HomeMy WebLinkAbout2024-05-21; City Council Legislative Subcommittee; ; California Public Utilities Commission Update Meeting Date: March 21, 2024
To: Legislative Subcommittee
From: Jason Haber, Intergovernmental Affairs Director
Staff Contact: Jason Haber, Intergovernmental Affairs Director
jason.haber@carlsbadca.gov, 442-339-2958
Subject: California Public Utilities Commission Update
District: All
Recommended Action
Receive an update on the California Public Utilities Commission’s policy and regulatory work,
including a recent decision to implement income-graduated fixed charges for Californians' electric
bills, as required by Assembly Bill 205 (2022), and provide feedback.
Discussion
The California Public Utilities Commission’s Local Government Liaison will provide an update on the
Commission’s policy and regulatory work concerning the telecommunications, energy,
transportation, and water industries, including an overview of the Commission’s decision to
implement income-graduated fixed charges for Californians' electric bills, as required by Assembly
Bill 205 (2022).
Next Steps
None.
Exhibits
1. California Public Utilities Commission Fact Sheet: What is the California Public Utilities
Commission
2. California Public Utilities Commission Fact Sheet: Proceeding R.22-07-005
LEGISLATIVE SUBCOMMITTEE
May 21, 2024 Item #3 Page 1 of 7
What Industries Does
the CPUC Regulate?
Energy – Electricity and Natural Gas
The CPUC regulates investor-owned electric and natural gas utilities.
The CPUC ensures the reliability and safety of electric and natural gas
systems, and works to advance renewable energy and climate goals.
Transportation – Rail and Passenger Carrier Safety
The CPUC oversees the safety of railroads and rail transit systems,
for-hire passenger carriers (limousines, airport shuttles, charter and
scheduled bus operators) and Transportation Network Companies
(Lyft, Uber).
Telecommunications
The CPUC develops and implements policies for the telephone
communications and broadband markets, including ensuring fair,
affordable universal access to necessary services.
Water
The CPUC is responsible for ensuring that investor-owned water
utilities deliver clean, safe, and reliable water to their customers at
reasonable rates.
What is the California
Public Utilities Commission?
The California Public Utilities
Commission (CPUC) regulates
services and utilities, protects
consumers, safeguards the
environment, and assures
Californians’ access to safe and
reliable utility infrastructure
and services.
To learn more about the
CPUC, please contact the
News & Outreach Office at
outreach@cpuc.ca.gov
505 Van Ness Ave.
San Francisco, CA 94102
415-703-2782
800-848-5580 (Toll Free)
cpuc.ca.gov
0322
Exhibit 1
May 21, 2024 Item #3 Page 2 of 7
How Can the CPUC Help Me Resolve My Issues?
Our Consumer Affairs Branch (CAB) can help if you have a problem
with your utility bill or service that you are unable to solve directly with
your utility company. You can contact CAB in three different ways:
CALL: 800-649-7570
FILE a complaint online:
www.cpuc.ca.gov/complaints
WRITE a letter to:
CPUC Consumer
Affairs Branch
505 Van Ness Ave.
San Francisco, CA 94102
Staying Informed:
Where Can I Find Information About CPUC Proceedings and Events?
DOCKET CARD:
www.cpuc.ca.gov/Docket
Search for documents related to
CPUC proceedings.
OPEN PROCEEDINGS:
www.cpuc.ca.gov/proceedings-and-
rulemaking Monthly updates of
proceedings currently open at the
CPUC.
SUBSCRIPTION SERVICE:
subscribecpuc.cpuc.ca.gov
Receive email notifications when
documents such as press releases are
published.
SERVICE LIST:
www.cpuc.ca.gov/service-lists
Receive ongoing communication about
a specific proceeding.
DAILY CALENDAR:
www.cpuc.ca.gov/DailyCalendar
Follow hearings, meetings, workshops,
and how to access CPUC events
remotely.
MONTHLY NEWSLETTER:
www.cpuc.ca.gov/newsletter
Subscribe to receive our newsletter by
email, or read it online.
Getting Involved:
Does My Voice Matter to the CPUC?
Yes, your voice matters! We want to hear from you to help us make decisions that
reflect all Californians’ concerns and perspectives.
• Comment on an Issue: You can make comments on proceedings on the Docket
Card at www.cpuc.ca.gov/Docket, where you can also read the comments of
others. You can also give oral comments at Public Participation Hearings and at
other CPUC meetings that have designated public comment sessions, or email us
at public.advisor@cpuc.ca.gov.
• Become a Party: You can become a party to a CPUC proceeding to participate
formally in the decision-making process.
For more information, contact the Public Advisor’s Office:
VISIT: www.cpuc.ca.gov/pao
CALL: 866-849-8390
EMAIL: public.advisor@cpuc.ca.gov
How Does the CPUC Work with
and for Communities?
The CPUC has several
programs to reach different
people and groups so that we
can meaningfully involve them
in CPUC proceedings and
decision-making.
Our Consumer Affairs Branch helps resolve
disputes between customers and their utility
company.
Our Public Advisor’s Office provides
information, advice, and assistance to individuals
and groups who want to participate in CPUC
proceedings.
Our Business and Community Outreach
Office builds relationships with community
organizations and local governments, working to
keep them informed and involved with CPUC
programs and policymaking.
Our Small Business Program gives small
businesses opportunities to contract with the
state and utility companies, and keeps them
informed about important issues and policy.
Our Supplier Diversity Program successfully
encourages utilities to spend more than 20
percent of their contracts to business owned
by women, minority, lesbian, gay, bisexual and
transgender (LGBT), and disabled veterans.
Our Low Income Oversight Board helps
ensure the CPUC and utility companies serve
low income customers with helpful programs
and partnerships.
Our Disadvantaged Community Advisory
Group advises the CPUC and our partners
at the California Energy Commission on
issues related to environmental justice and
social equity.
Our Telecommunications Access for the
Deaf and Disabled Administrative Committee
advises the CPUC about the provision of
telecommunications equipment and relay
services for persons with functional limitations
of hearing, vision, movement, manipulation,
speech, cognition, and interpretation of
information.
May 21, 2024 Item #3 Page 3 of 7
1
After the billing
adjustment, an
average Fresno
customer will save
$33 over the
summer months
ENERGY DIVISION FACT SHEET
May 9, 2024 | Proceeding R.22-07-005 | www.cpuc.ca.gov/R2207005
CPUC Decision Cuts Price of Electricity Under New
Billing Structure and Accelerates California's Clean
Energy Transition
As required by Assembly Bill 205, the CPUC has cut the price of electricity for Californians, reduced
electricity bills for lower income Californians and those living in parts of the state most impacted by
extreme weather, and accelerated the state’s clean energy transition.
The CPUC's decision changes how large investor-owned utilities (IOUs) bill residential customers for
infrastructure-related costs. All customers already pay the cost of building and maintaining the electric
grid through the price they pay for the electricity they use. The CPUC's decision moves these existing fixed
costs into a “flat rate” line item on bills. This change shrinks the price for a unit of electricity for all
customers, making it more affordable to electrify homes and vehicles, regardless of income or where
someone lives.
This billing structure does not impose any new fees—it simply reallocates how existing costs are shared
among customers. It also aligns California with most other states. The new billing structure goes into
effect late 2025 and early 2026.
How it Works:
Cutting the Price of Electricity for All Residential Customers
Under the new billing structure, a residential customer bill will have two parts:
Usage Rate. The usage rate is the price you pay for
a unit of electricity
•The CPUC's decision cut the usage rate by 5 to
7 cents per kilowatt hour, making electricity
cheaper.
• The usage rate will continue to vary
throughout the day to encourage conservation.
Flat Rate
•The CPUC's decision moves some costs
currently collected in the usage rate to a
separate line item called a flat rate.
•The flat rate includes the cost of infrastructure
that connects all customers to the grid, such
as wires and transformers that send power to
and from your house so everyone can get
power whenever you need it.
Exhibit 2
May 21, 2024 Item #3 Page 4 of 7
CPUC Sets Flat Rate at Lower End of Stakeholder Proposals
•CPUC reviewed proposals from a dozen stakeholders, including flat rate proposals up to $73 per
month.
•The CPUC's decision set the flat rate at $24.15 per month, which will reduce the price of a unit of
electricity by 5 to 7 cents per kilowatt-hour.
CPUC Brings California Utilities in Line with State and National Trends
•California is one of the only states where investor-owned utilities do not have flat rates for infrastructure
and maintenance costs. For example, some utilities in Texas have flat rates up to $39 per month.
•Almost all publicly-owned utilities in California have flat rates.
•At $24.15, the flat rate is the same amount as SMUD’s flat rate.
Comparison of
Proposed Flat Rates
CPUC Flat Rate
Compared to
California Publicly-
Owned Utilities
2May 21, 2024 Item #3 Page 5 of 7
3
California is Currently Not Aligned with the Rest of the Nation
Source: Borenstein and Bushnell, National Bureau of Economic Research, “Do Two Electricity Pricing Wrongs Make a Right? Cost
Recovery, Externalities, and Efficiency” (Rev. Sept. 2018) Fixed charge is another term for flat rate.
Encouraging Electrification:
Going Electric Is More Affordable for All
• The CPUC's decision reduces the price PG&E, SCE, and SDG&E customers pay for each unit of
electricity.
•All customers, regardless of income or location, will be better off financially if they choose to electrify
their homes and/or vehicles under the new billing structure compared to today’s rates.
•The decision accelerates the state’s transition to 100% clean electricity.
Improving Affordability:
Discounts for Low-Income and Affordable Housing Customers
•As directed by AB 205, on average all low-income customers will save on their monthly bills.
• Customers enrolled in the California Alternate Rates for Energy (CARE) low-income assistance
program will benefit from a discounted flat rate of $6 per month.
»Approximately 30 percent of IOU customers currently participate in CARE.
•Additionally, customers enrolled in the next level up of income qualified program, the Family Electricity
Rate Assistance (FERA), as well as those residing in deed-restricted affordable housing with incomes at
or below 80% of the area median income, will qualify for a discounted flat rate of $12 per month.
A customer that electrifies their home and vehicle
will save on average $28-44 a month compared
to under today’s rates.
For example, a San Francisco customer
that electrifies will be roughly $32 better off
each month.
May 21, 2024 Item #3 Page 6 of 7
4
Other Key Elements of Proposal
• No Income Verification Required. The CPUC's decision does not require any customer to verify their
income. Existing programs like CARE and FERA already establish income eligibility through
enrollment in programs like MediCal and SNAP or through a voluntary income self-attestation
process followed by audits.
• All Customers Included. All residential customers, including those with rooftop solar, will transition
to flat rates. Rooftop solar customers consistently rely on grid infrastructure. They draw electricity
from the grid and send electricity back to the grid throughout the day to balance their usage with
intermittent solar production. Additionally, they need grid support to meet energy needs during
nighttime or when solar panels are not generating power.
• No Profit Increase for IOUs. The decision ensures that utilities cannot increase the costs they collect
or make any profit. Instead, it redistributes costs associated with running the electrical grid in a more
equitable manner on customer bills.
• Approval for Other Utilities. The decision also approves a flat rate for Bear Valley, Pacificorp, and
Liberty utilities, agreed upon by the ratepayer advocacy group California Public Advocates, that
ranges from $23.40 to $33.98 for residential customers.
May 21, 2024 Item #3 Page 7 of 7