California electricity bills will soon be based on your income

High-voltage power lines are shown in this undated photo. (Getty Images)

If you earn more, you pay more.

That’s the basic idea behind sweeping changes proposed by California’s three largest power companies that will impact your electricity bill.

Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric submitted a joint proposal to the state’s Public Utilities Commission last week that outlines the new rate structure. It follows last year’s passage of Assembly Bill 205 which requires a fixed rate and generally simpler bills.

Under the proposal:

• Households earning less than $28,000 a year would pay a fixed charge of $15 a month on their electric bills in Edison and PG&E territories and $24 a month in SDG&E territory.
• Households with annual income from $28,000 – $69,000 would pay $20 a month in Edison territory, $34 a month in SDG&E territory and $30 a month in PG&E territory.
• Households earning from $69,000 – $180,000 would pay $51 a month in Edison and PG&E territories and $73 a month in SDG&E territory.
• Those with incomes above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory.

Southern California Edison says approximately 1.2 million of its lower-income customers will see their bills drop by 16%-21%. Lines for recurring charges, such as maintenance and operations, will simply go away.

“That law was intended to lower the amount that residential customers pay per kilowatt hour while increasing transparency with bills,” Kathleen Dunleavy, a spokesperson for SCE, told KTLA on Friday. “This will provide relief to millions of customers.”

Overall, rates will decrease by about 33% per kilowatt hour for all residential customers.

“We have listened to and heard from our customers that fundamental change is needed to provide bill relief,” SDG&E CEO Caroline Winn said in a statement. “When we were putting together the reform proposal, front and center in our mind were customers who live paycheck to paycheck, who struggle to pay for essentials such as energy, housing and food.”

State law requires the CPUC to adopt a new rate structure by July 1, 2024. Southern California Edison says the earliest customers would see the updated bills is 2025.