SACRAMENTO – Across California, more than 240 community organizations and leaders are joining together in the Stop the Big Utility Tax coalition to fight a proposal that would hike electricity bills for millions of working– and middle–class families in the state.
The coalition includes affordable housing proponents, tenants rights groups, consumer advocates, labor, environmental justice leaders, conservationists, clean energy advocates, community and faith leaders, educators, local elected officials, and many others.
The groups are urging state legislators and Gov. Gavin Newsom to reject the tax, which was devised by the state’s three major utilities: Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.
Late in the legislative process the tax was slipped into a 2022 law, A.B. 205, authorizing the California Public Utilities Commission, or CPUC, to add a fixed charge to electricity bills based on household income. It also eliminated “the cap on the amount of the fixed charge that the PUC may authorize. A.B. 205 passed after just three days, without any public hearings or floor debate.
As a result, the state’s big utilities and other groups are proposing fixed charges between $30 to $70 per month, three to seven times the national average. Even at the low end, imposing a $30 monthly fixed charge would increase the utility bills for millions of families who already struggle under the highest electricity bills in the country.
All PG&E, SDG&E, SCE, and community choice aggregation residential customers — except for California Alternate Rates for Energy, or CARE, and Family Electric Rate Assistance or FERA, customers — will have to pay this tax, and it cannot be reduced or avoided, no matter how little energy a household uses.
“California has long taught consumers they can ‘flex their power’ to save money on electricity bills and help the grid,” said Joe Desmond, executive director of the California Energy Efficiency and Demand Management Council.
“The current CPUC effort to increase monthly fixed charges would undermine consumer control over energy bills. The agency's own research shows that 95 percent of all residential customers look at the 'total bill' when considering ways to save money. With electric rates at all time highs, and more increases coming, energy efficiency is the first line of defense — regardless of power use,” he said.
“If you look at the details, the proposed monthly fixed charges will increase the energy bills on millions of working– and middle–class families, including many retirees on fixed incomes my organization advocates for,” said Hene Kelly, a retired teacher and vice president of the California Alliance for Retired Americans.
“A retired teacher renting in Fresno who takes steps to conserve energy year round as a way to lower their expenses stands to see their overall electricity bill go up every month, and there’s nothing they can do about it — which is egregious,” said Kelly.
While CARE and FERA customers will see relatively small and temporary bill decreases, millions of low–income households above the cutoff for these programs will see bill increases, as will millions of Californians who do not use a lot of electricity because they live in an apartment or small home, conserve energy, have energy efficient homes, or have solar.
“PG&E and other utilities are touting their proposal is fiscally equitable for their low–income customers, but don’t be fooled,” said Esperanza Vielma, executive director of Environmental Justice Coalition for Water. “The proposed utility tax is not a progressive tax when it raises bills on millions of working– and middle–class families.”
“As written, there is no cap to how high big utilities can raise the tax; not to mention PG&E raised their electricity rates 13 percent this year, and it’s only going to go up,” said Vielma.
An in–depth analysis and survey by Flagstaff Research found several false claims made by PG&E and other utility tax proponents. Contrary to their claims, the utility tax will discourage consumers to switch from gas to electric, making them less likely to install electric appliances or buy electric cars. It would also discourage any form of energy conservation because the utility tax reduces the ability of consumers to control their electricity bills.
“The new set fee system proposed by utilities would increase bills on millions of Californians, incentivize energy waste and punish those of us committed to energy conservation and efficiency,” said Jenn Engstrom, state director for CALPIRG. “This not only diminishes consumer control over energy bills, but a system that incentivizes high energy consumption could increase costs on the entire system and lead to higher electricity bills for everyone.”
“The CPUC's subservience to the state’s investor-owned power companies is glaringly evident and without any accountability from our elected leaders in Sacramento who put this utility tax scheme in motion to begin with,” said Environmental Working Group President and Bay Area resident Ken Cook.
“It's imperative that the legislature and Gov. Newsom promptly correct this misstep and alleviate the burden on millions of hardworking families already grappling with exorbitant electricity bills that will only soar higher by this unjustifiable utility tax,” said Cook.
Since A.B. 205 passed, hundreds of grassroots organizations and community leaders are uniting to oppose the utility tax. Because of constituent opposition, state legislators introduced A.B. 1999 to repeal the utility tax provision and restore the commonsense $10 monthly cap.
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