California Tries Charging for Electricity Based on Income

Marc JoffeIn California, private sector innovation is giving way to public sector experimentation. From the state that pioneered special gasoline formulations, cap ‐​and‐​trade, and natural gas bans, we now have income‐​based electricity billing. While this idea may seem like a reasonable response to the problem of moderate‐​income families being priced out of the state, a better approach would be to tackle the underlying causes of high energ y prices.A2022 state law instructed the California Public Utility Commission (CPUC) to replace a  flat monthly charge for the fixed costs of providing electricity with an income‐​graduated charge. Californians with very low incomes already receive a discount on their fixed charges under the existing California Alternate Rates for Energy (CARE) program, but the new law requires at least th ree new levels. The state’s major utilities have proposed income‐​based rate structures to CPUC. For the most expensive utility, San Diego Gas&  Electric,monthly fixed charges would vary from $24 for customers under the Federal Poverty Level (FPL) to $128 for users earning more than 650% of FPL, which, in 2023, is $119,000 for a  couple with no kids. So, on an annual basis, upper middle income energy users will pay $1248 more than those on the most modest incomes.Implementation of this scheme will raise both fairness and privacy concerns. California and the federal government already have progressive income tax system...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs