California’s major power companies have introduced a new billing system amid reports of a grid failure caused by rising energy prices due to a hasty transition from oil and gas. The state’s residents were previously warned about the possibility of frequent power outages. Furthermore, the move towards electric vehicles has put additional strain on the electrical grid. Renewable energy now constitutes 30% of California’s total energy consumption, and its leaders have committed to making the state entirely free of fossil fuels by 2045.
According to Mike Jacobs, a senior energy analyst at the Union of Concerned Scientists, utilizing an electric vehicle has a similar impact on energy usage as adding one or two air conditioners to a household. Ram Rajagopal from Stanford University has expressed concerns that if the ambition of achieving a 100% electric vehicle transportation system is realized, the current power grid may not be able to accommodate it.
California has experienced a consistent rise in power costs and currently boasts the highest retail price in the United States. In 2020, the cost of electricity in California was 18 cents per kilowatt-hour, which is 70% higher than in any other state. This price had already increased by 18% since 2016.
To address the issue, the California legislature enacted Assembly Bill 205, which called on energy companies to lower consumer costs and simplify billing procedures. In response, Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric have drafted a proposal that they claim meets the requirements of the legislation.
Under the proposed plan, fixed rates will be implemented based on the income level of households. Those with earnings ranging from $28,000 to $69,000 will pay between $20 to $30 per month, depending on their geographical location. Households earning between $69,000 and $180,000 will be charged between $51 and $73 monthly, while those with incomes over $180,000 will pay between $85 and $128 per month.
According to Southern California Edison, the new proposal will lead to lower bills for the state’s poorest residents while increasing transparency. The company claims that more than 1 million individuals will witness a reduction of around 20% in their energy bills.