California’s energy rate structure is at stake during this state legislative session. Assembly Bill 327, sponsored by Assemblymember Henry Perea (D-Fresno), would allow the Public Utilities Commission to create a more equitable rate structure.
Perea and staff made clear what the provisions of AB 327 lay out for energy rates in California:
- AB 327 will not increase residential electric rates. It will simply remove the energy crisis-era rate restrictions that currently limit the California Public Utilities Commission (CPUC) from adopting a new, fair, and equitable rate structure.
- AB 327 does not mandate a permanent annual fee of $120 for solar users. Instead, it requires the CPUC to cap any fixed charge that it may establish at $10 for all customers and $5 for low income customers.
- Increases the CARE discount to 30-35% to protect our low-income constituents.
California currently has a tiered rate structure that is not based on income. Rates for tiers 1 and 2 consumers are capped and cannot go beyond 30 percent of the baseline rate. Any increase on energy prices must be shifted to tier 3 and 4 consumers, some who are small business owners or middle class families.
San Diego Gas & Electric outlines the current rate structure:
AB 327 has garnered a lot of attention and there has been competing petition campaigns. Environment California opposes the bill stating that it’ll hurt a move towards solar energy. Their main concern is the potential for the fee on solar users, but as stated by Asm. Perea, it is not mandatory.
Environment California states:
“Given the urgency of meeting the state’s clean energy goals and the immediate clean air and job benefits of investing in solar power and energy efficiency, it is critical that California policymakers act to expand–rather the constrain–California’s solar market.”
The petition campaign in support of AB 327, titled Fix My Energy Bill, has obtained over 10,000 signatures. Key points made by the petition are:
Energy Costs Are Rising; New taxes, clean energy mandates and inflation makes energy production more expensive.
We Have an Outdated Rate Structure; Because of a 12 year-old bill, you have to pay the full cost of the price increases, while others don’t.
The Current System is Unsustainable; Families, seniors, and small businesses are penalized and pay more than their fair share.
AB 327 is not in its final form as of now and has been recently amended. Asm. Perea stated, “I am still working closely with all organizations, including consumer groups, to reach the best compromise possible. The bill will change from its current form as a result of ongoing negotiations.”
All bills circulating the legislature needs to be passed in both chambers in Sacramento by September 13. Governor Jerry Brown will then sign or veto legislation that makes it to his desk.