Dem lawmakers, citing public outcry, want to reverse policy to charge electricity by income rather than usage
(Mario Tama/Getty Images)
California governor Gavin Newsom is standing by the state’s soon-to-be-implemented “equitable” policy to base electricity bills on income, rather than usage, even as public and political opposition to the idea builds in the Democratic coalition.
A spokesman for the governor said on Tuesday that Newsom is looking forward to seeing a final proposal from the state’s utilities commission “that is consistent with” the 2022 law that required the agency to devise an income-based billing system.
“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 Californians,” the spokesman said in a statement.
Newsom’s commitment to California’s income-based electricity billing plan followed a press conference by a group of Democratic lawmakers who want to reverse the policy, after they voted in its favor as part of a 2022 budget bill. Citing public outcry, they condemned the plan as another price hike for Californians’ astronomical energy bills that would punish conservation-minded households while also subjecting everyone to invasive income checks.
“Californians are fed up. My constituents are pissed off,” Democratic assemblyman Marc Berman said at a Tuesday presser. “I know because they told me over and over again at every community coffee that I had in the fall and winter. Their rates keep going up.”
This emerging rift over a policy that’s been praised by supporters as an “equitable” boost for the state’s transition to zero-emission electricity is a rare hiccup in the Democratic supermajority’s typically lockstep approach to energy mandates. Opponents include tenants’ advocates, who say the extra fees will add to renters’ already sky-high living costs, environmental groups, and even supporters of solar energy. Other powerful environmental groups, including the Natural Resources Defense Council, support the income-based system.
The growing public pressure over the issue may signal that Californians, a majority of whom said last year that environmental regulations are worth the cost, have hit a limit to their tolerance for Sacramento’s energy policies. Electricity rates have risen nearly 70 percent since 2010, when the state started to break from fossil fuels, and California households pay nearly 83 percent more than the average for homes elsewhere in the United States.
“Newsom and the public utilities commission hide behind environmentalist values to justify imposing an unfair burden on any Californian who doesn’t qualify for subsidies—and in fact makes it more expensive for everyone else,” said Edward Ring, cofounder of the California Policy Center.
The state’s utilities commission has yet to decide how much the income-based fee would be determined. The latest proposals vary between an extra $30 to $50 per month for Californians who aren’t poor enough to qualify for subsidies. Utility companies initially pitched charges of up to $128 for higher-income households, but walked those back after public outcry. The agency, an unelected body of regulators, is tasked with settling on a final fee and implementing it by summer.
Jenn Engstrom, the state director of the California Public Interest Research Group, which opposes the income-based fee system, warned of its added costs for Californians and said it would “punish those of us committed to energy conservation and efficiency.”
“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,” Engstrom said.
Terrie Prosper, director of news and outreach for the state’s utility commission, defended the plan as a “critical step toward our climate goals” because electric vehicle owners will end up paying less to charge their cars and Californians can more cheaply use electric heat pumps to warm their homes.
The agency is “analyzing all the proposals as well as other evidence in this proceeding to make sure that implementation of [the law] will equitably distribute costs and facilitate the achievement of our state’s clean energy and climate goals,” Prosper said.
What are the main concerns regarding the implementation of invasive income checks to determine income tiers in the income-based billing plan?
Ryone,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association, a group that has been critical of the income-based billing plan. “Californians shouldn’t have to choose between protecting the environment and being able to afford their energy bills.”
The plan, which is set to go into effect in February 2023, would divide Californians into three income tiers and charge them accordingly for their electricity usage. The goal of the policy is to make electricity more affordable for low-income households while encouraging conservation among higher-income households. However, opponents argue that the plan is unfair and will lead to higher bills for many Californians.
One of the main concerns is the implementation of invasive income checks to determine which tier each household falls into. Critics argue that this is an unnecessary invasion of privacy and will place an additional burden on households already struggling to make ends meet. In addition, tenants’ advocates argue that the extra fees will further increase the already high cost of living for renters.
Even supporters of renewable energy, such as solar energy, have voiced their opposition to the income-based billing plan. They argue that the plan does not incentivize the installation of solar panels or other forms of clean energy generation, as it does not take into account the energy generated by these systems. This goes against the state’s goal of transitioning to zero-emission electricity.
The Democratic supermajority in California has typically been aligned on energy mandates and policies, making this opposition from within the party notable. The growing public outcry over the income-based billing plan highlights a potential limit to Californians’ tolerance for the state’s energy policies. The significant increase in electricity rates since the state’s shift away from fossil fuels has already put a strain on households, and the income-based billing plan threatens to further burden Californians.
Despite the mounting opposition, Governor Newsom remains committed to the income-based billing plan. His spokesman argues that the policy is necessary to combat climate change and make clean electricity more affordable for low-income Californians. The governor’s support for the plan raises questions about whether there will be any significant changes to the policy before it goes into effect in February.
As the debate continues, it remains to be seen whether the pushback from Democratic lawmakers and the public will be enough to reverse or at least modify the income-based billing plan. Californians, who have shown strong support for environmental regulations in the past, are now facing the reality of increasingly high energy bills. The outcome of this debate will have implications for the state’s energy policies and the affordability of electricity for all Californians.
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