Last year the California Legislature passed a bill (AB 327 - Perea) granting the California Public Utilities Commission (CPUC) the ability to make broad changes to how the state's investor owned utilities (PG&E, SCE, and SDG&E) charge customers for electricity. In his departing comments (PDF) from the CPUC, former Commissioner Mark Ferron observed that the bill was "a poisoned chalice" because "the Commission will come under intense pressure to use this authority to protect the interest of the utilities over those of consumers and potential self-generators, all in the name of addressing exaggerated concerns about grid stability, cost and fairness."
Sure enough, that intense pressure has begun. Utilities are now asking the CPUC to significantly change rates that would hurt low-income customers and, as an analysis by the Sierra Club demonstrates (PDF), cripple the market for rooftop solar and efficiency upgrades. At public meetings throughout the state, hundreds of Sierra Club members, clean energy workers and consumers are speaking out against the proposed changes.
Speaking out against utility proposed rates at a public participation hearing in Fontana
What Utilities Want: Fixed Charges and Flat Rates
Currently, electricity rates are "tiered" so the more you use, the more you pay. Initial consumption is charged at a low rate, with rates increasing significantly with energy use. This structure rewards conservation and is in large part responsible for the rapid growth of rooftop solar in California because it makes energy-savings investments economic for customers with high energy-usage. Energy bills are also almost entirely tied to the amount of energy consumption with few unavoidable fixed charges.