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California lawmakers backpedal on new electricity rates rule based on customer income

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Leroy N. Soetoro

Feb 6, 2024, 5:08:05 PMFeb 6

A group of Democratic state lawmakers on Tuesday announced an effort to
roll back a rule that requires the state's major utility companies to set
all electricity and gas rates based on customer income instead of energy

That same group of lawmakers is part of the reason why the rule is in
motion in the first place. California's Democratic-led Legislature passed
Assembly Bill 205 in 2022, which among many things, directed the
California Public Utilities Commission to authorize the income-based
charges by July of this year. The purpose of the rule change was to lower
the overall average monthly bills for low-income customers.

"AB 205 should have had a very robust conversation," said Assemblymember
Jacqui Irwin, D-Thousand Oaks.

Irwin noted the legislation was part of a budget trailer bill, which is a
mechanism the legislature and governor use to quickly pass new laws on a
fast-tracked timeline with little to no public discussion. She believes
having this be part of a huge trailer bill was not appropriate.

Video of AB 205's debate on the Assembly floor on June 29 of 2022 shows no
mention of the rule, but lawmakers noted the bill was a last-minute push
by Gov. Newsom's administration. "This is a crappy budget trailer bill
that was dumped on us late Sunday," Democratic Assemblyman Al Muratsuchi
said in the clip. "In the words of Marshawn Lynch, 'I'm only here so I
don't get fined'." The Assembly went on to pass it 64-13 on a party line

Tuesday's announcement included lawmakers that mostly represent coastal
districts. They said they've heard repeatedly from constituents who are
worried about increased costs and privacy issues.

Irwin on Tuesday filed a bill that repeals pieces of AB 205. The CPUC is
still in the process of analyzing rate design proposals, which Irwin said
could reach up to $125 a month for some customers.

Utilities already set discounted rates for lower-income Californians
through the California Alternate Rates for Energy (CARE) program. Irwin
said the bill would allow the CPUC to establish a fixed fee of $5 for
those customers and $10 for other low-income customers not enrolled in the

"Quite frankly, we're upset," said Zach MacQuarrie, a spokesman for the
Predictable Power Coalition, which supports AB 205 and what's known as the
graduated income fixed charge rule. "These folks voted for the legislation
and now they want to take this immediate financial relief away from these

Terrie Prosper, a spokesman for the CPUC, said because customers can
expect a flat rate from their utility companies, the "usage rate" is
expected to go down. Prosper noted the implementation of AB 205 was a
critical step toward California's climate goals because a lower usage rate
will mean lower costs for consumers to charge an electric vehicle or run
an electric heat pump, technologies he noted are needed to move away from
the state's reliance on oil and gas.

"The Governor is aware that the Public Utilities Commission is working
diligently with dozens of stakeholders in its public decision-making
process, and he looks forward to seeing a Commission proposal that is
consistent with AB 205 when it is released," said Alex Stack, a spokesman
for Gov. Gavin Newsom's office. “California must combat climate change by
rapidly expanding the use of clean electricity in our vehicles and
buildings, while at the same time making it more affordable for low-income

Republican Assemblyman Josh Hoover told KCRA 3 he has been considering
filing a similar proposal to Irwin's but is worried hers does not go far
enough to protect Californians from high costs.

"It still allows for increases based on inflation and things like that.
Whether this is the perfect approach, I don't know yet," Hoover said. "I
think action has to be taken and the question is, what is the best way to
do that?"

Irwin said she's hoping to have an urgency clause added to the bill that
would allow the repeal to go into effect immediately with the governor's
approval. A hearing for the measure is not yet scheduled.

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