Sacramento Bee
California’s energy agency and regulator have released their recommendations for how the state can lower customers’ electricity rates and make utility bills more affordable.
In its report, released Tuesday, the California Public Utility Commission recommends lowering the burden on customers who subsidize programs for low-income households and for solar panel owners by finding alternate funding sources for these programs.
“Inequitable rate structures and the need for unprecedented climate impact related investments have created a perfect storm driving electricity rate increases,” the authors wrote.
For example, the CPUC reports that 21-27% of ratepayers’ bills pay for programs that benefit solar panel owners. The commission recommends the state find other sources to pay for the programs, which could lower most customers’ bills by over 15%.
Among the recommendations in its report, the California Energy Commission highlights a possible refund of approximately $200 million to ratepayers, due to the availability of Proposition 2 and local bond measure funding.
“I think that over the last kind of 10 or 20 years, rates have almost become something of a slush fund,” said Assembly member Cottie Petrie-Norris, D-Irvine, who leads the Assembly Utilities and Energy Committee. “So, if somebody had an idea, you didn’t have to fight for a General Fund allocation, you didn’t have to fight for a GGRF (Greenhouse Gas Reduction Fund) allocation, you could just kind of stick it into rates.”
She says over 300 programs are currently funded by ratepayers.
“No one’s ever done a look back and asked, you know, what’s working, what’s not, are we spending these dollars effectively?” she said.
The reports are in response to an executive order filed by Gov. Gavin Newsom last fall that sought to identify areas of cost-cutting related to state programs.
“California is proving that we can address affordability concerns as we continue our world-leading efforts to combat the climate crisis,” he said.
On Monday, a KCRA investigation found the Governor’s Office refused to release the reports last month, claiming the records were privileged information under state law. Shortly thereafter, they were told the agencies would be releasing the reports the next day.
Daniel Villaseñor, a spokesman for Newsom, said the office appreciates the responses from the agencies, and the reports provide good options for consideration.
“The Governor looks forward to exploring these and other ideas in more depth and working with the Legislature to take meaningful action on electric affordability,” he said.
The state’s Legislative Analyst’s Office released a comprehensive analysis last month that gave some reasons why California has become the state with the second-highest residential electricity rates after Hawaii. The report showed average California rates are more than 30 cents per kilowatt-hour, which is close to double the national average.
Rates are particularly high for customers of the three largest investor-owned utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric. Customers of publicly owned utilities in the state pay closer to the national average.
The legislative analyst found that “significant and increasing wildfire‑related costs, the state’s ambitious greenhouse gas reduction programs and policies, and differences in utility operational structures and services territories,” were the chief reasons prices were high, and increasing.
Petrie-Norris said a series of four affordability hearings scheduled for this year in the Assembly Utilities and Energy Committee will attempt to lower costs for families and stabilize utility rates.