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New monthly charge part of utility’s long-range plan
Lower prices?

If you charge an electric vehicle and run your air conditioner extensively, your PG&E bill could go down.

But if you’re frugal with electricity use and currently have a minimal bill or have a rooftop solar power there’s a good chance you will be sending more money each month to the utility company.

It is the direct result of a California Public Utilities Commission decision this month to allow for-profit utilities such as PG&E to charge a fixed monthly rate for installing and maintaining power lines and associated equipment.

Currently, those costs are collapsed into the per kilowatt hour charged by PG&E.

The directive for the CPUC to alter how electric bills are calculated was tucked in a trailer bill that was added to a major state budget bill that was passed by the legislature and signed into law by Gov. Gavin Newsom in 2022.

The intent was to make electric charges more “income equitable.”

The charges approved for PG&E and others are supposed to have been designed in a manner that overall revenue connected with the change per se won’t go up although many will pay more and many will pay less.

That works in theory, but if more people are encouraged to buy EVs or other electrical appliances such as stoves, dryers, and heating systems to replace those using natural gas versions — a stated goal of Sacramento legislators and policymakers — PG&E will make more money.

Here’s how the billing change targeted to be put in place in late 2025 will work:

*Most will see a $24.15 per month charge added to their PG&E electric bills.

*Those in low-income enrolled in one of two discount programs will see a $6 or $12 charge added to their monthly bills. That will be determined by household income and potentially the number of people in the household.

*At the same time, the per kilowatt hour price of electricity will drop by between 5 cents and 7 cents.

If you are trying to determine what that might mean to the bottom line of your PG&E bill based on historic usage for the past 12 months, good luck.

That’s because the average PG&E rate is 45 cents per kilowatt hour.

But the per kilowatt hour actually ranges from 34 to 72 cents depending on the rate schedule — there are three that apply to residential users based on monthly usage — as well as the season and time of day.

For example, your current PG&E bill reflects a switch from winter to summer rates so there are two separate listings for P&E electric charges as the switch was made last month.

Those charges also reflect higher rates during peak power use times.

Depending upon which plan you picked — or were defaulted into because you didn’t choose one — your per kilowatt charges are higher either every day from 4 p.m. to 9 p.m., weekdays from 5 p.m. to 8 p.m., or weekdays from 4 p.m. to 9 p.m.

During the remaining hours of each of the three options, power is cheaper. The more hours you chose to be penalized at a higher price for power use, the lower the off-peak charges are.

You will pay for that, all of the costs noted on your current PG&E bill, plus – for most people – the new $24.15 charge coming next year.

How the CPUC got to the point it did to change billing has everything to do with the fact the state is no longer pushing for residents to conserve electricity.

The state now gets most of its energy from things like solar panels and wind turbines as opposed to fossil. As such, the state has a surplus of electricity.

“We’re at a time now when our climate goals are not met by necessarily using less electricity. We need to start using more electricity overall,” said Alice Reynolds, president of the California Public Utilities Commission.

The current billing structure was designed to encourage energy conservation.

However, 49 percent of PG&E power comes from the Diablo Canyon nuclear power plant that the state is in the process of extending its life for another five years because there isn’t enough wind and solar power to replace it plus meet the growing demand of electricity for everything from EVs to converting homes to all electrical appliances and heating.

Diablo accounts for 10 percent of the state’s overall power.

Besides benefitting people with EVs by paying less to charge their batteries, the CPUC believes the new charge will help people in areas such as the Northern San Joaquin Valley where summer temps often exceed 100 degrees to save upwards of $33 running their air conditioners during the summer.

Using more electricity in recent years has strained the state’s supply.

In the summer of 2020, demand for electricity was so high that the officials had to order rolling blackouts to make sure the state didn’t run out of energy.

State officials have urged people to conserve energy during peak hours, between 4 p.m. and 9 p.m. when energy from solar is less abundant. Opponents worry the new CPUC order, by lowering the price for electricity, will discourage people from doing that.

“If you wanted to design a policy instrument that would send the signal that conservation doesn’t count, this would be it,” said Ken Cook, president of the Environmental Working Group.

The legislature may be moving to undo the change they put in motion.

Last week, an amendment to proposed legislation was made in a bid to cap the fixed charge to a maximum of $10 beginning in 2028 as opposed to the $24.15 that was approved and is now moving forward.

A $10 charge is more in line with what investor-owned utilities in other states charge for a similar fixed rate for installing and maintaining power lines and associated equipment.

The CPUC decision was much lower than the $53 and $71 per month charge the state’s for-profit utilities requested.