California Officials May Overturn Controversial Fixed Charge for Electricity

By: Stephanie Bontorin | Published: May 16, 2024

A state assembly committee recently voted to advance a new bill requiring a comprehensive review of California’s controversial monthly fixed electricity charge.

On Wednesday, lawmakers made a ruling that may reverse the monthly fixed charge on electricity bills for all homeowners in the state, effectively undoing Governor Gavin Newsom’s 2022 bill.

The Public Utilities Commission Approved the Charge Last Month

Last month, the Public Utilities Commission, comprised of workers appointed by Gov. Newsom, approved an additional charge for all California homeowners.

Two rows of large electricity towers going up the side of a small mountain

Source: @nettermike/X

The $24.15 flat monthly fee guarantees that each customer will get a lower rate for each kilowatt hour of power used. However, opponents of the measure say that most state residents will wind up paying more each month.

Encouraging Customers To Buy Electric Vehicles

Government officials noted that the new billing structure was needed to push state residents to buy electric cars and replace old gas appliances in their homes.

A silver car parked on the street is hooked up to an electric charging port

Source: Ernest Ojeh/Unsplash

The Newsom government’s overarching goal is to reduce fossil fuel use. Emissions from oil and gas have been linked to global warming. In the near future, extreme heat and harsh hurricane seasons are expected to displace millions of Americans, and Newsom plans to be at the forefront of stopping these issues.

Consumer Groups Have Protested the New Monthly Charge

Over 250 consumer groups have created a coalition to protest the new monthly charge. Critics of the new ruling say that the change will cause bills to skyrocket for the poorest in the state.

A large blue and orange apartment building with several small balconies

Source: Brandon Griggs/Unsplash

Those in apartments and small homes who use less electricity than a large house will see their bills increase substantially.

Members of the Commission Agree More Discussion Was Needed

Now that the public is up in arms against the charges brought by the Newsom government, the Public Utilities Commission said on Wednesday that more discussion should have taken place before the charge was quietly approved in 2022.

Governor Gavin Newsom speaking energetically at an outdoor event, wearing a casual jacket and a baseball cap

Source: CAgovernor/X

After Newsom proposed the plans to change the pricing method for electricity, it passed within days without any public discussion.

Big Electricity Companies Backed the Bill

Now that the public has more information on the fixed fee, more information has come to light.

A large power company with five massive cement stacks emitting grey smoke

Source: Jason Mavrommatis/Unsplash

Opponents of the fee say that the big electricity companies that backed the bill will gain substantially off the backs of poor Americans.


Massive Companies on the Receiving End

PG&E, Southern California Edison, and San Diego Gas & Electric are the major electric companies in the state that are said to profit from the new fixed fee in the millions.

The exterior of a large stone building with an American and a Californian flag on the turret

Source: Visitor7/Wikipedia Commons

Larger homes that use more energy will save money on the price scheme, while small homes and apartments will pay even more. Most residents of apartment buildings or heavily populated areas will not have access to charging ports for electric cars and will not have the option to switch.


State Lawmakers Are Attempting To Undo the Charge

Jacqui Irwin, a Democratic leader based in Thousand Oaks, presented a new measure to undo most of Newsom’s 2022 bill that was responsible for the charge.

A woman wearing a white dress and large black sunglasses presents an oversized check to a group of state rangers standing in the wilderness

Source: @G_InTheCity/X

When she brought the bill to an Assembly in January, the committee stopped her from being heard. She pledges to continue trying to have her bill heard in council chambers.


Irwin’s Bill Asking for Clear Financial Studies

Her bill focuses on exposing the truth behind the accuracy of the charge.

A woman with strawberry blond hair wearing a black and white jacket stands at a podium for California Moves

Source: @CaMovesOrg/X

She suggests a comprehensive study in 2028 to see who pays more or less under the $24 fixed-rate charge. Her bill intends to discover the law’s consequences and notes that lawmakers can decide whether to keep the charge.


Coalition Agrees That Electric Companies Stand To Gain

The coalition for consumer rights says that the electric companies will gain a massive windfall. Newsom’s bill eliminated a $10 cap on fixed charges that was in place since 2013.

Three rows of large electricity towers with thick black wires move down the landscape into a sunset

Source: Matthew Henry/Unsplash

Now, the biggest companies have the most to gain from the smallest consumers, who do not have access to or options to reduce gas consumption in their homes or to switch to electric vehicles.


More Oversight Is Needed on the Decision

Irwin said during an assembly on Wednesday that the legislature needs to be reviewed more comprehensively.

A close up view of a black electricity tower with several black wires running through

Source: Alexander Schimmeck/Unsplash

The utility commission, which stands to make millions from the new fixed charge, should not decide on the charge.


Fixed Charges Will Take Effect Soon

The flat fee of $24.15 is set to take effect across the state in late 2025.

A woman's hands holding bills

Source: Chanhee Lee/Unsplash

Customer advocate groups are expected to continue fighting the proposed change and hope to eliminate it before becoming incorporated into monthly bills.