The Public Utilities Commission unanimously voted for a plan meant to overhaul the current rate system for California electricity users.
The plan approved unanimously on Friday applies to 75 percent of Californian residential customers who are getting their electricity from either Southern California Edison, San Diego gas&Electric Co., or Pacific Gas&Electric Co.
Altogether, investor-owned utilities reach out to 30 million residential users. The newly approved plan is the first to change the rate system set in place 15 years ago.
In short, the plan compressed the four-tier rate system currently in place with a two-tier rate system, at the same time surcharging users with higher electricity use. In effect, this means that investor-owned utilities will start the implementation of time-of-use system to lower concerns that higher-use customers have been subsidizing for years the low-use consumers.
Under the time-of-use system people would be able to choose to turn appliance on according to the time of day when it is most convenient price-wise. This could mean a great improvement on utility savings and pollution cutback.
The Environmental Defense Fund fully supports the overhaul of the Californian rate system as it is a powerful tool to convince customers to turn to cleaner, considerably lower cost renewables, while putting a stop to further construction of fossil fuel driven power plant.
“The California Public Utilities Commission took a significant step forward today that will give Californians more control over their electricity use and costs with time-of-use electricity rates. The decision to use minimum bills, rather than fixed charges, to ensure utilities recover their costs will help keep incentives in place for clean energy.”
The driving factor behind the rate system overhaul is weather. Under the rate system that is now becoming obsolete, electricity consumers in the lower-tiers paid lower rates than the peer in the higher tiers. At the same time, lower use rates were frozen for the past 15 years to protect electricity consumers from price spikes.
While the assumption that lower electricity use was indicative of lower incomes, while the reverse held true, it was also observed that indeed climate plays a role in the spiking or lowering of the electricity bill.
One case that proved high use consumers are not high income consumers as well is that of California inland areas where the high summer temperatures simply must be met with above average air conditioning for instance.
This differential was recognized even last year by California Governor Jerry Brown and the Legislature. An overhaul of the rate system was urged to aid California’s goal of turning to green power.
Thus, under the newly approved plan, the California Public Utilities Commission rejected a fixed charge on the electricity monthly bill and adopted a minimum bill applicable to every consumer tier.
Image Source: uncovercalifornia.com
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