Utility Tax Proposal is a Deceptive Profit Grab Disguised as Equity

Working California families to pay more to subsidize lower bills for wealthier large energy users.

Stockton, CA – New research shows the "fixed rate fee structure" proposed by utilities, and their political allies would impose the highest utility tax in the nation, increasing monthly utility bills for millions of California's working families. The recent proposals – between three to five times the national average – will force California consumers to pay a fixed monthly before using even one watt of electricity while still paying high volumetric rates. Despite Californians' progressive politics, consumers are still forced to pay the highest electricity bills in the United States. The California Public Utilities Commission (CPUC) is reviewing the fixed charge in response to a new law (AB 205) adopted–at the last minute and without public input–by the California Legislature in 2022.

The monopoly utilities (PG&E, SCE, & SDG&E) and their political allies are trying to convince policymakers and CPUC commissioners that since this utility tax will be income-based, it will favor working people. However, a new analysis released by the Clean Coalition refutes that claim, showing that bills would go up by as much as $500 to $1,000 per year for millions of Californians working families who live in apartments, condos, duplexes and other homes that use less electricity. On the other hand, the largest electricity users, who tend to be the wealthiest Californians, will see their bills go down by as much as $1,500 per year. "This is yet another example of utilities weaponizing equity to increase their profits," said Environmental Justice Coalition for Water Executive Director Esperanza Vielma. "We will not be fooled by their attempts to use environmental justice communities as cover."

The Clean Coalition study also found that the utility tax proposals won't actually incentivize electrification as the utilities claim. Large energy users will see their bills decrease even if they don't invest in electric appliances such as heat pumps and induction stoves. The Clean Coalition also found that even with slightly reduced volumetric rates, ratepayers would still see their bills increase if they went all-electric. "Our communities will be made stronger by an energy transition that produces affordable clean energy," said Pastor Ambrose Carrol, Executive Director of Green the Church. "That makes our air cleaner and families' monthly will less. A fixed-rate proposal that rewards electricity consumption will significantly harm that future and thus contradicts our Green values."

These unjust fixed fee proposals came from the fast-tracked Assembly Bill 205, an omnibus budget trailer bill that covered many topics in energy passed by California lawmakers last year and signed into law by Governor Gavin Newsom. The fixed charge provision was introduced just 72 hours before it was voted upon, with no public awareness, hearings, or debate. The CPUC is expected to make a final decision in this proceeding in June 2024.

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About CEEE

The Coalition for Environmental Equity and Economics (CEEE) is a coalition of three powerful environmental justice groups in California. Together, Green the Church, Environmental Justice Coalition for Water, and the Federation of Clubs and Associations Mexicanos in North America (COFEM) believe in and advocate for community power-building, environmental and economic justice, social equity, and energy democracy. When wall street utilities weaponize economic and social equity issues to manipulate public sentiment, we speak truth to power. Learn more at ceeetruth.org.