California’s hated electric bills will soon be based on your income. Will it work? | Opinion
The concept of an electricity bill based on your tax bracket is entirely foreign to the American consumer experience. It might smack of an invasion of privacy. Big Brother even. So of course, California is going to implement one for those who get their electricity from investor-owned utilities such as PG&E and Southern California Edison.
A year ago, this idea surfaced in a budget trailer bill with little public discussion. It was hastily approved by the California Legislature. Signed by Gov. Gavin Newsom, the legislation puts California on a pioneering path to be the first state to factor wealth into this unpopular monthly bill.
Implementation of this groundbreaking plan is still at least a year away as it will be debated before the Public Utilities Commission until the PUC must adopt something by July 1, 2024. The PUC regulates the investor-owned utilities such as PG&E. (Sacramento Municipal Utility District customers and other Californians who get their electricity via public power agencies, will not be subject to income-based electric bills).
Opinion
The aim is to make electricity bills more equitable for Californians and because of this, the idea deserves a chance. But the man behind it all was unaware that the Legislature and Newsom would turn his proposal into a groundbreaking state law.
“I was shocked,” said Severin Borenstein, the originator of this taxation idea and the faculty director at the Energy Institute of the Haas School of Business at the University of California, Berkeley. “We were not consulted.”
Borenstein argues persuasively that a typical Californian’s electricity bill today is already a form of taxation.
It is not commonly understood that middle- and lower-income Californians are being disproportiona tely taxed for broader societal investments that the utilities are responsible for, such as hardening the grid against wildfires, underwriting energy efficiency programs and incentivizing solar panels on residential rooftops.