cap and trade credits in lieu of a discount off their bills.