Letters to the editor: Let utilities test their fixed-price plan first

(Jay L Clendenin/Los Angeles Times)

Let utilities test their fixed price plan first

letters to the editor

May 2, 2023

About the editor: The plan for utilities to charge flat-rate, revenue-based fees is unlikely to encourage electrification or efficiency. (“California should not let energy companies pay for our electric bills,” editorial, April 27)

The allowances penalize customers who use little electricity and reward those who use large amounts. People who live alone in small homes or people who have spent thousands of dollars to improve their home’s efficiency will see higher bills.

Since there is no empirical evidence that cutting energy prices by a third and introducing significantly higher fixed prices will accelerate electrification, the state will have to conduct pilot tests to see if the theory is correct. It tested usage rates for two decades before all customers switched to those rates.

Utilities have proposed fixed fees that are orders of magnitude higher than those charged elsewhere. Most cost less than $25, and the national average is less than $11 per month. They can offer flat rates in the $25 range for those purchasing heat pumps or an electric car.

Ahmad Faruqui, Danville, California. The author is an energy economist…

About the editor: The Times editorial reiterated that the way customers are billed for electricity needs to change to allow all customers to shoulder the cost of network infrastructure without continuing to impose the burden disproportionately on lower-income customers.

In response to state legislation, Edison of Southern California was one of several participants to submit a proposal for a flat fee based on income from utility bills. The separation of fixed costs (for wires, poles, etc.) from electricity consumption provides more transparency on monthly bills. Edison’s proposal includes a 33 percent reduction in electricity use for residential customers.

One key explanation is that California electricity rates are decoupled from utility profits, so Edison gets no additional income security or profit from the fixed fee.

The California Public Utilities Commission is leading the review process. We expect that the CPUC’s final decision will provide the greatest benefit to most customers while ensuring utilities can safely provide affordable and reliable power.

Michael Backstrom, Rosemead The author is vice president of regulatory affairs at Edison in Southern California…

About the editor: There is one more thing that regulators should keep in mind.

If the difference between a revenue-based bill and actual usage becomes too great, it would make sense for those with rooftop solar to install a backup battery and cut the cable all the way.

Electric companies face the same competition as cable companies do now.

Hal Drake, Santa Barbara

Source: LA Times


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