CA Electric would be much cheaper without government fees

By Ahmad Holmes and Pat Fong Kushida, especially for CalMatters

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Reliable electricity is an essential part of our lives, so making it affordable should be a top priority for California’s elected officials. Unfortunately, lawmakers continue to introduce proposals that worsen the affordability crisis.

And they refuse to consider a change that could quickly cut the average customer’s annual bill by hundreds of dollars: eliminating mandatory surcharges that have nothing to do with the electricity they use.

A study published last summer found this fees add nearly 37% to the average Californian’s electric bill. In addition to paying for electricity generation and delivery to households, electricity customers foot the bill for a set of hidden “public utility” programs and government mandates. Clients who derive their power from investor ownership utilities such as Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric pay about $820 a year for these programs.

Examples of these surcharges include roof subsidies sunnybill rebates for low-income customers, energy efficiency programs, school air conditioning and plumbing upgrades, and statewide forest and tree management.

The goals of these mandates may be noble, but the method of funding them is regressive. Simply put, it is unfair and unjust to make some electricity customers pay for programs that benefit society as a whole and are largely unrelated to the cost of providing electric service. In many other countries, people pay for these items through their taxes, not through their utility bills.

Nowhere is this unfairness more evident than in government subsidies for rooftop solar. For years, wealthier homeowners have installed solar on their roofs to lower their electricity bills, while costs are quietly passed on on everyone else.

Utilities are required to pay solar households for the excess power they send to the grid. They spread the cost of these payments across everyone else’s electricity bills. Meanwhile, solar customers pay far less to maintain the grid they all rely on. The result is higher electric bills for renters, lower-income families and others who can’t afford solar.

According to another study by the California Public Advocates Office—a consumer agency of the California Public Utilities Commission—customers without paying for rooftop solar more than $8.5 billion each year on their electricity bills to subsidize customers with rooftop solar systems. That adds about $440 a year, or 20%, to the bill of each non-solar customer, hitting low-income families, seniors and renters the hardest.

For Latino, black, and Asian American communities, it disproportionately affects renters, residents of high-rise buildings where rooftop solar isn’t an option, and customers who can’t afford to install solar. As a result, families who already pay a large portion of their income for housing and utilities are forced to cover someone else’s solar subsidy.

California lawmakers must face these realities. Too many of their policies are making things worse, jeopardizing the reliability of the electric system and ultimately driving up customers’ electricity bills. If lawmakers want to get serious about affordability, they should start by reducing costly mandates and reducing electric bills.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.