High-stakes battle brewing over California power bills
California utility companies are working on a controversial pricing structure that would bill households a different fixed charge depending on their income — but the idea is catching heat from Republicans who argue it will hurt low-income families.
As you may have already noticed on your own bill, monthly electric bills come with a few fixed fees that are added on top of the charges proportional to your usage rate. These charges go toward operating costs for the state’s electric grid, including maintenance.
Earlier in April, three companies — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — submitted a proposal to the California Public Utilities Commission that includes an income-based pricing system for these fixed charges, as called for in a 2022 state law. According to KTLA 5, the monthly charge would vary between the companies, and range from:
- Households making less than $69,000 a year: $20 to $34
- Households making $69,000 to $180,000 a year: $51 to $73
- Households making more than $180,000 a year: $85 to $128
The companies say the rate of kilowatt-hour usage will also lower for all customers, but low-income households will benefit the most. PG&E and Southern California Edison estimate its lowest-income customers would, on average, save as much as a 21% on their bill.
But Republican legislators are skeptical that a plan from “a government sanctioned monopoly” will save customers money. On Friday, the Senate Republican caucus fired off a letter to the utilities commission arguing that the pricing proposal would “unfairly burden” low-income residents:
- Senate GOP leader Brian Jones of El Cajon and other Republican senators, in the letter: “The goal of trying to stabilize the grid and lower electricity rates is something we support; however, the tactic of implementing a structured fixed-charge system that diminishes individual responsibility and usage in favor of an ‘identity’ subsidization is not, in our opinion, an answer. More fees are not a solution to already ridiculously high utility bills.”
The rising cost of natural gas has caused utility bills to surge, frustrating Californians across all economic levels. But lower-income residents end up paying a disproportionate share of utility expenses.
In the meantime, the first round of comments for the proposal will be due by June 2 and the Public Utilities Commission will be expected to make a final decision on the pricing structure by July 2024.
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1 More unions get behind housing bill
There are many reasons why California has an affordable housing crisis. One reason that may not be so apparent, however, is squabbling between unions.
Major construction unions split over San Francisco Sen. Scott Wiener’s bid to renew and make permanent a 2017 development law that aimed to expedite affordable housing, writes CalMatters’ housing reporter Ben Christopher.
Wiener’s original law gives developers two options to accelerate their plans:
- Option 1: Build something that is 100% affordable, with all new units priced for lower-income residents. Construction crews, however, must be paid a “prevailing wage,” (equal to about what a unionized construction worker earns on a public infrastructure project).
- Option 2: Build something where 10% of the new units are for lower-income residents. The rest could include market-rate units or even luxury units. But construction crews have to be “skilled and trained” (essentially, union workers), and be paid union-level wages.
But six years later, about two-thirds of the projects fast-tracked through the law appear to be built through the first option. Of the remaining third, it’s unclear whether any “skilled and trained” projects have actually broken ground.
The law will expire in 2026 and is up for renewal through Wiener’s Senate Bill 423. Under the new legislation, however, Wiener wants to nix the “skilled and trained” requirement, with the intent to speed up housing projects.
Opponents include the State Building and Construction Trades Council and the California Labor Federation. They want lawmakers to keep offering incentives to developers who hire union workers.
- Lorena Gonzalez, executive secretary of the California Labor Federation and a former Assemblymember, in a series of tweets: “Please tell me the last time a bill that red-lined labor standards out of existing law was passed in California?…. More profits for developers, less benefits for workers. That makes zero sense from folks who claim to be pro-labor.”
Standing by the bill is the Conference of Carpenters, plus two construction worker unions that recently broke away from the trades council, Ben reports. Proponents say that there aren’t enough unionized construction workers to meet the state’s housing needs, and that developers will still pay workers higher wages while more homes will likely be built.
- Jay Bradshaw, executive director of the Northern California Carpenters Regional Council: “We say, represent and raise all workers up. It’s an organizing opportunity and we’ll produce housing at all income levels. It’s what the state needs. Our own membership needs it. Desperately.”
Speaking of housing: On Friday, Attorney General Rob Bonta released statewide guidelines from the Department of Justice to address the often discriminatory effects that result from crime-free housing policies. In his announcement, Bonta said such policies “disproportionally discriminate against people of color, survivors of domestic violence, people with disabilities, and justice-involved individuals.”
For example, one crime-free housing training manual for landlords suggested to “immediately” consider refusing applications from those with a criminal history, and described tenants with criminal backgrounds as “two-legged urban predators.”
The department released the guidelines to help ensure that local municipalities’ crime-free housing policies adhere to civil rights laws and fair housing regulations.
2 A reprieve on abortion pills
California Democrats celebrated Friday’s U.S. Supreme Court ruling maintaining access to abortion pill mifepristone, but emphasized they’re on guard for continuing challenges to reproductive rights.
As CalMatters’ health reporter Kristen Hwang explains, the high court’s decision kicks the case back to the lower 5th U.S. Circuit Court of Appeals, which has scheduled its first hearing for it on May 17. While the case goes through the appeals process, however, pharmacists can dispense the medication and it’ll remain on the market.
For more than 20 years, mifepristone has been approved by the FDA as the first of a two-drug regimen for medical abortions. But earlier this month, a federal judge in Texas invalidated the approval, triggering the Biden administration to challenge the decision and states to stockpile emergency supplies of abortion pills. (California stocked up on misoprostol, the second drug used for abortions that was not part of the court case.)
In a statement commending the decision, Gov. Gavin Newsom stressed that “medication abortion is available and accessible” in California. And leaders from the Legislative Women’s Caucus, Sen. Nancy Skinner of Oakland and Assemblymember Cecilia Aguiar-Curry of Davis, said they will “continue to fight any court action that seeks to cut off access to this proven and safe medication.”
In a separate mifepristone case, a federal judge in Washington state issued a ruling that prohibits the FDA from making changes to the pill’s availability. Seventeen Democrat-led states and the District of Columbia are part of this case, though representatives from the attorneys general offices leading the lawsuit declined to confirm to Kristen whether California was asked to join the case.
3 Fentanyl, gig worker updates
Following the governor’s surprise visit to San Francisco’s Tenderloin neighborhood on Wednesday, Gov. Newsom announced Friday that the state will partner with San Francisco to crack down on fentanyl trafficking.
According to his statement on Friday, the California Highway Patrol and the California National Guard will work with the city’s police department and district attorney’s office to provide “more law enforcement resources and personnel” to combat fentanyl-related crime and “improve public safety and public confidence in San Francisco.”
San Francisco Mayor London Breed in December 2021 declared a state of emergency in the Tenderloin district due to drug overdoses. Since then, overdose deaths have climbed and are on track to increase again this year. In March alone, 52 people died in the city from fentanyl overdoses and police said Saturday they had seized more than a pound of fentanyl in the Tenderloin.
The collaboration of the four departments builds on Newsom’s overall plan to address the state’s drug crisis, which he introduced in March during his four-day State of the State tour. Assembly Republicans backed the partnership, but in a tweet said Newsom needed to “go further” and publicly support the six fentanyl bills that the Assembly Public Safety Committee will debate on Thursday during a special hearing.
In other Capitol news: The Service Employees International Union announced its plans to keep fighting a 2020 ballot initiative that allows ride-hailing companies to classify their drivers as independent contractors rather than as employees.
The labor organization, which works with drivers from companies including Uber, Lyft and DoorDash, has petitioned the state’s Supreme Court to review a previous order upholding Proposition 22. In its filing, the union says that the proposition conflicts with the Legislature’s authority to protect workers through the state’s workers’ compensation system.
Starting today and throughout the week, opponents of the proposition will hold three rallies — two in Los Angeles and one in San Francisco — to come out against Proposition 22 and advocate for more workplace benefits.
Approved by voters, Proposition 22 exempts rideshare companies from a law that would have required them to hire drivers as employees and provide them with more benefits. In March, an appeals court ruled that the measure was largely constitutional. This was a big win for rideshare companies, and this week’s protests mark labor organizers’ promise to fight the measure.
CalMatters columnist Dan Walters: Gov. Newsom’s crusade against the oil industry over gas prices missed the larger point that the cost of nearly everything in California is very high.
State regulators should not make it more difficult for pharmacies to add flavoring to help children take medication, argues Sonya Frausto, owner of Ten Acres Pharmacy in Sacramento.
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