California Officials Proposing Higher Electricity Rates For Households That Consume Less

Critics contended the rate proposal by state administrative law judges would raise rates for 70 percent of customers of the state's three largest utilities, and cut financial incentives to reduce electricity use.

"Two things are going to happen" if the state Public Utility Commission decides to adopt the proposal, argued Evan Gillespie, a deputy director for energy-monitoring programs by the Sierra Club environmental group. "Conservation efforts are going to struggle...and families in California who can least afford to see their bills go up are going to see their bills go up."

The proposal is meant to narrow a tiered rate structure that currently has customers of the state's largest utility, Pacific Gas & Electric Co., paying anywhere between 13.2 cents and 36.4 cents per kilowatt hour, depending on how much power they use.

California froze electricity rates for low-use customers amid the state's 2000-2001 blackout-ridden energy crisis. The gap between prices charged to power-sipping and power-guzzling households has only grown since then. Regulators say high-use households now pay well over the true cost of electricity.

The longer the disparity in electricity prices continues, "the harder it is to move back to fair rates that reflect costs and allow customers to make smart decisions," the state administrative law judges said in their rate-restructure proposal.

The proposal would bring the rates charged low-use households more in line with high-use ones, authorize utility regulators to consider more fixed fees on monthly power bills, and eventually move toward a rate system that rewards families for using power at times of day when demand on the power grids are lowest.

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Utilities have supported more fixed fees on electricity bills, while environmental groups and others have opposed them. Making fixed charges a bigger part of monthly utility bills will discourage households from adding rooftop solar panels in an effort to lower their bills, opponents of the proposed added fees charge.

California Gov. Jerry Brown has called for the state to step up support for renewable energy, so that 50 percent of the state's energy comes from solar, wind and other renewable sources by 2030.

Tiered rates are a tricky topic legally and politically in California.

On Monday, an appellate court struck down a Southern California water agency's attempt to encourage water conservation by tiering rates according to water use. Brown spoke out against that ruling, saying it put a "straitjacket" on officials as they search for ways to encourage water conservation in the state's four-year drought.

The governor's office did not immediately return a request for comment on the proposal Tuesday to move away from tiered rates for electricity.