Electric power customers typically pay more if they use more. Under a new law, customers of California’s three largest private utilities will be charged a fixed fee based on their incomes, not just how much power they use. The chief motivation behind this scheme is to provide some relief to low-income customers who are being hammered by escalating electricity rates as the Golden State transitions from fossil fuels to wind and solar power.
The average cost of electricity to residential customers in California is now $0.27 per kilowatt-hour (kWh). The U.S. average is around $0.16 per kWh. The state’s three big private utilities are proposing to the California Public Utilities Commission to add Income Graduated Fixed Charges (IGFCs) to all of their residential rate schedules. The idea is to pay for the various fixed costs, including those associated with connecting customers to their grids, billing, and meter reading. In addition, they want the fixed fee to cover “the costs of wildfire mitigation and vegetation management, reliability improvements, safety and risk management distribution costs, ongoing distribution operations and maintenance, many regulatory balancing accounts, and various programs and policy mandates through its distribution rates.”
Hellbound and Down 