Recently, there has been some confusion about the state-mandated, fixed charge proposal from California's investor-owned utilities. Let’s break it down.

The California Legislature passed a bill last year which requires the California Public Utilities Commission to change how electricity bills are structured for residential customers.

What are the goals of this California state law?

• Separate a utility’s fixed costs (for grid infrastructure, customer service, etc.) from electricity usage rates and clearly show these different line items on monthly bills.
• Address the increasing energy burden on lower-income customers by implementing an income-graduated fixed charge, so lower-income households would pay a lower amount for the fixed charge portion of the bill than those from higher-income households.
  
• Lower the cost of each unit of electricity (¢/kWh) paid by residential customers.
• Support a 100% clean energy and carbon-free future by 2045 as mandated by the state.

To facilitate these goals, the CPUC asked interested stakeholders, including the state’s investor-owned utilities, to design proposals for how to implement the law. Other parties who submitted proposals include consumer advocates, the solar industry, environmental advocates and small investor-owned utilities.

In responding to the CPUC, Southern California Edison’s priorities are a rate design that benefits the most customers, produces a more transparent monthly bill, and makes it easier for SCE’s customers to afford clean energy technologies. SCE’s proposal would achieve this and lower the price for each unit of electricity consumed by about 33% for residential customers.

The fixed charge isn’t an additional charge or a new cost for customers. Instead, the CPUC will simply be adopting a change to the components of residential customer bills. Utilities will not collect any additional money from this change in bill structure.

A CPUC decision is expected in 2024. Any resulting changes to customer bills will take place in 2025, at the earliest.