A Southern California Edison proposal filed earlier this year with the California Public Utilities Commission would lower the amount all residential customers pay for each kilowatt-hour of electricity while increasing transparency in their bills.

According to the most recent version of this proposal, a standard fixed charge would be applied to all residential customers, except for lower-income customers enrolled in the state’s California Alternate Rates for Energy or Family Electric Rate Assistance programs, whose income already qualifies them for bill discounts; their fixed charge will be lower.

No new income verification is needed in this new proposal, which was submitted jointly by SCE, Pacific Gas & Electric and San Diego Gas & Electric.

Because of a recently passed state law (Assembly Bill 205), the commission is holding a proceeding to implement a fixed charge on electric bills.

“We understand that our customers are dealing with rising costs of all kinds and we are working to keep customers’ bills as manageable as possible,” said Steve Powell, SCE president and CEO. “SCE believes a fixed charge will benefit millions of customers, particularly those most in need of energy bill relief. It will also make it easier for more Californians to afford clean energy technologies.”

How would it work?

The proceeding will focus on basing electric bills on two main charges:

1. A monthly charge to cover certain fixed costs of providing electric service. For example, the costs of safely building, maintaining and operating the electric grid; providing customer support; and the cost of state initiatives to help income-qualified customers and energy-efficiency programs.
2. An energy charge based on the customer’s electricity usage during the billing period.

While these would not represent new or additional charges, they would restructure how electric bills are calculated. Companies like cell, water and cable service providers already include fixed charges on their customer bills.

If SCE’s proposal is approved, all residential customers would pay less for each unit of electricity they use. For example, SCE’s current residential rate of about 36 cents per kilowatt-hour would fall to 26 cents. In addition, SCE’s approximately 1.2 million lower-income customers would receive an average 5%-18% bill reduction, and about half of SCE’s customers would see lower bills, assuming no change in electricity use. For customers who don’t immediately benefit, SCE offers energy efficiency and demand response programs and energy-saving tips to help them save money on their electric bills.

The proposal also recommends that the standard monthly fixed charge for SCE’s customers be $51, while lower-income customers enrolled in CARE or FERA would pay a fixed charge of $10 or $15.

If adopted, the proposal would make monthly bills more predictable for customers’ planning purposes. It would also support California’s climate and energy policies by making the use of clean energy technologies such as electric vehicles and heat pumps more affordable, particularly for lower-income families.

The proceeding is expected to last through mid-2024.