Republican state senators have asked California Gov. Gavin Newsom for his assistance in changing a law requiring utility regulators to charge customers based on income, in what critics are calling a “hard work utility tax.”
Recently authorized by the California Public Utilities Commission, the state’s three investor-owned utilities, including the Pacific Gas and Electric Company, better known as PG&E, will be permitted to implement their proposed graduated charges determined by income starting in July 2024—with the lowest charges for households earning up to $69,000 annually, higher for those earning up to $180,000, and the highest for those making more.
It remains unclear how income verification will occur, potentially conducted by utility companies, regulators, or a third party, although critics have expressed privacy and data collection concerns.
Utility commissioners are appointed by the governor and certified by the Legislature, which is currently controlled by a significant Democratic Party supermajority in both chambers.
“One-party control is never good,” Mr. Dahle said. “If people love California, they can thank the Democrats, and if they don’t like what’s happening, they can blame the Democrats, because Republicans don’t have enough weight here to move things.”
With an election year approaching, the senator said the economy and high energy prices could influence voters.
“Hopefully, people wake up and realize they need to vote differently if they want a different outcome than what they’re getting,” he said. “And when people are looking at their bills, it doesn’t matter if you’re Democrat or Republican—it hurts.”
Lawmakers report regular complaints from constituents about the high price of utilities affecting their ability to pay bills, and one senator said more needs to be done to protect families.
“Yet again, California is making a high quality of life unaffordable for the average family,” state Sen. Rosilicie Ochoa Bogh, a Republican, said in a Nov. 27 statement. “As parents and families preparing for the holiday season, we shouldn’t have to worry about unexpectedly high utility bills in 2024.”
“The [utility commission’s] authorization to implement pricing is not new, but the requirement for an income-graduated charge by July 2024 is the result of a rushed and largely party-line adoption in a 2022 budget trailer bill,” the senators wrote.
Such bills bypass discussion in legislative committees or on the floor of either the Assembly or the Senate and are done out of sight of the public, resulting in limited oversight.
At issue is Assembly Bill 205, which was introduced in early 2022 as a budget bill and then amended later that year to include language requiring utilities to structure their billing programs using income levels.
“Anytime there’s a bill that’s done as a trailer bill, we’re watching it,” Mr. Dahle said. “Their agenda gets moved through without a lot of daylight getting shed on it.”
In their letter, lawmakers noted the goal of creating a stable and safe energy grid while finding ways to lower rates—suggesting that the current plan would result in some customers paying more so that others can pay less—and that such would ultimately lead to higher costs for families.
“More fees are not a solution to already ridiculously high utility bills,” the senators said in the letter. “California ratepayers remain subject to a hastily crafted policy change that will be intrusive, unfair, and costly to implement.”
Urging caution, lawmakers requested a comprehensive review of the implications and potential consequences of enacting such a change.
“A change of this magnitude to the electricity rate structure should be more thoroughly vetted and subject to public discussion,” the senators advised Mr. Newsom in the letter. “Implementation of this requirement should be delayed, if not suspended, until the impacts of the proposals may be further assessed.”
Senate minority leader Brian W. Jones, a Republican, echoed the call for addressing the matter and said a repeal is in the best interest of Californians.