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  • Writer's pictureKate

California utility companies propose charging residents based on household incomes

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In California, three major utility companies are seeking to restructure their billing system, which would involve charging customers based on their income. Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric have jointly proposed a new plan that would introduce a flat-rate charge based on income, in addition to a reduced usage charge based on consumption.

The plan would divide monthly bills into two parts, with a fixed-income rate and a consumption-based rate. Under the proposal, low-income households could be charged as little as $15 per month, while high-income households earning over $180,000 annually could be charged up to an additional $85 per month. Although this would result in higher costs for some customers, the actual electricity rate would decrease by a third. Customers may be able to lower their bills by reducing their electricity use.

This income-based billing system is in compliance with California state government legislation passed last year that mandates such plans for utilities. The proposal must be approved by the California Public Utilities Commission, which is expected to make a final decision by mid-2024. If approved, the fixed rate could be implemented as early as 2025.

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