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AB 327 poised to change how California sets electricity rates

A Southern California Edison sign outside the San Onofre Nuclear Plant.
A Southern California Edison sign outside the San Onofre Nuclear Plant.
Grant Slater/KPCC

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Sacramento lawmakers are nearing final approval on a wide-ranging bill that would change how energy rates are set for California’s privately owned utilities. It would also likely save people in places like the Inland Empire some money. 

The original idea of AB 327 was to protect the little guy: Fresno assemblyman Henry Perea, an author of the measure, says low and middle income customers are feeling the pinch of a 12-year-old problem.

"Right after the energy crisis the legislature decided that ratemaking should be done in the legislature rather than the PUC," Perea says. 

The PUC, or Public Utilities Commission, has had limited authority since 2001 to boost basic rates. Greenlining Institute’s Stephanie Chen, an advocate for low-income communities, says that has created long-term problems nobody planned for. 

"We’ve seen all of the cost increases which have included basic infrastructure upkeep, labor costs, costs to provide renewable energy, and just general increases have fallen on the higher tiers of usage," she says. 

Chen means anybody who uses a lot of electricity. Folks in San Bernardino who use window box air conditioners all day or Palm Springs Tennis resorts with lighted courts. They’d both get a break on their Southern California Edison bills. At the same time, Edison has lobbied for a fixed fee, up to 10 dollars a month, be added to most peoples’ bills. Perea says that fee would pay for upkeep for the grid.

"We should all have some skin in the game in terms of maintaining the infrastructure, so that the burden doesn’t fall more on one group of ratepayers than another," Perea says. 

The Sierra Club says that charge will discourage renewable energy and reduce the value of home rooftop leases for solar. But Greenlining’s Chen says the public utilities commission can protect customers and renewables both.

"Nobody wants to see solar customers who have done the right thing for California’s environment get the rug pulled out from under them," she says. "But at the same time, we want to make sure our system is both fair to people who have solar and people who don’t.

Consumer advocates, the utilities, and solar providers say regulators -- not legislators -- should strike that balance, and will, if this bill becomes law.