Affordability Study Session
April 24, 2025
Goals for Attendees
Deeper Understanding of:
1.Rates, bills, and cost drivers
2.What RCEA is doing and how you can help
Agenda
•Why we care about affordability
•Understanding Your Bill
•Rates Overview
•Affordability and RCEA
Why We Care About
Affordability
This is a challenging balancing act
Providing clean energy, high
reliability, and innovative
programs per RCEA’s
mission can add expenses
above the base cost of
providing energy
RELIABILITY
CLEAN
ENERGY
INNOVATIVE
PROGRAMS AFFORDABILITY
SAFETY
Affordability is an equity issue
Source: CA Public Utilities Commissio
Areas of Affordability Concern: Affordability Ratio (AR) is 15% or greater for customers in the lowest 20% of income.
Lower income customers spend a larger
% of their income on energy
Energy
Affordability in
Humboldt
Source: CA Public Utilities Commission
CPUC Electric
Areas of
Affordability
Concern, 2022
Most of Humboldt County is an Area
of Affordability Concern .
Customers in the lowest 20% of
income ($18.1k/year or less), paying
more than 15% of remaining money
after housing, water, and gas for
energy alone.
CARE & FERA
Enrollment
California
Alternate Rates
for Energy
(CARE)
Discount:
20% or more for
gas & electricity
Family Electric
Rate Assistance
(FERA)
Discount:
18% for electricity
RCEA Total Arrears 2019 -2024
61+ Days in Arrears
Understanding
Your Bill
Understanding Your Bill PG&E Bill: Page One
Understanding Your Bill
Total RCEA Charges
PG&E Bill: Page One
Understanding Your Bill
Total RCEA Charges
Payment Plan Summary,
if applicable
PG&E Bill: Page One
Understanding Your Bill
Total RCEA Charges
Program(s) customer is enrolled
in: CARE, FERA, Medical Baseline
Payment Plan Summary,
if applicable
PG&E Bill: Page One
RCEA Details Page
RCEA Details Page
Total Usage (kWh)
RCEA Details Page
Total Usage (kWh)
RCEA’s Contact Info
RCEA Details Page
Total Usage (kWh)
RCEA’s Contact Info
Your Rate Schedule
RCEA Details Page
Total Usage (kWh)
RCEA’s Contact Info
Your Rate Schedule
Generation Charge Details:
On Peak/Off Peak, etc.
RCEA Details Page
Total Usage (kWh)
RCEA’s Contact Info
Your Rate Schedule
Generation Charge Details:
On Peak/Off Peak, etc.
Total RCEA Charge
PG&E’s Electric Delivery Determining Your Savings
Charges Page
PG&E’s Electric Delivery Determining Your Savings
Charges Page
Generation Credit
PG&E’s Electric Delivery Determining Your Savings
Charges Page
Generation Credit
Power Charge
Indifference
Adjustment (PCIA)
PG&E’s Electric Delivery Determining Your Savings
Charges Page
Generation Credit
Power Charge
Indifference
Adjustment (PCIA)
Franchise Fee (FF)
Let’s Calculate Together…
To Calculate Savings:
RCEA Generation Cost: $36.22
PCIA: 2.40
FF: 0.26
Comparable Amount = $38.88
PG&E Generation Credit: $39.17
Comparable Amount - 38.88
Savings Amount = $0.29
Rates Overview
What costs make up an RCEA
customer’s bill?
What do customers really
care about?
Bill ($) = rate ($/kWh) x usage (kWh)
Affordability needs to address not just rates but also
usage.
RCEA is well equipped to address the usage part of the
equation with our robust customer program offerings.
Not rates. Bills.
How do RCEA’s electric rates
& bills compare?
Rates
($/kWh)
Bills
(avg. monthly)
RCEA $0.45285¹ $170.76¹
PG&E
(bundled
customers)
$0.45370¹ $171.08¹
California $0.3055² $186³
US $0.1626² $144³
1) From RCEA Joint Rate Mailer, for
residential TOU-C rate customers – about
60% of residential customers are on this
rate (June 2024)
2) From US Energy Information
Administration
https://www.eia.gov/state/data.php?sid=C
Ady (Dec. 2024)
3) From
https://www.solarreviews.com/blog/averag
e-electric-bill-in-california (2024)
Why are California rates
overall so much lower than
PG&E’s or RCEA’s?
• About ¼ of California’s electric customers served by
municipal utilities
• Munis offer lower rates than IOUs, i.e., PG&E
• Example: Alameda’s city electric utility charges residential customers $0.12 - $0.29/kWh, based on the customer
usage tier.
Procurement
RCEA’s energy -related costs
Costs fluctuate with
changing commodity prices
Annual budget includes:
• Energy Supply
• Resource Adequacy
• Renewable Energy
• Carbon-Free Energy
How are they trending?
projected
RCEA’s Clean Energy
Trajectory
Procuring Clean Power
Beyond State Requirements
Under current market
conditions, each
additional 1% renewable
energy RCEA procures
increases overall power
procurement costs by 4%
Foster solar + storage project currently under construction in Arcata Bottoms (staff photo)
How does it impact RCEA’s costs?
Power Charge
Indifference
Adjustment
The Power Charge Indifference
Adjustment (PCIA)
What is it?
What am I paying for?
Why am I paying it?
Who pays it?
How does it impact CCAs?
Explanation courtesy of
Purpose of the PCIA
$
Amount IOU*
paid for power
resources now
no longer
needed by
customers
who moved
over to CCA
service
*IOU = Investor-Owned utility (e.g., PG&E)
Current
market value
of the
resources IOU
procured for
departed
customers
Purpose of the PCIA $
Amount IOU*
paid for power
resources now
no longer
needed by
customers
who moved
over to CCA
service
*IOU = Investor-Owned utility (e.g., PG&E)
Current
market value
of the
resources IOU
procured for
departed
customers
PCIA amount
applied to CCA
customer bills to
make IOU whole
How the PCIA impacts rates
that CCAs can charge
$/kWh IOU
rate
PCIA charged by
IOU to CCA
customers
Maximum amount
CCA can charge
customers while
remaining
competitive with
IOU rate
Policy Impacts
on Rates
Regulatory & Legislative
Rate Impacts
How Policy Impacts
Rates
•Policy decisions are the primary driver of total bills in California, whether that be a total bill increase or
decrease.
•Total energy burden is not the only metric policy is
measured against.
•CA is working to create an energy system that is
clean, accessible, reliable, safe, and affordable. Not
an easy task.
Key Policies
Clean Energy Goals
Grid Access
Reliability
Safety
Affordability
Costs that are driven by
policy priorities
Generation Costs
Wildfire Costs
Rooftop Solar Cost
Rate Structures
Transmission and Distribution Investments
Impacts and Drivers of
Transmission and Distribution
Generation buildout
drives T&D need
Transmission
Costs
Public Policy can
rapidly change T&D
planning
Electricity Customers Pay
Wildfire Recovery Charges
‘Wildfire Recovery’ revenue
requirements are embedded in PG&E
T&D Rate components.
Wildfire recovery has grown to become
roughly 20% of the total electricity rate.
https://www.cnn.com/2022/07/30/weather/mckinney-wildfire-northern-california/index.html Solar Subsidies Impact
Non -Solar Customers
What is the solar cost shift?
Source: Silicon Valley Clean Energy
PG&E’s bundled residential
electric rates increased 80%
since 2019
Bundled=
Generation + T&D)
Cents/kWH, 2019 -
2025
What is RCEA
Doing?
•Given California’s high electric rates, electric providers including RCEA risk losing industrial and commercial customers who can relocate to other states or may simply go out of business.
•In September 2021, RCEA’s Board authorized a non -standard pricing agreement policy that can be used as a basis for negotiated rate agreements with large customers, provided such rates do not put additional cost burden on other customer classes.
Innovative rate offerings to
help customers save
Public Agencies
Who:
Municipal and Tribal government facilities, schools, fire stations, and more.
Why:
Public agencies are some of the largest energy users so greater opportunities for savings plus operating efficiently has a broad benefit.
What:
Energy assessments, direct incentives, program referral, funding application and project management assistance, benchmarking and long-term planning.
How:
Local Government Partnership (LGP) with PG&E, Northern Rural Energy Network (NREN), CCE funds.
Local Businesses
Who:
Humboldt County businesses with an active RCEA or PG&E account.
Focus on small, “hard-to-reach” customers.
Why:
Supporting local business supports our community. Energy costs can be a large component of operating expenses. Many local business owners too busy to focus on researching and pursuing energy savings programs.
What:
No-cost energy assessments, direct incentives, referrals. Developing new incentive and financing programs.
How:
Local Government Partnership and NREN funds.
Residential Customers
Who:
Humboldt County homeowners, renters, and landlords.
Why:
Direct Benefits to largest sector of customers.
What:
direct appliance and heat pump rebates, energy assessments and general consultations, free energy savings kits. Developing micro-loan program.
How:
NREN funds.
Contractors
Who:
Contractors serving all sectors of Humboldt County customers.
Why:
Many of our small contractor businesses would be unable to access incentives without RCEA assistance. Contractors are the main driver of energy projects in Humboldt County.
What:
Technical assistance for accessing RCEA, statewide, and other funding.
Workshops and trainings. RCEA Contractor and Vendor Network.
How:
NREN and CCE funds.
What Can
RCEA Board
Members Do?
Direct customers to existing
resources and programs.
Inform cus tome rs of RCEA a ctions
for e xa mple $$ in bill s a vings .
Educa te cus tome rs a nd community
s ta ke holde rs a bout root cha lle nge s
a nd the ba la ncing a ct ne e de d.
redwoodenergy.org/rates-billing/discounts-and-assistance/ Help us communicate with
customers and the public
1 2
3 We can’t do this alone
Help us communicate with
policy makers
IOUs, the Governor, the legislature, and the California Public Utilities Commission are our partners.
Thank you
Understanding Your Bill
PG&E Bill Page One
Total RCEA Charges
Any program the customer is enrolled in, Payment Plan Summary, if applicable i.e., CARE, FERA, Medical Baseline
1234567891-0
John Smith
Joan Smith
1234 Your Address
Eureka, CA 95501
Understanding Your Bill
RCEA Details Page
RCEA’s Contact Info
Your Rate Schedule
Generation Charge Details:
On Peak/Off Peak, etc.
Total RCEA Charge
1234567891-0
Total Usage kWh
1234 Your Street
3456791011 3444583644
Understanding Your Bill
PG&E’s Electric Delivery Charges
1234567891-0
1234 Your Street
3456791011
22211133311
Power Charge Indifference
Adjustment (PCIA)
Generation Credit
Franchise Fee (FF)
PG&E’s Electric Delivery Determining Your Savings
Charges Page
Generation Credit
Power Charge
Indifference
Adjustment (PCIA)
Franchise Fee (FF)
Let’s Calculate Together…
To Calculate Savings:
RCEA Generation Cost: $36.22
PCIA: 2.40
FF : 0.26
Comparable Amount = $38.88
PG&E Generation Credit: $39.17
Comparable Amount -38.88
Savings Amount = $0.29
Strategies to Address Rising Electricity Costs
Through Policy Engagement
As electricity costs continue to rise, maintaining affordability is increasingly important for customers and for achieving long-term emission reduction goals. Electricity bills are influenced by a range of cost drivers—some of which can be mitigated through proactive policy action.
The list below outlines key cost drivers and summarizes current proposals being explored by policymakers and stakeholders to help reduce customer bills and support electrification. Many of these proposals are still in early stages of development. RCEA staff are actively tracking and engaging with these efforts where they align with our Policy Platform, and will seek Board direction on emerging issues not yet addressed in the Platform.
Key Cost Drivers and Recent or Proposed Actions to Reduce Customer Bills and Support Electrification
Cost Driver Recent and Proposed Actions
Wildfire Costs Change wildfire spending approval process. Currently many small rate increases, such as wildfire spending, are approved in one off applications. Instead, integrate these and other rate increases into the existing IOU rate setting General Rate Case process and approve all rate changes at once.
Explore policies that reduce construction costs associated with undergrounding power lines.
Take wildfire spending off bills where possible, for example fuels treatment coordination between utilities and agencies such as forest service or funding for extreme weather-related catastrophic event response.
IOU Cost of Capitol
and Transmission
and Distribution
Investments
Securitize IOU debt.
Improve regulatory oversight on IOUs
Fines for nonperformance.
More rate changes under GRC.
Lower return on equity to match investments with similar risk (potentially 2% decrease)
Implement public infrastructure ownership models as an alternate option to IOU funded infrastructure.
Cost Driver Recent and Proposed Actions
Rooftop Solar
Cost Shift
The state is in the midst of implementation of Net Energy Metering “NEM” 3.0 (also known as Net Billing Tariff or NBT) to reduce cost shift for non-NEM customers.
Consider reform to all versions of NEM, including:
Move funding source of the subsidy to the state budget rather than other customer rates
Step down from NEM 1.0 and NEM 2.0 at sale of real property.
Lower the NEM 1.0 and NEM 2.0 period from 20 years to 10 years.
Refine elements of NBT so that all customers share wildfire mitigation, public purpose programs and system costs.
Rate Structures Many states have a higher portion of their bills than CA on fixed rates vs kWh rates, which inspired the Income Graduated Fixed Charge.
CA has developed a framework for this rate structure that is slowly being deployed.
CA ratepayers receive the California Climate Credit annually, which is funded by the Cap-and-Trade program. This credit is given twice annually: once in April and once in October. Last year’s credit to PG&E customers totaled $110. Proposals include:
Move the credit to most expensive months.
Allocate by customer class (by IGFC tiers, potentially also overlain with NEM participation).
Move funding source of the CARE/FERA subsidy to the state budget rather than other customer rates.
Generation Costs Consider environmental streamlining for renewable projects, simplify permitting, and create more permitting pathways.
Increased competition and regional coordination through multi-state regionalization.
Energy Efficiency
Programming Costs
Remove or reduce funding for this from ratepayers funds, especially for programs that do not pass cost effectiveness tests.
There is significant pushback on this proposal, especially for equity programs.
Find alternate funding sources for these programs off bills.