I'm a fan of having a fixed connection fee. But varying it by income seems stupid. Why are you making transfer payments so complicated? If poor people in the state need more money, then just do that. This adds needless overhead and is unnecessarily complicated. Poor people pay a higher proportion of their income on _lots_ of things and it would be assinine to try and price every single one of them based on income rather than just doing a single, simple transfer payment.
Because they want to tax the middle class, not the rich.
The amount they charge won't make a dent in the .1% - but it'll be a hit to many people in the top 10%.
An extra $100 in taxes a month to a family making $180k (with house prices and taxes as high as they are in California) is not peanuts. That's literal line-items for middle class families: the cable bill, the car insurance, your kid's music lessons, etc.
$100 is peanuts to someone in the top .1%, though. That's just another Breakfast at Tiffany's.
It does feel like another attempt to milk the middle class by classifying them as "rich". We should stop treating productive people like doctors, trades people, engineers, small business owners, etc. who have worked their way into a ~150-500k range as if they are millionaire hedge fund managers or something.
The same thing happened with Obamacare, affordable for everyone meant almost free if you are poor and crazy expensive if you are making >50k. Meanwhile improving infrastructure or addressing why stuff is expensive is not even part of the discussion.
Its even more devious than that. This is household income, so two parents each making 90k - restaurant managers, entry-level corporate employees, etc. - would also qualify for the highest income tax bracket. 90k is not a high salary in much of California either, this isn't just for higher-earners.
I'm not even sure it would do that. Many "wealthy" people show virtually no income. This will create one more incentive to hide income for those who can afford to do so. And one more tax on those who don't play games with taxes.
Exactly! They should just lower taxes on poor people and increase taxes on rich people. No need to create administration overhead and costs (sucking more value from poor people).
This seems so obvious, but I am curious why someone thinks this is a good idea? My only guess is the people driving this change don't have the power to do it 'right' so this is the closest they can do?
California likes to do complicated stuff like this because it provides the appearance of improvement without threatening the status quo.
Rent control is a great example. It decreases housing supply, so it increases returns on investment for real estate in California, and increases homelessness. However, the politicians get to claim it does the opposite of those things because basic macroeconomics are too nuanced for campaign slogans.
Honestly rent control isn't as simple as you specified either. Implying that there are no benefits to rent control for those living in rent controlled units is just as deceptive as claiming that rent control will help everone.
The underhanded "rent would be lower so everyone would pay less" is fundamentally flawed. Certainly you can argue some people pay more due to rent control but we cannot pay more on average unless you decide to ignore that getting rid of rent control would also increase demand while increasing supply.
A "classic" scenario with rent control is a tenant lives in a home for 10 years and has below market rent. The LL wants the tenant to leave, so the landlord create more housing units [0].
But everyone throws their arms up, because the tenant can't afford market rent. A battle in court proceeds and the tenant ends up receiving a $100k buyout to leave.
Based on this relatively common situation, rent control prevents more housing from being built and causes prices to increase (the $100k buyout needs to come from somewhere).
Environmental review is just another way of saying NIMBY.
Developers building non-rental housing don't care about rent control. In fact, they benefit from rents being high, and from there being a housing shortage, as it makes non-rental housing more financially attractive.
Developers building rental housing shouldn't care much about it, either, as their financing is dependent on what they are going to rent the units out for, not what some grandma who lived in her apartment for 30 years is paying. Grandma's not part of the tenant market for new units, L5 SWEs making 400k/year are.
What % of a development's budget goes to this? I expect it to be less than 2% on the average, across the whole city.
It's not the first, second, or even fifth reason for the supply-side shortage. The costs are passed on to the buyers/renters, and despite that, demand continues to massively exceed supply.
Rent control is amazing deal for old people: Multi-million dollar payouts and insanely cheap rent, but these benefits are paid by the future generation of residents.
As you said, eliminating rent control would lower prices by 2% on average (saving future residents millions) and helps projects be built faster (by removing red tape).
If it was anywhere other than CA, I'd guess that this was the only way they thought they could pass increased transfer payments. But with the current power balance in CA, I find that hard to believe. Maybe they just think this will be more politically palatable than changing taxes? If so, I'm skeptical it will work out for them. This is pretty blatantly obvious.
It moves part of the rate to a fixed payment, and its still subject to the usual periodic CPUC rate process, which includes cost analysis, so if their costs really were going down, they’d see the rates cut.
The point is to deal better with the economics of established widespread distributed generation and to avoid disencentives to displacing existing residential gas use with electricity, and to similarly improve the incentive structure of home-charged BEVs vs. gasoline vehicles. Doing that takes splitting payment for generation (per kW) from connectivity (fixed) rather than inflating per kW costs to capture the average costs of connectivity.
> They should just lower taxes on poor people and increase taxes on rich people.
CPUC can change utility fees statewide, but any statewide tax change would take legislation, and if it includes an increase of any kind, anywhere, would take a supermajority in both houses of the legislature, and changing that would take a Constitutional amendment.
Government can create incentives for the people through taxes, but the people create incentives for government through Constitutional structures.
Of course, once CPUC has the proposed set up, and before it goes into effect, nothing stops the legislature (which is above CPUC), if it can find the votes, from eliminating the income gradated fixed fee portion of the rate, funding utilities the average cost of that out of state funds for all hookups, and adopting appropriate additional taxes to cover it (or any of a variety of other ways of moving the income gradation into the tax system), and while that would be a better way to do things, its better to do it the way proposed than not at all, which is the more likely result of relying on a legislative supermajority.
Adjusting taxation to benefit people with less wealth while using public money to help people is too difficult to actually accomplish because people with more wealth use that wealth to game the system in ways that helps them preserve (and grow) their wealth.
If that were true the top 10% income bracket wouldn't be paying the extreme majority of all the income taxes in the US (around 73% of all income taxes). Instead they'd pay very little.
The US is a highly progressive taxation country. By comparison, Scandinavian countries are far less progressive on taxation, the burden is spread wider, you're made to pay for eg your healthcare costs in said countries via high taxation. Also compare the typically modest US sales tax levels vs the high VAT taxes across Europe and elsewhere.
Here are the facts for the US taxation profile.
Top 1% of income earners - share of all income: 22%, share of all income taxes paid: 42%. Average income tax rate: 26%.
So you've got the top 1% paying 42% of all income taxes. If they actually controlled taxation (ie if the US system of government worked by bribery as is so often incorrectly claimed), it's very clear that wouldn't be how things work.
5% to 1% bracket - share of all income: 16%, share of all income taxes paid: 20%. Average income tax rate: 17%.
10% to 5% bracket - share of all income: 11%, share of all income taxes paid: 11%. Average income tax rate: 13%.
25% to 10% bracket - share of all income: 21%, share of all income taxes paid: 15%. Average income tax rate: 10%.
50% to 25% bracket - share of all income: 19%, share of all income taxes paid: 9%. Average income tax rate: 7%.
Bottom 50% - share of all income: 10%. Share of all income taxes paid: 2%.
Taxpayers in the US earning under $42,000 had an average income tax rate of 3%.
> If that were true the top 10% income bracket wouldn't be paying the extreme majority of all the income taxes in the US (around 73% of all income taxes
“Income taxes” are only about 57% of federal taxes on income. And the other 43% are bottom-weighted payroll taxes.
Everyone paying the government instead of a healthcare insurance company does not make the US more progressive. Yet your evidence implies that is the case.
Similarly talking about progressive income tax and ignore other forms of taxation is silly. Way more than 3% of the lower 50% income goes to taxes they just aren't federal income tax.
Because rich folk have the means to figure out loopholes to get around that. The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, along with the whole "and that's why Warren Buffett pays less taxes than his secretary!"
It never makes sense to do it for the tax breaks. unless your income tax rate was 101%, then the reduction in your taxes is always less than the donation, meaning it's always a net loss to you. Remember, donations lower the total taxable income, not the total amount paid, so it's effectively like you never earned the money you donated.
> The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense,
How does this work? Suppose that someone donates $1 million to charity. They don't pay income tax on that money -- but they no longer have the money. I suppose that they could try to get clever about it by making a "buy yachts for our donors" charity, but that's explicitly illegal under the 501(c)(3) requirements.
Big donors do effectively direct the agenda of charities, and while direct “buy yachts for out donors” things are usually hard to get away with, there are lot of other ways for charities to be used for donor personal benefit, e.g., as a vehicle for social influence operations, political (as long as it isn’t too nakedly and specifically centered on a specific election) and commercial propaganda, and other things rich people would spend money on to benefit themselves and the businesses from which they derive income with or without a tax break for doing it.
often they'll loan out pieces of art to museums, so they get the tax benefit and they get to keep the art pieces. I'm not sure how many of them are giving cash away to non-profits they don't have some controlling interest in (seems it would be rare but maybe I'm wrong)
You're somewhat misremembering a real thing. It's possible to profit by donating a piece of art to a museum and claiming its value to be much greater than what you'd get on the open market. This is tax fraud, though, and the IRS will probably notice.
I've not researched this as much as I'd like to, but as far as I know, the entire point of this change is to facilitate/incentivize people to finally move away from natural gas to electric appliances.
To do this, folks will need a financial incentive to switch, which means an effective tax, but utilities can't really do that, so the idea is to just have everyone pay a large base for electricity, and then have diminishing returns on usage... where that doesn't exist for gas usage.
Think about your typical California resident's home set up. They have wall plugs, but then they will have a gas stove, gas heater, and gas water heater... and because of the "historic" nature of CA (non)development, many of these appliances literally belong in wasteful era of the 1960s.
The new structure will be painful for folks unwilling to switch to induction/electric range/stove, heat pump, and electric water heater, which is where the income-based rates become relevant. Every person of every income will have an incentive to switch to electrification, but a flat-tax would basically wreck poor folks, while providing zero incentive to change for wealthier folks.
In theory, I honestly think it's a pretty smart way of doing things, but there are some notable priors and caveats. The first prior I have is that climate change matters, and swapping natural gas usage for electric will actually notably reduce GHG emissions (I think this is the case). The caveats are that they need to come out and say this is about climate change (they do in the actually detailed texts -- https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energ... -- but they don't actually address it when discussing it. The second caveat I have is that this actually fucks over renters pretty hard.
That payment you are referring to is a Universal Basic Income, and there's nothing "simple" about it. The chances of it getting implemented state-wide are ~0. Meanwhile a utility company has control of its rates and can choose to push changes via those.
UBI is far from the only way to do a single transfer, and it certainly can be simple (from the perspective of actually running it, if not from the politics perspective). But I was not suggesting a change to the benefits system in CA. I was suggesting using whatever existing benefits programs there are (of which I'm sure CA has many), rather than trying to create a new one. California has _lots_ of ways of getting money to poor people, including changing the tax structure. There is no need to create a completely novel, complicated way of getting them more money.
> PG&E has to get these things approved by Sacramento
San Francisco, actually. CPUC has HQ in SF with Sac and LA field offices.
> just like a UBI would be.
The revenue for a UBI would take a legislative supermajority (because of Constitutional rules related to taxation), a change in utility rates takes a CPUC majority. Its a smaller margin in a different body.
So, no, the approval is not “just like a UBI would be”.
California has fucked up so badly by not nationalizing PG&E, and instead allow it to continue to be poorly run as a for profit enterprise while proposing and enacting suboptimal pricing dynamics and redistribution strategies for energy.
If you want to help the poor, directly subsidize solar panels and batteries for them (thorough the state and federal gov, not the investor owned utility), or community utility scale renewables and storage where on site generation and storage is infeasible.
(Designing a 20kw ground mount expansion for a friend outside of Sacramento on SMUD to work towards going off grid if needed)
> community utility scale renewables and storage where on site generation and storage is infeasible.
This can't come soon in enough in CA where a huge number of people don't have the option of rooftop solar because they are apartment and condo dwellers and/or renters. Apparently a law was finally passed in 2022 to allow community solar [1], but Energy Sage community solar searches [2] turn up nothing in any of the populous zip codes I entered.
I might be wrong, but I was under the impression that eminent domain wasn’t available to states for transactions like this.
A quick search turned up this article[1] talking about an attempt to do exactly what we’re talking about here, but it was ultimately settled out of court and as far as I can tell it’s still an open question as to whether a state government can legitimately exercise eminent domain in this context.
> residential solar in CA is being shut down by policy.
Residential solar is being mandated by policy, slightly reducing the incentive to build it by shaving off a portion of the per kWh charge and replacing that portion with a connection fee wouldn’t kill it even if the mandate wasn’t there. Which, again, it is.
The authors _want_ you to use more power. But they think it's going to be in the form of buying an EV or an electric furnace, as versus just running your AC more days per year. They frame this specifically in terms of meeting our carbon emission targets. But this only can work if (a) most of the increased electricity use is supplanting fossil fuel use and (b) they can bring more green power sources online faster than people's electricity use increases.
> Achievement of California’s GHG reduction goals increasingly require more electricity consumption via building electrification and electric vehicle (EV) adoption. It is imperative that the Commission takes steps to reduce volumetric rates. IGFCs can reduce volumetric rates in a manner that eases affordability pressures on low-income customers and improve access to electrification, when done correctly.
It will under the proposal, though that cost is less than without it. Its splitting the rate to a fixed and variable component, not going all fixed.
> If there's no economic incentive to save power, people will tend to do it less.
Part of this is shifting incentives from non-electric-grid energy use (natural gas appliances, ICE cars) to grid electricity use (electric appliances, BEV cars).
We don't want people to save grid electricity by using more polluting energy sources, and overpricing per-kW grid use incentivizes that undesirable behavior.
The problem is that you aren't paying for kWh alone (about 20% of your bill goes to that), you are also paying for grid maintenance. With people (typically well-off people) going solar the money for grid maintenance needs to come from somewhere.
I support the goal here, but I don't like the implementation. Something such as a fixed monthly cost for grid-tied systems would make much more sense.
Why should we conserve energy? Why is it “morally wrong” to use massive amount of energy? Shouldn’t we make energy immeasurably abundant and essentially free?
Are we going to run out of Sun?
It seems like with the criticism of non-renewables, the current zeitgeist has convinced everyone of degrowth ideology wholesale. The debate about renewables and non-renewables is orthogonal.
Humans IMO should have an ambition to consume all the wasted energy radiating out in outerspace by the Sun and capture it for our use.
Energy conservation has religious cult-like faith-based undercurrents. Brainwashed.
No, but this is the same orgiastic mentality that prevailed when oil was cheap in the 90s. It bit us in the ass when demand increased.
Just because capacity exists doesn't mean we should maximize usage.
> consume all the wasted energy radiating out in outerspace
That's not wasted, it's just not captured. Capturing it requires strip-mining of the planet for the materials needed to build the damn panels, just so we can do dumb shit like generating fake money and running air conditioners with the windows open because it has no apparent cost to us ("free energy from the sun!").
Your logic literally drove the buffalo to near-extinction. People were killing and leaving them for dead just because they could. It's parasitic behavior.
Your logic is literally going to lead to depopulation of millions. Conserving the buffalo is completely orthogonal and completely unrelated to what I am saying; a strawman.
Is there a risk if rates are too low with a transition to residential/on-site solar that PGE will further be unable to afford critical maintenance? Although transition to EVs may mitigate a drop in grid consumption due to solar.
> This is a horrible proposal. Power should still cost per KWh, but that price should be the sliding scale.
Both of those things are still true in this proposal - it's not proposing a fixed price for electricity based on income. Electricity will still be priced per kWh (although at a slightly lower rate) over and above the flat income-based fee, and the price will continue to vary by time of day (AKA time-of-use) instead of by income.
The income-based fees will cover all the state-mandated programs run by the utilities to provide support for low-income residents, among other things. Yes, that's effectively a redistributive tax that should be done via regular state legislation and state programs to help lower income people install solar and batteries, thereby increasing their resilience and decreasing their dependency on utility rates.
But such measures are unpopular because nobody will vote for a tax raise to help poor people pay for equipment to help them save money on electricity bills. That's a privilege for the well-off. These issues are left between the conflicting interests of a shareholder owned utility and the state.
The only fair system is to make everyone pay in (near) real-time for the actual cost relative to demand. Everything else is ultimately going to rip off some party (whether they are a party you like or not is irrelevant).
Basic physics is fairly strict about all of this.
Some of us were briefly allowed to do this in Texas (and presumably some other regions). I was on griddy for a few years and was strongly incentivized to pay attention to my consumption patterns. My bill "ticked" every 5 minutes.
Nothing educated me more about how much power my appliances suck down than a proper, real-time variable rate plan. Any other form of conservation "education" is going to pale in comparison to real time economic pressure. If you had a lot of time to worry about money, you could make your power bill cheaper than a MVNO phone bill.
The reason some think variable rates are broken or won't work could probably be traced back to the fact that very few grid participants (outside of a few industrial partners) are impacted by the actual, real-time cost of electricity.
The thing that pissed me off more than anything was watching the politicians in my state cast variable rate plans as an attack on the poor. Nothing could be further from the truth in my own mind, but only if one is willing to explore the incentives & side effects at every step along the way.
I would disagree with the fairness angle, it's perfectly "fair" to transact in terms of energy futures - e.g. pricing for the net present value of a kwh between 9am-5pm over the next month can be set by the market - much like how we do for corn or oil.
Of course whether fully dynamic or futures-hedged pricing is more common or even dominant would be down to buyer/seller preference.
The best thing I ever did for my electric bills was get solar and a battery. The second best was install smart switches and occupancy/vacancy detectors. Even with efficient lighting fixtures, having lights on in rooms no one is in wastes so much energy. When I got the sensors working I saw an immediate decline in my day to day use
Agreed. I put motion switches in all low occupancy areas of the house (bathrooms, hallways, closets, laundry room). Those seemed to be the areas where lights were left on unnecessarily the most and they're the areas where we're generally moving if we're there, so it has worked out great.
For bathrooms with a shower, I set the timeout to 10 minutes so it doesn't go dark when someone is in the shower. If their shower is longer than 10 minutes, they get punished with darkness, so that has helped save water too. Everywhere else the timeout is 1 minute.
Lutron actually has a switch package that can detect people even if it can't "see" them. I believe it uses ultrasound. Either way, you can poop and bathe with the lights on, and it knows your there
For showers, I actually managed to find an ultra low flow shower that feels amazing, better than some high flow heads I've used in the past. I blogged about it here: https://pdx.su/blog/2023-01-30-a-good-shower
> The only fair system is to make everyone pay in (near) real-time for the actual cost relative to demand.
That's only "fair" if you're limiting your view to the specific transaction at hand.
The reason we try to make systems like this is because many of us recognize that when you zoom out, your definition of "fairness" has to change.
If you look at the whole current socioeconomic system, it's very clear that it is not fair to charge a family of 5 living on a minimum-wage salary (or even two or three) the same amount for a basic necessity like power as you charge a Silicon Valley billionaire—unless the amount you're charging is zero.
Note this is a brand new fee that just so happens to be based off income. It has absolutely nothing to do with making energy cheaper for poor people. Gotta love California! Brought to you by the same people who charge for license plate stickers based on the value of the car.
Interesting. Do other states not tax registration based on the value of the vehicle in some way? I don't live in California, but my registration is variable to the value of the car.
>Some state Republican lawmakers are warning the changes could produce unintended results, such as weakening incentives to conserve electricity or raising costs for customers using solar energy.
Finally on the right side of history these guys. In this instance, they're right. It makes the economic incentives to conserve electricity and invest in rooftop solar completely backward. You're undermining conservation efforts and clean energy all in one swoop, just so more profits can be reaped by the power companies
I guess time will tell if they're right or not. I do think they're on to something, or at least the utilities are wrong about something.
The utilities are pulling the same move the cable companies did -- rapidly increasing prices as competition (solar in this case) encroaches on their turf. It's a classic attempt to increase short term profits while ignoring the long term effects, not to mention doing it in the most lazy way possible (increasing the price instead of lowering costs).
If they anger all of their rich customers they will drive them away even faster (to solar and batteries, and they won't even need to be on the grid). I'm sure with regulatory capture they'll be able to get a law passed that requires houses to be connected (and pay the $95+ fees every month), if they haven't done that already.
Now ask these Republicans what they think about nationalizing this utility company which is in charge of providing power to most of the state vs having it run as a private for-profit enterprise.
> In the power companies’ joint submission to the California Public Utilities Commission, they suggest these fixed fees for each customer’s income range.
> Households with incomes earning less than $28,000 a year would pay a $15 monthly fee in the Edison and PG&E service territories and a $24 monthly fee in SDG&E service territory.
> Households earning $28,000 to $69,000 a year would pay $20 to Edison, $30 to PG&E or $34 to SDG&E each month.
Households earning $69,000 to $180,000 would pay $51 to Edison or PG&E, or $73 to SDG&E.
> Households earning more than $180,000 would pay $85 to Edison, $92 to PG&E or $128 to SDG&E.
Additional quotes that for some reason seem funny to me from the article.
> But the utility companies say the measure would reduce electricity bills for the lowest income customers. Those residents would save about $300 per year, utilities estimate.
> California households earning more than $180,000 a year would end up paying an average of $500 more a year on their electricity bills, according to the proposal from utility companies.
It seems like this is just a fee the utilities companies want to charge that is based on income. Am I misunderstanding that? Is this intended to incentivize something or help anyone? It just seems to give more money to the utility companies.
Ok, so taking the difference between the second lowest band (which is probably the fair price) and the highest, that’s $62/month extra for rich people to pay.
That’s $744 a year. The incremental cost of going full off grid vs. solar + batteries is about $20K. So, if this were the only way PG&E screwed over you, it would take 26.4 years for a full off grid system to pay for itself.
I’d guess the true time to ROI will be under 10 years if this passes. At that point, the grid will probably start a death spiral, just like the landline phone network.
But if you already have a substantial PV setup, and you're within shooting distance of providing power to cover your own use, it may be come worth it to expand (or decrease your use) if you're faced with paying $1536/year (128 * 12) just for being connected to the grid.
In general I think you should push your redistributive interventions into the system as early as possible, rather than distorting the market. Just reduce the income tax on low-income households, don’t make it harder for every business to operate by adding pricing complexity!
Add a UBI or negative income tax if you need to get more coverage for under-/un-employed.
I think the overhead of interventions like this is strongly under appreciated.
I have powerwalls because PG&E are fricking terrible at actually supplying power. Doing a quick check on the app shows me I have had 10 power outages this year so far, with the longest being >24 hours.
If PG&E want to charge me an extra $500/year (their estimate, so double that in reality) then they ought to get their service working better first. It's a rare day that the outage tracker on their website shows no outages...
Perhaps if they invested the money into infrastructure instead of executive bonuses, their service might work better.
That’s why they did it. If too many people cut down usage thru solar then everyone else has to pay more per kWh of usage.
The usage is a big cost for any utility provider, but another huge part is keeping everything maintained and connected across the entire grid. That costs man hours, materials, you name it.
If you swap to solar and pay 0$ per month, yet you still incur costs to your utility to keep lines running to your home and your county, then a flat monthly fee to charge for that unused connection to cover your capacity to use it when needed makes sense.
Something had to give, idk if the path they’ve chosen is the right path however
its just a matter of replacing those per-panel inverters with a lot of string inverters and reaching out to diysolar forums on how to build your own prismatic batteries on the cheap. prolly 3-4 $2k inverters and maybe 10k of batteries
>Huge kick in the nuts for everyone that installed solar. Especially those of us in San Diego county
How so? Did you not invest in solar in order to decrease your carbon footprint?
If you did it to save money, the evidence is pretty clear that without subsidies a lot of green industries are unsustainable. Government policy can change on a whim.
This sort of smug "Did you not invest in solar in order to decrease your carbon footprint?" with the implied "Why did you expect it to save you money?" argument is not going to be productive if your goal is reducing emissions.
Selling solar as a means to lower your costs in an environmentally friendly way, then raising prices in a way that cancels out those savings and smugly telling angry people that they were supposed to do it for the environment without concern for cost to themselves is only going to make them less receptive to your cause.
Your information is quite a few years out of date. The solar learning curve has continued in the meantime, reducing the cost every year. Especially in sunny places like California, unsubsidised solar pays for itself surprisingly quickly (I don’t have the numbers for CA, but I wouldn’t be surprised if the number was 10 years).
One consequence of this is that it's going to kill rooftop solar. I was about to enter a $30k contract for solar, heat pump, and other upgrades but I backed out when I heard this news. Thats $30k not being invested into clean energy for California.
It was kind of shady how everybody was rushing to get solar earlier this year so they could get grandfathered in before NEM 3 took effect, making all these complicated long-term ROI calculations, but this other new policy that would invalidate all those calculations was kept secret until after NEM 3 took effect.
> It was kind of shady how everybody was rushing to get solar earlier this year so they could get grandfathered in before NEM 3 took effect, making all these complicated long-term ROI calculations, but this other new policy that would invalidate all those calculations was kept secret until after NEM 3 took effect.
Since this surcharge is independent of usage, this shouldn't affect the solar calculation, right? That is, if you don't install solar you pay $USAGE + $SURCHARGE, if you do install solar you pay $USAGE+$SURCHARGE-$SOLAR. The total dollars saved with solar should be identical, unless you were banking on a per-kWh increase.
The proposed policy splits the current bill into two part, it reduces the existing per kWH price to add the surcharge price. With solar you sell your excess generation to the utility at the per kWH price, so with the new policy the utility will pay you less. On top of NEM 3.0 already reducing what the utility pays for solar, these projects won't make financial sense anymore.
I don’t know, I think this proposal means a neighborhood scale “grid” + solar + batteries is cheaper than PGE for a high income area. What happens to the grid when it’s only poor people left connected to it?
How is solar opulence? It runs the toaster just the same as pge's power. I don't really gain anything out of investing 10s of thousands into clean energy. I'm basically paying a decade of utility bills up front in order to burn less co2.
1. PG&E adds a monthly surcharge that disproportionately affects those with high incomes
2. This makes those with high incomes switch to off-grid to avoid the surcharge
3. Assuming that high-income is a decent proxy for politically influential, now nobody who is politically influential cares if the grid is properly maintained
4. The poor now have an unreliable grid, while the wealthy are off-grid.
This is about incentivizing folks to switch from natural gas appliances to electric appliances.
Anyone in the thread who is saying the plan is "insane" clearly doesn't understand it. There are plenty of reasons to discuss why it's imperfect, but the folks screaming bloody murder obviously haven't looked at it or considered the second-order effects this will create.
I see in this a subliminal message - "We are full. Move out of the state."
There is not enough electricity for everybody, and it seems like conservation is not an option. So these companies will try to squeeze the working class even more. The problem, there is not enough juice left for me to give.
> There is not enough electricity for everybody, and it seems like conservation is not an option.
That is not the issue. The issue is that distributed generation (i.e., rooftop solar) has become so popular that charging only by per-kW charges has become a subsidy from working class (who are less likely to participate in such generation) to wealthier segments who do.
> So these companies will try to squeeze the working class even more.
This proposal would reduce total bills for the working class, by splitting the rate into a mix of fixed fee and a (lower than current) is per-kW rate, and giving the working class a discount on the fixed fee.
It would raise total costs for those generating their own power (because of lower per-kW rates) and for the wealthy (who would pay above the average cost on the fixed fee, and particularly on people who are both.)
This would reduce the incentive to new distributed generation slightly (but then, given that both widespread adoption has been achieved and there is now a residential construction mandate for that, the effect of incentives is less.)
> This proposal would reduce total bills for the working class.
I sure hope so, but I still doubt whether it will happen. I'm sorry for my ignorance on the topic, and I need to research it more. But it is counter-intuitive to me.
We pay much more than the rest of the country already. We are the utility's source of revenue. We should get a fair price if we generate enough electricity through solar and other means by switching to market rates.
Why can't they just adjust the expense for those who generate electricity? Or directly lower the incentive by removing tax cuts and credits since the widespread adoption is ongoing anyway. I am still trying to understand why I have to share costs with wealthy people without clear benefits.
> I am still trying to understand why I have to share costs with wealthy people without clear benefits.
You aren’t sharing costs with wealthy people.
The proposal is to split rates into fixed connection costs and variable electricity costs, rather than, as the status quo does, lumping it all into the latter and setting rates high enough that on average the connection costs are covered by the surplus of the per-kW charges.
The effect of the status quo is that net metering over-rewards net-metered distributed generators (which was a plus to drive adoption, but no longer needed an excess incentive because of widespread adoption and a construction mandate) but it also creates an artificial disincentive to moving residential natural gas use to cleaner electric and against moving gasoline vehicle use to cleaner BEVs.
Dropping the per-kW rates and separating out the connection charge deals with that problem.
> Why can't they just adjust the expense for those who generate electricity? Or directly lower the incentive by removing tax cuts and credits since the widespread adoption is ongoing anyway.
Because distributed generation is only part of the issue, and that doesn’t deal with the disincentived to electrification of current fossil fuel use created by the currently-inflated per-kWh charge.
> We should get a fair price if we generate enough electricity through solar and other means by switching to market rates.
proposal asks you to pay not for electricity, but for maintaining grid infra, which they keep for you even you don't utilize it much. Cut yourself from the grid and you will pay nothing.
> This proposal would reduce total bills for the working class.
Not hardly. 180k household income is working class in California. This will drastically increase bills for many working class folks, those same working class that has been screwed over already with the lie sold about solar reducing costs. Because let’s be realistic here, a vast majority of people that installed solar did it for electricity bill reduction. It did, until this years.
This state is simply and completely captured by industry. We should not be passing laws to boost profit for a for-profit company.
Nothing more California than funneling middle-class money upwards under the pretense of doing it for the poor. Taxing people to pay other people's PG+E because PG+E is too expensive is asinine, its just a windfall for PG+E with no economic justification.
The correct lesson is to make power (et al.) affordable[0]: Tax people to make electricity cheaper - sure, but cheaper prices would mean PG+E makes less money.
For most months, this would raise my bill by 50%. Easy solution though, I simply won't tell my electric company what my income is. Surely the government won't hand over this info, right? Right?
> Easy solution though, I simply won't tell my electric company what my income is. Surely the government won't hand over this info, right? Right?
I don't know about PG&E specifically, but Equifax et al. have subsidiaries like The Work Number to get your income from employers and share it with whoever asks. The government isn't handing over anything-- even they go through Equifax when verifying income for food stamp eligibility.
Is there a way to fight it? I sent a message to our state reps. (Gov. Newsom, Sen. Becker and Assembly member Berman) but can't think of anything else.
Tier 1 rate for me is currently about $0.35/kwh and tier 2 about $0.41/kwh from PG&E. They don't directly tell you the transmission cost, but about $0.145/kwh comes from generation.
For my 1 br apartment living alone the total bill has been about $100-$150 but can jump to up to $250 during summer months. Sounds like this will almost double my costs for most of the year.
Every business wants to price discriminate in order to capture consumer surplus as revenue. This is just another way for PG&E to leverage their monopoly to price discriminate.
Seems like a poorly planned and badly designed program to me.
It introduces fixed fees to bolster a private utility with little oversight.
I struggle to understand why California allows its utilities to behave the way they do.
Any time the vested interest is saying that its own pricing structure is unjust and needs to be amended... and that the change is "unlikely to increase or decrease its profit" you should be reeling from the amount of bullshit in the air.
One part of the article says that there will be a single flat fee for low income residents, but later the same article says that the there will also be a variable charge based on usage. So which one is it?
I spent some time digging into this a while back. I think this is a really poorly thought-out policy, in part b/c it's conflating three separate issues:
1. Low and moderate income families should be able to afford their energy bill, and the "basic" energy use going forward may need to be higher esp as people need AC more of the year, etc.
2. There's a push to move people off natural gas appliances and onto electric appliances sooner rather than later, with the intention that eventually almost all of that electricity would be from green sources, and similarly to encourage people to switch to EVs. In order to do that, they partly want the marginal cost of electricity to be lower for everyone, even for people who end up paying more per month than they do currently. Everyone's supposed to feel an incentive to switch appliances.
3. There's a claim that the current pricing structure means that people with PV setups aren't paying their fair share for grid/infrastructure maintenance. Paying ~$0 for power b/c you use ~0 kwh shifts the 'burden' for maintaining the grid to people that don't have the ability to install solar.
You can be in support of point 1 ... but we already have subsidies for low-income residents. If we need to expand those, we should have those conversations!
But part 2, lowering the marginal cost of power by use has multiple downsides:
- it _does_ penalize people who conserve energy. My own PG&E bill may roughly triple, in a small, well-insulated urban condo without AC. And because the income brackets are _so wide_, someone who makes substantially more money and who uses substantially more energy (e.g. private pool, EV, large house) can see their bill _decrease_ due to this change!
- it's not clear that incentivizing people to replace appliances (or vehicles) before the end of their useful lives is a net carbon-saving move; the intrinsic carbon is real
- for the medium term, a substantial fraction of CA power does still does come from natural gas; increasing home electricity use which does not replace home natural gas use (e.g. just running your AC more days b/c it becomes cheaper) will in some cases mean _more_ emissions
- as an incentive structure, it's not even clearly effective; e.g. landlords won't be pushed meaningfully to update appliances which would lower their tenants energy bills
- if it worked really well, and everyone tried to move to all electric appliances and EVs next year, the grid may not be able to handle it anyway
Part 3 is a concern, but I don't think this is the way to address it. This says that people making over 180k would be paying up to $1536 just to be connected to the grid, before they draw their first kwh of power. People who are within reach of generating enough power to live off of will be nudged to consider disconnecting entirely. If they take that exit ramp, are the rest of us better off in any way?
Lastly, of course, a fee that basically everyone in the state will be obliged to pay, which is based on income ... seems a lot like an income tax, but it's going to a private company. In my case, that company is a felon with multiple convictions.
I have PV panels, no AC and gas appliances (except for dryer, which I run only at off-peak). This will easily quadruple my electric bill, and definitely nudge me towards looking at off-grid options more seriously (battery storage was already on my radar since we lose power dozens of times a year).
I draw benefits from a number of federal entitlements, and that means I need to supply full details of my financial records to these offices on a regular basis. This includes paystubs, bank statements, letter of income from friends or family.
Whenever I fill this stuff out, I feel vulnerable and exposed. This is way more than anyone needs to share with the IRS or anyone else. I've declined financial assistance from hospitals because they'd need to dig deeply into my finances the same way.
This may be a great way to tax the rich and stick it to Elon Musk, but I feel like any such program had better be optional, and what happens to all those juicy financial records they receive, when they start leaking?
Yep, I would bet the state revenue service will set up a system that allows the utility company to query income information and go off of that. If they don't already have the customer's SSN they will have to collect that, but I'd guess they already have it (in part so they could run a credit check).
