Why A Fixed Monthly Charge Could Start Showing Up On Your Electric Bill

Electric bills are going to look a lot different for millions of people across California beginning late next year.

State utility officials voted Thursday to roll out a fixed charge for customers, as required under Assembly Bill 205, which lawmakers passed nearly two years ago with support from Gov. Gavin Newsom.

According to the California Public Utilities Commission (CPUC), the new billing structure will cut the price of electricity, bring down bills for lower-income people, and help the state’s clean energy transition.

But Republican and Democratic officials have shown skepticism, including from some who originally voted for the plan, with Southern California representatives on either side of the aisle introducing their own bills to claw back the changes.

What this means for customers

All residential customers of Southern California Edison, Pacific Gas & Electric, San Diego Gas & Electric, and other investor-owned utilities will start seeing a flat rate on their bills, including those with rooftop solar.

L.A. Department of Water and Power, Burbank Water and Power, Glendale Water and Power, and other municipal utility customers will not be impacted.

Most people will pay a $24.15 flat rate per month, which is about $290 each year.

But low-income and affordable housing customers will pay a lot less — $6 a month for those enrolled in the California Alternate Rates for Energy (CARE) program, which CPUC President Alice Reynolds said is one third of all utility customers. People in the Family Electricity Rate Assistance (FERA) program and those who live in affordable housing restricted to residents with incomes at or below a specific cutoff will pay $12 a month.

All customer bills will also include a reduced usage rate to cover the costs of each unit of electricity, but according to a CPUC fact sheet, the new structure doesn’t introduce any new fees, “it simply reallocates how existing costs are shared among customers.”

The changes can start rolling out late next year for SoCal Edison and San Diego Gas & Electric customers. But PG&E, Bear Valley Electric Service, Inc., Liberty Utilities, and PacificCorp d/b/a Pacific Power will have to wait until early 2026.

About the vote

Alice Reynolds said during the meeting that the billing adjustment is very incremental, but an important step towards the state’s decarbonized future, and is only one way officials are trying to keep pace with that transformation.

She said the affected customers will now be better off financially if they electrify, no matter where they live or the size of their home.

“The new billing structure will reduce the price per unit of electricity by roughly 5 to 7 cents per kilowatt hour,” she said. “This means that every time a customer plugs in their electric vehicle to a level two charger, and or dials up their electric heat pump, the price of that electricity they use will be cheaper.”

Alice Reynolds said the flat rate will cover some of the infrastructure costs of the wires and transformers needed to feed power to and from the people they serve.

Commissioner John Reynolds said he wanted to respond directly to some of the discourse around the decision, saying the idea that this will “undermine the motivation to conserve is quite frankly, laughable.”

He also called the argument that the billing restructure is unfair to higher-income people irresponsible.

“This framing genuinely makes me sad, because there is little about our energy system that is tilted in favor of lower-income customers,” he said. “They pay exponentially more of their income for utilities. They're much more likely to live in older inefficient homes. They are much less likely to have access to things that can save them money like solar and batteries.”

John Reynolds said that argument ignores those realities.

The CPUC approved the plan in a 4 to 0 vote, with Commissioner Matthew Baker recusing himself for several items on the agenda.

Backtracking from both sides

Assemblymember Jacqui Irwin, a Democrat who represents Thousand Oaks, Calabasas, and Malibu, has been fighting the fixed charge in recent months after she voted to support the move back in 2022.

Irwin and a group of Democratic state lawmakers introduced Assembly Bill 1999 in January to repeal parts of the plan.

“Based on the evidence that has been presented to the Legislature, the fixed charge fee approved by the PUC today will primarily benefit high energy users at the expense of low and middle income consumers that have already worked hard to minimize their usage to avoid the second highest energy bills in the nation,” she said in a statement. “We need to focus on driving down energy bills for all Californians so that we can invest and achieve our climate goals.”

When asked about her change of heart at a Jan. 30 news conference from the state capitol, Irwin said the bill should’ve had a thorough, robust discussion, and the way it was quickly passed was “not appropriate.”

Irwin’s bill had been stuck in the Rules Committee for about two weeks, but she said in a statement that they’ve negotiated amendments that will allow it to be heard and would treat the fixed charge as a pilot project, if passed and signed into law.

“Over the next 4 years the bill would prevent the PUC from modifying the fixed charge fee beyond adjustments for inflation, hold the PUC accountable and require them to report to the Legislature as to whether it achieved its goals without negatively impacting consumers bills, and allows the fee to expire, in 2028, if it does not meet its objectives,” Irwin said in a statement. “These amendments will return this runaway process back to the Legislature to weigh in on whether or not the program is taking California in the right direction. I would like to thank Speaker Rivas for working with me and my colleagues on this important issue.”

State Senate Minority Leader Brian Jones, a Republican who represents San Diego and Escondido, introduced similar legislation in February. After opposing the original bill, he added an urgency clause to Senate Bill 1326 that would’ve immediately repealed the restructuring, if passed and signed into law.

Jones told LAist his bill was designed to take authority back from the CPUC, which are governor-appointed positions, and return it to the legislature. He said he heard loud and clear from his constituents that the income-based rate structure was inappropriate.

“Not only am I concerned about saddling Californians with nearly $300 a year in additional charges, but I’m extremely troubled that the commission has unchecked power to raise this charge any time it wants,” he said in a statement. “The $24 per month this year could easily turn into a $50, $100, or an even higher charge next year.”

But his plan stalled in the Senate Energy, Utilities, and Communications Committee late last month when all 14 Democrats didn’t vote. The four Republicans on the committee voted in favor.

Nearly 2,500 people have signed Jones’ petition supporting the bill, according to his office, and he said the more telling thing is that none of his Sacramento colleagues voted against it.

“None of the Democrats voted no,” he said. “So that indicates that they're nervous about this whole program, they know that the public is upset about it.”