Electricity Bills Could Depend On Income Level

California will become the first state in 2025 to determine a resident’s electricity fees based on how much they make a year. 

This comes in an effort to help bring down the Golden State’s soaring electricity costs for low income Californian’s. 

The law is also part of the state’s efforts to transition away from carbon as an energy source, but not everyone is welcoming the new move. 

The times where electricity bills were dependent on how much a household uses electricity may come to an end.

This only applies to specific providers.

The providers in question, investor owned companies, like Southern California Edison, Pacific Gas and Electric, and San Diego Gas and Electric.

According to SCE, this fixed charged proposal is a restructuring of the electric bill, as of now, there are fixed costs and electricity costs, combined on the average bill.

“The new law that was passed AB 205, it requires these costs to be separated, so there would be one monthly fixed charge based on a household income level, and another charge based on a customer’s energy used in that billing cycle.” Gabriela Ornelas, the Media Relations Advisor for Southern California Edison says. 

Customers would continue to pay for energy used.

This change is to provide support to those who may be struggling to pay their bills, on average low-income customers would receive a bill reduction of about 16 to 21%.

Reviews for this new law passed, are mixed.

“I am not in favor of them charging based on people’s income, because that’s just simply not fair. I’m retired, I’m on a fixed income and it just doesn’t work. It would affect everything.” says David Witzke, a Coachella Valley resident. 

Affecting day-to-day lives for some residents.

“I mean, the amount of air conditioning, especially in the summertime, I wouldn’t be able to stay here in the summertime, you know, based on that kind of stuff, if they started doing that.” Witzke says.

Others find this law helpful, considering how expensive electricity bills already are. 

“I think it would be great if electricity was on people’s income because people can’t even afford their electricity right now. The bills are $900 a month during the summer. Who can afford that?” Another Coachella Valley resident says.

This new plan could provide transparency for customers, with the fixed charges acting as a form of consistency for users in their monthly bill.

“The purpose of the fixed charge proposal is to help make electricity affordable for all our customers. We understand that customers are not just struggling with their electric bill but we know prices and other industries have also gone up.” Ornelas says.

Utility customers would not see any changes in billing until 2025 at the earliest, with a final decision expected from the California Public Utilities Commission in mid 2024.