A new regulation aimed at reducing electricity costs for Californians is set to be implemented.
As per the recent talks, California regulators are looking to amend a bill for the power companies on the electricity cost calculation.
They are likely to make a decision that would make it less expensive for people to use their appliances but would increase prices for those who don’t use as much energy.
The California Public Utilities Commission is scheduled to vote on Thursday on a proposal for a new monthly charge for electricity bill consumption.
For most people, it would be $24.15, whereas for the lower-income group, it would be around $6 or $12 per month.
With the new rate slab, the price of electricity would drop 5-7% per kilowatt-hour.
However, customers who use a lot of energy would likely see savings, while those who use less electricity could notice a hike in their electricity bill.
According to the commission, the proposed fixed charge on monthly power bills will lower the overall bills for residents, especially for people who are residing in extreme heat temperatures like Frenso, where the temperature might even soar above 100 degrees Fahrenheit.
The commission even stated that the people might be able to save an average of between $28 and $44 per month from the new fixed slab would be more than the previous electricity price drops.
“The new billing structure more evenly allocates fixed costs among customers and will encourage customers to adopt electric vehicles and replace gas appliances with electric appliances because it will be less expensive,” Administrative Law Judge Stephanie Wang quoted on the decision.
The introduction of a new electricity bill would benefit high-energy consumers but would likely result in higher charges for low-energy users, especially those who reside in smaller apartments or cooler regions and do not need air conditioning.
Ken Cook, president of the Environmental Working Group, expressed concerns that “If you wanted to design a policy instrument that would send the signal that conservation doesn’t count, this would be it.”
As per him, the new rate slab could discourage energy conservation efforts, which has been California’s one of the top priorities.
Most states already have fixed monthly charges for their electricity bills, but in California, where the electricity rates are already high compared to the national average, any proposal that could potentially raise costs for consumers draws concern from both the public and elected officials.
A group of 18 members of Congress from California has urged the commission to keep the fixed charge at a low rate, highlighting that the national average for such charges is $11.
Additionally, some lawmakers from both the Democratic and Republican parties in the state Legislature support a bill that would set a cap on the fixed charge at $10 per month.
One of the Republicans in the California Senate wrote a letter to the commission to reject the proposal. She said, “We must do more to rein in the ever-growing cost of living in our state, not find new ways to add to it.”
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