Updated July 20
The California Public Utilities Commission is grappling with how to better forecast utility bill impacts on struggling customers’ pocketbooks.
The CPUC has measured customer and community energy burdens by using the California Communities Environmental Health Screening (CalEnviroScreen), which ranks about 8,000 communities by level of vulnerability. It postponed a vote last week on a decision in the second phase of its Affordability proceeding, which aims to set a blueprint that more accurately measures how commission decisions and proposed utility rate hikes impact vulnerable customers and communities.
The Commission’s affordability metrics “are quite thoughtful,” said Jennifer Dowdell, senior policy analyst with ratepayer advocate, The Utility Reform Network. But TURN is urging the Commission to set an affordability baseline and require Southern California Edison and Sempra’s upcoming general rate cases to include affordability metrics. Pacific Gas & Electric was required to include them in its 2023-26 rate case.
“A baseline will let us know where we are now, and reveal the rate of change in affordability,” Dowdell said.
The debate also has been over what additional variables to include in the metrics that seek to predict how utility bills affect customers working minimum wage jobs. One of the biggest issues is what expenses to factor into their rent and other housing costs, which are subtracted from their income to determine how financially burdensome essential energy, water and communications services are.
Communities with households at the 20th percentile of the community’s income distribution that spend more than 15% of their available budget on essential levels of utility services, or more than 10% on essential levels of either gas or water service, have been center stage. But an increasing focus is on those whose income is in the 50th percentile, which is about $80,000 a year for a family of four. They do not reap low income utility assistance and are increasingly squeezed by higher utility bills and other expenses, including taxes that are much more substantial for them than for those in low-income homes.
The metrics differ in how the CPUC groups households into communities, with each reflecting a different perspective depending on the affluence of the neighborhood, according to the CPUC. “Multiple perspectives add complexity and yet are necessitated” by the Commission’s finding that households “have a wide variety of experiences that cannot be perfectly captured by depicting a single household,” it adds.
Also at issue is whether to only account for individual impacts one at a time as urged by the investor-owned utilities–or to model utility bill costs of pending proceedings, as called for by ratepayer and environmental advocates.
The pending decision agrees to include taxes in household expenses as called for by TURN. But it does not agree to add in sewer and wastewater costs as urged by the Utility Consumers Action Network, concluding these costs are not substantial.
The Commission may vote on the proposal on August 4.
The next phase of this proceeding will evaluate how the metrics can be used to assess the effectiveness of proposals to make energy rates more affordable.
