Assembly Bill 327 hasn’t received a lot of attention as it has wound its way through the state Legislature, but its author — Assembly Member Henry T. Perea — says it will likely lead to lower electricity bills in the Valley.
“This bill is a huge win for Central Valley residents, in terms of their pocketbooks and energy bills,” the Fresno Democrat said.
AB 327 cleared its latest hurdle on Friday, passing out of the Senate Appropriations Committee.
But while tweaks to the proposed legislation have won over some skeptics, the Sierra Club remains opposed.
A Sierra Club memo on the bill says it was “written by the state’s three big utilities” and concludes: “The proposed change in electric rate design would create the most radical shift in how we pay for electricity since the energy crisis of 2001.”
Last week, the environmental organization purchased a full-page ad in The Bee to highlight its concerns about the bill.
Evan Gillespie, the Western Region Deputy Director for the Sierra Club’s Beyond Coal Campaign, says Perea’s bill will impose a monthly fixed charge of up to $10 on each customer, and increase the cost of electricity for those who use the least power.
It will, he said, have a chilling effect on the state’s growing solar movement because people paying $120 annually no matter how little power they use will start thinking twice about solar. He also said the fixed charge could increase in later years.
Finally, the Sierra Club says the bill enables utilities to raise lower-tier rates for the first time since the energy crisis, and to reduce rates in the more costly upper tiers.
Perea doesn’t dispute much of what the Sierra Club says.
Yes, the bill includes a fixed charge, but he said it will initially be somewhere around $2 or $3 monthly, and will take years to reach $10. It is needed, he said, to maintain the power grid’s essential infrastructure.
As it is now, Perea said, those without solar are picking up the grid infrastructure maintenance costs for those who have solar. It is, he said, unfair.
The other thing that is unfair, he said, is that the Valley pays more for electricity because of the summer heat.
At its heart, the proposed legislation would give power back to the state’s Public Utilities Commission to set electricity rates. It will also take the state’s four power-use tiers and make them into two, Perea said.
Under the tiered system, users who use less stay in the cheaper lower tiers. Those who use more — especially during peak times — move into the more expensive upper tiers.
Valley residents, Perea said, move too fast into the upper tiers.
“When it’s 110 for 20 days in Fresno, nobody’s turning off their air conditioner,” Perea said. “We’re never out of the higher tiers.”
The bill has changed a bit from its Assembly beginnings and now includes an increased discount for low-income users, and that has won support for the bill not only from the state’s public utilities — including Pacific Gas & Electric — but others such as AARP and the Utility Reform Network, a customer advocacy group.
But Gillespie — who said rates in hotter climates like the Valley are already climate adjusted — said the bottom line is that those who use less energy will see their bills increase, and those who use more will see their bills decrease.
It is also bad news for conservation, he said.