The California Public Utilities Commission has released a “flat-rate” pricing proposal that would reduce electricity bills for many Californians while also advancing the state’s clean energy goals.
Under the proposed flat-rate pricing plan required by Assembly Bill 205, utilities would charge customers $24.15 per month for maintenance of the electric grid and reduce rates for electricity actually used by 5 to 7 cents per kilowatt hour.
“This billing structure does not impose any new fees, nor does it generate new profit for utilities — it simply reallocates how existing costs are shared among customers,” the agency said after releasing the plan late last week.
The CPUC said all customers would see financial benefits, estimating savings of $28 to $44 per month for family with an electric vehicle.
The proposed flat rate is lower than major utilities have proposed, and would not vary with a customer’s income, a possibility that was under consideration but opposed by Republicans in the Legislature.
“This change would shrink the price for a unit of electricity for all customers, making it more affordable to electrify homes and vehicles, regardless of income or where you live,” according to a fact sheet on the plan.
Customers enrolled in the California Alternate Rates for Energy (CARE) low-income assistance program would be eligible for a discounted flat rate of $6 per month, and other income-based discounts would be offered.
If ultimately approved, the new billing structure would go into effect in late 2025 and early 2026.
The new structure is designed to protect investment in the grid — the wires, transformers and related equipment that distribute electricity to all homes and businesses — as an increasing number of customers install rooftop solar.
“Rooftop solar customers consistently rely on grid infrastructure,” the agency noted. “They draw electricity from the grid and send electricity back to the grid throughout the day to balance their usage with intermittent solar production.”
The Predictable Power Coalition, which includes San Diego Gas & Electric as well as many community groups and labor unions, said it approved of the CPUC plan.
“A fixed charge is vital to ensuring equity on our path to a clean energy future for all. The proposed decision is a step in the right direction, and we look forward to continuing the conversation,” the coalition said.
A vote on the flat-rate plan by the agency’s board of commissioners is scheduled for May 9.
Editor’s Note: An earlier version of this article incorrectly reported that the new rate would be 5 to 7 cents per kilowatt hour, instead of a reduction of that amount. This has been corrected. We apologize for the error.
