Nash is chair of the Black American Political Association of California, San Diego Chapter, and lives in Southeast San Diego.
Every day in my work with underserved communities, I hear stories of working families struggling to get by in America’s Finest City. With the rising cost of housing, food and other necessities, families are feeling financial stress when they open their monthly bills. Nowhere is this more apparent than with electric bills. Electricity is a necessity that none of us can live without, so it’s critically important for it to remain affordable.
Update:
2:50 p.m. Jan. 29, 2024San Diego Gas & Electric says it contributed to the Black American Political Association of California, San Diego Chapter, in the amounts of $5,000 in 2020 and $5,000 and $2,500 in 2021.
Fortunately, there is a solution on the horizon to address energy affordability, but, unfortunately, many are trying to kill this solution with misinformation and overheated political rhetoric.
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The California Public Utilities Commission (CPUC) is currently reviewing proposals for a tiered, fixed-price structure, as directed by state legislation. This important reform was brought forward to bring greater predictability to monthly energy bills, lower the per kilowatt-hour charge for everyone, and help provide financial relief to working families.
Opponents to this approach will tell you the new pricing structure will result in more profit for energy companies. In fact, the fixed charge is not an add-on to our utility bill. Rather it would replace a portion of the existing charges — primarily the cost of delivering electricity to consumers.
These critics will also tell you that your local energy company wants your household income data. The truth is, SDG&E and other regulated energy companies have explicitly stated that they do not want to collect income information from customers to implement this reform. The utilities’ current proposal leverages enrollment data for existing financial assistance programs to structure the pricing tiers. The income information provided by customers on the applications for existing energy bill discount programs (California Alternate Rates for Energy or CARE and Family Electric Rate Assistance or FERA) would be used as the basis to determine what level of fixed charge a customer would pay. Without the need for utilities to collect income information from customers, families who qualify for CARE and FERA would also benefit from more bill predictability and financial relief under a fixed charge reform.
With approximately 3 million Californians enrolled in CARE and 80,000 enrolled in FERA, this proposed rate reform will have widespread benefits for low-income customers. Under SDG&E’s proposal, the lowest-income customers enrolled in the CARE bill discount program would pay a $24 monthly fixed charge. All other customers enrolled in the CARE and FERA bill discount programs would pay $34 a month, and everyone else would pay $73 a month.
Under the current pricing structure, you pay a price for every kilowatt-hour of electricity used, but the price is not just for the cost of generating the electricity. It’s also for building, maintaining and operating the infrastructure (poles, wires, substations) to deliver the electricity to customers, as well as numerous social benefit programs. Collecting more of these costs in a fixed monthly fee rather than based on usage will help stabilize monthly bills.
Electric rates are used to pay for all sorts of mandates, like investments in technology to prevent wildfires, improving energy efficiency and building out the grid to support electric vehicle charging. Today these costs are not shared evenly. As more households adopt rooftop solar to offset their monthly electric bills, they contribute less to these programs, leaving those who cannot afford solar paying an outsized portion of these expenses.
There is one more misconception about the fixed-price proposal that I’d like to address. Some have argued that it will disincentivize conservation. Not true. Customers will continue to pay a portion of their electric bill based on consumption. In other words, you will still see savings if you reduce usage. Conservation has always been an important part of our daily electric use and will continue to be under this program. It’s incumbent upon community organizations and utilities to continue to educate the community on this important aspect and the resources available to help reduce household electricity use.
A tiered, fixed charge aligns with our state’s values of social justice, equity and fairness. This is something that is essential in our society and essential to folks who deserve thoughtful policies to empower those who have been ignored for a long time. This pricing reform will help the communities that desperately need financial relief. I stand with over 5,000 San Diegans and 25 local community organizations who have joined the Predictable Power Coalition in urging the California Public Utilities Commission to not delay the implementation of this important reform. And I encourage anyone who agrees to do the same by visiting predictablepower.org.
