by Katy Grimes, E&E Legal Senior Media Fellow and California Globe Editor
As Appearing in the California Globe
Trying to shoehorn an income component into utility rates converts ‘ratepayers’ into ‘taxpayers’
Last week the Globe reported that Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric had just filed a proposal to create income-based utility billing.
Currently, utility bills are based on electricity and gas consumption. The utility companies are now proposing income-based utility billing so that higher-income earners pay for more than they use, subsidizing the rates for lower income customers.
This outrageous proposal isn’t the only of its kind. The Biden Administration is proposing a tax (penalty) for having good credit. Mortgage borrowers with good credit will pay higher fees so borrowers with lower credit scores can get loans.
We reported on a 2021 report from the University of California at Berkeley recommending that the state link California’s highest-in-the-nation electricity bills to customer incomes – ie. your ability to pay.
Authors Severin Borenstein (an economist), Meredith Fowlie, and Jim Sallee of the UC Berkeley and the Energy Institute at Haas admit that California’s electricity rates are so high, lower-income households pay a larger share of their income on electricity.
Rather than using all available energy sources to create energy abundance, the Berkeley report proposes “cutting back on the volumetric per-kilowatt-hour charges on customers’ bills and recovering the missing money through constructs tied to customers’ income.”