1 Residential Electric Rate Reform
June 2023
2 Residential Rate Reform Mandated by CA Law
▪ California requiring adoption of electric space and
water heating and zero-emission vehicles to help
combat climate change
▪ Households in general will use less natural gas and
gasoline and more electricity in future
▪ AB 205 requires CPUC to authorize residential rate
reform by mid-2024
▪ AB 205 requires new income-based fixed charge with
at least three income brackets
State Policy Expected to Increase Electric Load
Source: California Air Resources Board (CARB) Scoping Plan Modelling by E3 Oct 28,2022 Workshop https://ww2.arb.ca.gov/sites/default/files/2022-11/SP22-MODELING-RESULTS-E3-PPT.pdf 3 Proposal Overview
Based on default rate, TOU-DR-1
Income
Bracket
Illustrative
Household
Income**
Fixed
Charge
Current
Avg. Rate
Proposed
Avg. Rate
Bracket 1* ~$28k $24
~47 cents ~27 cents
Bracket 2* ~$28k - $69k $34
Bracket 3 ~$69k - $180k $73
Bracket 4 $180k+ $128
* Brackets 1 and 2 for customers currently enrolled in CARE/FERA; these customers will still receive a discount per their respective low-income program ** Income thresholds will vary based on household income and people in household.
Illustrative household incomes based on a household of four ✓Support annual bill savings for average low-to-moderate income customers ✓Increased transparency and bill
predictability
✓Reduction in volumetric rates to make
electrification adoption more affordable
4 Illustrative Example: Electrification Impact Bracket 4 Customer E3 Public Tool results, based on default rate, TOU-DR-1 $541
$1,269
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Current Impact Full Electrification Savings Full Electrification, Proposal
Annual Energy Costs
IGFC Electricity Natural Gas Gasoline
$5,715
$6,256
$4,986
5 Income Verification Proposal
CPUC
Program Oversight
Third-Party
Administrator
Investor Owned
Utility
Investor Owned
Utility
Customer
Household
Income FTB /
State Agency
Income Level Assignment
IOU Customer List
Accurate
Data
Source
Customer
Education and
Support
▪ CPUC oversees program and policy
objectives (income brackets and appeals)
▪ Franchise Tax Board / state agency provides
income information to third-party
administrator
▪ Third-party administrator provides the
income level assignment to IOU
6 Procedural Timeline Summary
▪ April 7: Proposals submitted
▪ Late August: Hearings if required
▪ Q1-2024: Proposed decision expected
▪ July 1, 2024: Statutory deadline for final
decision