Californians are feeling the pinch as three of the state’s electric utility companies have proposed a fixed–rate billing plan which would see high–income households paying more than their lower–income counterparts.
The plan was approved by California Democratic Gov. Gavin Newsom last summer and requires energy utilities to impose a “rate component” in their power bills to collect revenues to fund the state’s energy infrastructure. Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric have all proposed a plan to reduce fees for most households by imposing higher costs on wealthier families.
The plan would impose a fixed monthly charge on households depending on their income. In SCE and PG&E areas, households with an income less than $28,000 per year would pay $15, those with an income between $28,000 and $69,000 would pay $20, and those with an income between $69,000 and $180,000 would pay $51. The most severe monthly fees would occur for households with an income above $180,000, who would pay $85 in SCE areas, $92 in PG&E areas, and $128 in SDG&E areas.
While the plan is aimed at providing bill relief to those who need it most, some have expressed concern over the potential for further financial burden on those who are already struggling to make ends meet. Meanwhile, critics of the plan have pointed out that California is already one of the most heavily taxed states in the country, and that the plan would disproportionately burden the wealthy.
The proposal comes on the heels of a failed millionaire tax hike on a ballot measure during the midterm elections, as well as the approval of a “mansion tax” for the sale of certain luxury real estate. There is also a “worldwide wealth” tax proposal currently being considered, which would impact both current and former California residents.
With the plan yet to be approved by the California Public Utilities Commission, it remains to be seen whether the fixed–rate billing plan will become a reality. In the meantime, Californians must wait and see how their bills will be impacted.