Cap the utility tax! Then, make companies stop picking our pockets to fund climate change denial.

(Indivisible CA Green Team ) “We need to fight the Utility Tax all the way. Currently, it is uncapped, which means $24/month is just the start. Utilities have been clear that their intention is have the utility tax rise to $80 a month or more!” Related and just as bad – utility companies use our money to pay for lobbying to ensure that we never actually get affordable clean energy.

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BECAUSE OF “FURIOUS CONSTITUENTS BLOWING UP THEIR PHONES”, a group of Democratic lawmakers, including Assemblymember Jacqui Irwin, introduced AB 1999, which would cap their tax at $5 for low-income folks, and $10 for others. Then it was “quietly shelved in the Assembly without receiving a single vote,” thanks to Assembly Speaker Robert Rivas.

(Revised 05/10/24) BECAUSE OF YOUR CALLS, AB-1999 IS BACK! – with a compromise – it caps the Utility Tax at $24 a month, limits increases to inflation, and sunsets the tax after three years. Yes, it’s still twice the national utility tax average, BUT IT IS CAPPED! That means it can only rise with the cost of inflation and cannot jump to $70 or $100 a month without legislation (PG&E wanted to START with $92!), and puts the whole process in the public eye. Even with this compromise – a “YES” vote is not an easy lift and the results will be felt by low and medium users first. (Check out the chart below under “Deeper Dive!”) Tell your legislators that you are tired at the endless price-gouging of investor-owned-utilities (IOU) like PG&E!

VOTING IS WEDNESDAY 5/15! Make your calls on Monday and Tuesday!!!

Part #1: “BLOW UP THE PHONES” of Assemblymember Speaker Rivas, who derailed AB-1999

Assemblymember Rivas (Annoy him every day if you can!): 916-319-2029 My name is ________. I am a Californian Constituent [or I live in your district]. I’m calling Assemblymember Rivas, as the Speaker of the California Assembly to thank him for agreeing to an amended AB 1999 get a fair hearing. Show us your leadership by encouraging Assembly members to vote “YES.”

Part #2: Make sure our assemblymember and state senator get involved!

– Pick the script for YOUR assemblymember!:

  • MY assemblymember supported AB 1999: (Irwin, Addis, Berman, Connolly, Muratsuchi, Papan, Pellerin, Quirk-Silva, Ting, Ward, Weber, Bauer-Kahan, Senator Wiener, Boerner, Bonta, Friedman, Lee, Low, and Maienschein) : I’m calling from [zip code] and I want to thank Assemblymember [___] for their support of the original AB 1999. I was very upset at the undemocratic way in which it was killed and hope that you can support the amended version that manages to cap the the utility tax before the Legislature adjourns in August. Otherwise four million households will see their bills increase without any controls — and it won’t stop there. We’re tired of the utilities running the Legislature.
  • MY assemblymember hasn’t stated their support yet: (Bennett, etc…) I’m calling from [zip code] and I want Assemblymember [___] to know that I’m was upset at the undemocratic way in which the original AB 1999 was killed. and hope that you can support the amended version that manages to cap the the utility tax before the Legislature adjourns in August. Otherwise four million households will see their bills increase without any controls — and it won’t stop there. We’re tired of the utilities running the Legislature.

– Script for your state senator!:

  • Minimal script for your state senator: I’m calling from [zip code] and I want to Senator [___] to know that I’m very angry that CA has not yet passed a law to prevent utility companies from embedding their lobbying costs for climate denial into our bills. Three states have already made this illegal, but our bill, SB938, seems to have died in committee. We want this brought back to the floor, in a gut-and-amend, or however else necessary. Angry ratepayers brought AB-1999 back to the floor. We want you to support that as well. We’re not interested in allowing the utilities to fleece us for another year. Show us that the senator is on the ratepayers side, not the utilities.
  • State Senator Monique Limón (SD-19): email, SAC (916) 651-4019, SB (805) 965-0862, OX (805)988-1940 
  • State Senator Henry Stern (SD-27): email, SAC (916) 651-4027, Calabasas (818) 876-3352
  • https://findyourrep.legislature.ca.gov

Optional addition for any script above!

I would also like the [Assemblymember/Senator] to create a bill for our entire state to join the 49 million Americans in nearly 2,000 communities across the U.S. — including large cities like Los Angeles and Seattle, who rely on community-owned, not-for-profit electric utilities. We are tired of seeing obscene profits posted by investor-owned utilities, the grift of our money being spent on lobbyists to prevent us from getting affordable renewable energy, and fighting their constantly increasing fees.

Part #3. Email Governor Newsom. Our rant is included here. Make it sound like your own voice if you can. (https://www.gov.ca.gov/contact/)

Governor Newsom, Californians are tired of paying the higher prices demanded by predatory corporations!

Housing, already scarce, is being snatched away from first-time home buyers by Wall Street firms, and rented back to us at exorbitant rates. Lawrence Yun, chief economist for the National Association of Realtors said that “first-time buyers have essentially zero chance against [investor] cash buyers.” At least for now, we have no control over this.

As for food, price-gouging and “shrink-flation” by major manufacturers are causing a third of American households that receive food stamps to skip meals, eat less, or rely on food banks. Some food monopolies are still trying to hide their record profit levels behind bogus claims of “inflationary pressures.” Others, like PepsiCo, just say out loud that they can do what they want. We consumers have no control over this.

Oil companies no longer bother to pretend that inflation is behind their increasing prices. Oil giant BP reported its highest profit in 8 years – charging us more because they can. Once again, we have no control over this.

But with our utility bills, there’s supposed to be a process to bending us over, and an agency – the California Public Utilities Commission (CPUC) – to protect us ratepayers against rapacious corporate greed by requiring companies to prove their “just and reasonable” costs. They shirked their responsibility, granting PG&E a historic rate increase — more than $2.56 billion, despite its administrative law judge’s initial decision finding that PG&E’s evidence justified a much smaller rate hike. Then PG&E asked for $4 billion more for Diablo Canyon nuclear power plant costs, and the CPUC didn’t even bother with due diligence – ignoring its legal requirements for evidentiary hearings, including proof of PG&E’s asserted costs, testimony under oath and cross-examination of PG&E’s witnesses. Now, under the aegis of AB 205, investor-owned-utilities (IOU) can divide our bills into pieces, keeping charges for “usage” small, while the “flat rate” line is “uncapped” and which will explode in size from a low of $24 to $80 or more – and our commission won’t stop them or demand further evidence.

Until the commission killed our solar program and 17,000 jobs, we were a nationwide LEADER in renewable energy. So now:

Gov. Newsom – You had a chance to turn PG&E into a publicly-owned company after they literally killed people in the 2020 Zogg Fire. They didn’t deserve the grace you gave them to clean up their act. Now they are picking our pockets to support shareholders, overpaid executives, and lobbyists who are pushing climate change denial. Assemblymember Jacqui Irwin’s bill AB 1999 is a reasonable plan to cap their “flat rate” tax. It’s been recently revised from $10 to $24. SB938 lets CA join the three states who’ve already closed the flow of ratepayer money to lobbyists. Both of these bills have been stuck in their respective chambers. When that first bill comes with the new flat tax, and people learn they themselves are funding this corruption, they will be angry. You have tremendous influence with state legislators. Help get these bills to a vote! Then, be a hero and take over PG&E!

DEEPER DIVE – the oligarchs behind Project 2025 are not just interested in the demise of democracy on a federal level. We must remain vigilant to their profiteering incursions, including those by investor-owned-utilities, at state and local levels as well.

We’re not fooled: the CPUC’s Utility Tax will raise bills on four million working people and seniors, and discourage solar and energy conservation.

(From David Rosenfeld of Stop the Utility Tax) As expected, the monopoly utilities and their allies are suggesting that the CPUC’s $24/month Utility Tax is reasonable.

But we know a big Utility Tax is not reasonable, so thank you for being part of the coalition to stop the big Utility Tax and stand up to the monopoly utilities.

The impact of a $24/month Utility Tax is not complicated, and it’s not theoretical.

Starting in 2026, The CPUC’s $24/month Utility Tax will increase bills on four million households with a small energy footprint—renters, people living in small homes, and solar users. 

Here’s a great graph to show how this utility tax will affect low and medium users the hardest, while gifting the largest discounts to the biggest users. (Comment from I.V. – Not sure how this encourages conservation..and letting the less wealthy subsidize larger users seems basically…well, like how the GOP would like all programs to work.)(See full analysis by Flagstaff Research). As one can see, those on the CARE and FERA subsidy programs who live in small homes are not protected either – the Utility Tax will raise bills on most of those low-income households, too.

If AB-1999 ISN’T PASSED – $24/mo is the floor, not the ceiling.

The Utility Tax is completely uncapped. So are rates. There are no guardrails. No sideboards. The CPUC has a blank check and they are using it. Their proposed Utility Tax is more than double the national average—and that’s just the beginning. We’ve all seen this movie before. The CPUC will raise the Utility Tax and rates again, and again, and again.

The Utility Tax is a shell game.

It does nothing to address the real reason electricity prices are so high—out of control utility spending.
The real reason electricity prices are so high is out-of-control utility spending on transmission and distribution. The Utility Tax doesn’t touch this problem. It simply moves around who pays for what—and low energy users pay the price. 

This chart helps to show how out-of-control utility spending has been. What’s incredible is that peak electricity load has been relatively flat over the same time period.

Source: Richard McCann: Historic SCE Retail Rate Components: 1998-2023, February 2024, CAISO load line removed for clarity (full presentation)

So, why are the utilities and some other organizations pushing for a big Utility Tax?

  • For the utilities, a big Utility Tax means they get a guaranteed stream of income every month from every ratepayer, no matter how much energy they use. And then they still get to raise the rates. That’s certainly good for their pockets.
  • For certain groups, it might be monopoly utility donations. As the Peralta Federation of Teachers said in their letter on this issue: the “sheer scale and consistency of these utility payments tells a story about utility influence in California politics.”
  • For some, it’s the hope of electrification. Unfortunately, it will still be cheaper for consumers to stick with gas appliances under any of these proposals.
  • For others, it’s an unfortunate choice to focus only on median energy users, who won’t see a big bill impact at first. This ignores the fact that millions of people don’t live in median sized homes and don’t use median amounts of electricity. It ignores the fact that anyone with a small energy footprint will see their bills go up right away if this Utility Tax proposal goes live.

Why California’s plan to let PG&E charge you a fixed monthly fee is as flawed as it sounds.

Chronicle Editorial Board

“In June 2022, with little debate or opportunity for public input, California lawmakers approved and Gov. Gavin Newsom signed AB205, a sprawling, 21,000-word bill focused on energy policy. AB205 was a so-called “trailer bill,” a piece of legislation nominally attached to the state budget that’s often used to sneakily pass sweeping policies without going through the traditional legislative and public review process. Even lawmakers didn’t appear to fully realize what was in AB205 because once the California Public Utilities Commission began following through with what the bill directed it to do — establish a fixed monthly charge, dependent on household income, for all Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison customers — hell broke loose.

The utilities initially proposed a fee that could reach as high as $92 per month for PG&E customers. This set off shock waves for customers already reeling from a recent series of PG&E rate increases, which by the end of the year could result in the typical residential customer paying at least $53 more per month than in 2023.

With furious constituents blowing up their phones, a group of Democratic lawmakers introduced AB1999, a bill to cap a fixed monthly fee at $10.  That bill, however, was stalled without a hearing — apparently at the behest of Assembly Speaker Robert Rivas — clearing the way for the Public Utilities Commission’s vote scheduled for Thursday on a proposed decision that would set the monthly fixed charge at $24.15, $12 or $6, depending on household income, while lowering “volumetric” rates for the electricity you use by an average of 11.3% to 11.9%. If approved, the changes would go into effect in late 2025 and early 2026.Supporters of the proposal say a fixed charge will make electricity bills fairer by more equitably dividing the costs of maintaining the system we all use. The costs of subsidy programs, new hookups, grid modernization, repairs and wildfire mitigation are all folded into the price of electricity. Californians who can’t avoid using more energy — such as those living in hotter inland climates and those who can’t afford or access rooftop solar panels — end up shouldering a disproportionate share of this burden.

Supporters also say the proposal will incentivize electrification. If you make power use cheaper, they argue, Californians will be more inclined to invest in electric heat pumps or electric vehicles, thus helping the state to reduce its reliance on polluting fossil fuels.Unfortunately, the Public Utilities Commission’s proposed decision will not bring the state meaningfully closer to achieving either goal. Although some low-income customers will see cost savings, many households that aren’t wealthy by any stretch of the imagination will be stuck with the highest fixed charge.The lowest $6 tier applies only to customers enrolled in the California Alternate Rates for Energy program, which has an income limit of $39,440 for a household of up to two people and $49,720 for a family of three. The $12 tier applies to customers enrolled in the Family Electric Rates Assistance program, which has an income limit of $62,150 for a family of three.

These low thresholds mean many middle-class Californians — including those living paycheck to paycheck — will be hit hard. Meanwhile, the amounts of the proposed fixed charges are largely arbitrary. No one we spoke to offered a convincing explanation for how $24.15 was decided upon. It just seems to have been the most politically palatable compromise: It wasn’t as high as what the utilities originally proposed, and the Sacramento Municipal Utility District uses the exact same fixed charge.But, as the commission’s own proposed decision notes, the figure doesn’t account for all utility fixed costs. Nor does it account for wildfire mitigation initiatives. At least in the near term, the expensive undergrounding of power lines in high-risk areas will continue to be incorporated into electricity costs, pushing rates higher as more wildfire-hardening projects get approved.Furthermore, it seems unlikely that the reduction in electricity usage rates will be enough to significantly move the needle on electrification. According to the proposed decision, even the utilities doubt it will. After all, PG&E hiked residential electricity rates by 20% in January alone. So even if rates were to drop by 11.9% in a few years, we’d still be paying more for electricity overall.

Meanwhile, the solar industry correctly worries that a high fixed charge could further reduce incentives for people to install rooftop solar and home battery storage while discouraging energy conservation.Alice Reynolds, the Public Utilities Commission president, told us she’s surprised the proposed decision is getting so much attention, because “this is not a huge change for anyone.”

Which raises the question: Is it even necessary?Yes, the proposed decision divides the pie of electricity costs differently. But it doesn’t fundamentally address the underlying issue of why costs are rising so quickly in the first place.

The plan’s implicit premise is that everyone should stay on a mass grid largely run by private utilities, forever. But is that really what we want — don’t forget that PG&E last year was America’s most hated utility — or what we need?

Instead of investing billions of dollars in undergrounding PG&E power lines in remote, fire-prone areas, it may ultimately be cheaper, safer and more sustainable — especially as climate change renders more and more areas uninsurable and perhaps uninhabitable — to focus on developing localized energy sources such as microgrids and community solar.

That doesn’t necessarily mean scrapping the idea of a fixed charge, as there are clear inequities in California’s current billing system. But there’s no need to rush an arbitrary plan — itself the result of a bill passed in haste and secrecy.Lawmakers should go back to the drawing board and give more modest proposals, such as AB1999, a fair shot.“

Here’s the real reason PG&E rates are skyrocketing in California

“California now holds the ignominious prize for the highest electricity rates in the nation, except Hawaii. How did we get into this predicament? 

Because the California Public Utilities Commission — the five-member agency appointed by Gov. Gavin Newsom that regulates the prices, service and reliability of private energy utilities — has failed to do its job.

There are other government entities that hand out cookies to energy companies without a care for who pays the bill. But the buck stops at the Public Utilities Commission to protect utility customers. 

When a private utility like PG&E decides it needs to build new infrastructure — say, to protect against wildfires — it’s the commission that determines if the infrastructure is necessary, if the utility’s proposed costs for that infrastructure are fair, and if better and cheaper alternatives exist.

The commission enjoys limited scrutiny by the courts. Decisions made by other state agencies can be appealed to Superior Court. But only an appellate court can hear commission appeals, and taking that case is discretionary. This limited judicial review means that the Public Utilities Commission essentially answers to the governor alone.

As a former commission president, I know what keeping energy prices down requires: a sharp pencil to control relentless spending requests from utilities that allow them to generate more profits, adherence to legal mandates that require it to protect ratepayers and allow only “just and reasonable” costs and the backbone to just say no to the utilities’ unceasing demands that customers pay for programs that are ineffective or unnecessarily expensive.

None of this is happening, and Californians should be outraged.

Last November, the commission authorized a historic rate increase — more than $2.56 billion for PG&E’s 2023-2026 general rate case spending estimates. PG&E applied to the commission to charge its customers for the costs of running its gas and electricity businesses, including new infrastructure, system maintenance, and employee and management salaries.

That rate increase hits in stages. The commission let PG&E charge its customers immediately for the first $1.3 billion, painfully hitting in January’s bills. But that’s not the end to commission-permitted rate increases: The utility will collect $716 million more in 2024, $359 million in 2025 and $204 million in 2026. 

The commission allowed these increases despite its administrative law judge’s initial decision finding that PG&E’s evidence justified a much smaller rate hike. (The commission employs administrative judges to independently vet whether or not utilities have proved that they are entitled to charge their customers for their costs.)

The administrative law judge’s decision hinged on whether PG&E’s spending was “just and reasonable” — the legal prerequisite for approving any utility cost. Instead, politically appointed commissioners overruled the judge and gave PG&E the vast bulk of what it wanted despite what the facts support.

Before the ink on PG&E’s unprecedented 2023 rate increase was dry, the utility came back, asking the commission to order its customers to pay over $4 billion more for Diablo Canyon nuclear power plant costs, power purchases from electricity generators and infrastructure upgrades for “energization” efforts.

PG&E wants $691 million of that upfront — paid now — before the Public Utilities Commission even evaluates whether those costs are just and reasonable.

Adding insult to injury, in its March 12 decision, the commission handed PG&E yet another increase of $516 million — to take effect immediately. This time the commission dispensed with pesky legal requirements for evidentiary hearings, testimony or proof of PG&E’s asserted costs. By not even attempting to evaluate the reasonableness of the utility’s demands, commissioners set a new low in disregarding the law, which allows the commission to increase rates only after it holds a hearing that includes testimony under oath and cross-examination of PG&E’s witnesses.

In its decision, the commission admitted that granting PG&E half a billion up front, based only on PG&E’s word, “departs from the general requirement to raise rates only after the costs are determined reasonable.” Despite PG&E’s admission that its original $5.7 billion expense estimate actually only totaled $2.7 billion, commissioners approved the increase anyway, only timidly admonishing that “PG&E should be more transparent at the outset to assist with decision-making.”

What should have occurred?

Formal hearings, with PG&E’s witnesses testifying under oath about the true amounts of their asserted costs. The commission should have followed the law that requires PG&E to prove that its costs are “just and reasonable” — before forcing its customers to pay more. The law requires public, rules-based fact determinations about what money is really needed to provide safe and reliable service versus what constitutes frivolous, unnecessary or profit-plumping projects.

The commission blithely maintains that it will review PG&E’s actual costs later — years from now. If unreasonable costs are found, it will order refunds of the money PG&E took from its customers.

But PG&E will almost certainly fight such refunds by scaring future commissioners into inaction, claiming that “the markets” have expected them to keep the money so it can’t be taken away.

Kowtowing to PG&E despite the evidence and the facts — or in this latest case, raising rates without any evidence or facts — shows the Public Utilities Commission’s utter indifference to the hardships these rate increases impose on California’s families and businesses.

Now, a new commission scheme is set to create a “fixed charge” on top of current pay-as-you-use prices, which would be marginally reduced, only for residential customers, under the plan.

On March 27, an administrative law judge published a proposed decision that, if approved in May, will impose a new fixed $24.18 monthly charge on residential customers not eligible for low-income discounts. The commission touts this proposal as a win because it set the charge significantly lower than the $70-$90 the utilities initially proposed. But the new charge still exceeds twice the national average for similar charges.

Fixed fees are the start, not the end, of more rate increases because the commission doesn’t prohibit the fixed charge from increasing whenever PG&E wants. The plan lacks safeguards against utility double-dipping, so it will be hard to tell whether the costs embedded in this new fixed charge are duplicated in other cost-recovery requests. Even PG&E’s low-income customers are not protected — they already pay more than the average customer in the Sacramento Municipal Utility District.

The Public Utilities Commission’s rubberstamping of unproven, unwarranted, unjust electricity costs must stop. It is up to the state Legislature to inject sanity into the regulatory system and protect California families and businesses from ruinous, undeserved rate increases.

Thankfully, legislators have introduced AB1999 to stop this increase and cap any fixed charge at $5 for low-income customers and $10 for other customers. AB2054 would stop the revolving door of former commissioners moving to jobs with utilities and scrutinize utility funds, and SB938 would stop ratepayers from paying for utility lobbying and advertising, among other reforms.

Passing these bills would be important first steps to reining in California’s rogue Public Utilities Commission and halting runaway energy rates.

More robust oversight by the Legislature is needed. Without it, you can expect your energy bills to continue to skyrocket.”

Loretta Lynch is a former president of the California Public Utilities Commission and an attorney in San Francisco.

(What the heck is Project 2025? Quick primer here.)

California Indivisible has been leading this fight to cap utility taxes. Here’s where this battle has taken us so far – our previous posts.

AB-1999 is supported by 300 organizations, 100 elected officials, and 20 co-authors. Millions of working Californians and seniors will see significant bill increases with continuing rate increases from utility companies and it will discourage solar and energy conservation.

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