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This is my first paragraph.
The pricing is also far too inflexible. Electricity costs vary significantly over the day and over the year, yet the rates do little to reflect that. The result of this faulty pricing is that we use too much gas, too little electricity, and too much dirty electricity during times of peak demand.
Economists at the Energy Institute at UC Berkeley’s Haas School of Business have done a lot of work on this (see for example this writeup) and California’s legislators have been listening. California Assembly Bill 205, which was signed into law in June 2022, directs the California Public Utilities Commission (CPUC) to develop an income-graduated fixed charge to improve affordability and speed up electrification, and to look into more flexible rates that will encourage use of cheaper and cleaner energy. That effort is now underway. (2) (Note: These rulings will not directly impact Palo Alto’s pricing, since it operates its own utility.)
The basic idea behind the fixed charge is simple. If a utility collects more revenue in fixed charges, then it can offer lower per-kWh rates. Lower rates encourage electrification. The fixed charge can also make bills more affordable if it is income graduated. That is more or less what AB 205 asks for. Several variations have surfaced during the CPUC proceeding.
This is my 2 paragraph.
This is my 3 paragraph.
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