California wants to impose a new “charge” on your utility bill that you have to pay regardless of whether you use any energy that month and the rate will now be based on your income. Reform California opposes the charge and calls it an illegal tax and a violation of privacy. If you make over $180,000 annually you must pay an additional utility fee of $128 per month or $1536 per year more on your utility fees. While those making under $28,000 annually will pay an extra utility fee of $24 per month or $288 annually.
Californians are still suffering under some of the highest utility rates in the country, and many can barely afford to pay their bills.
Now California Democrat politicians want to impose a new “flat fee” on all utility bills based on each household’s income for the year. That means many residents will pay a charge of $128 per month – while low income and other “favored” groups pay just $24 for the SAME SERVICE.
Opponents say California Democrats are just playing class warfare and the “fee” is really an illegal tax on most Californians to subsidize the bills of lower-income residents.
The fixed rates are required under Assembly Bill 205 (AB 205), which was signed by Governor Gavin Newsom (D) in 2022. The bill states that “the commission may authorize fixed charges [for utilities] … The fixed charge shall be established on an income-graduated basis.”
The specific rates in this “flat fee” scheme is now being voted on by the California Public Utilities Commission (CPUC). The proposal would charge customers of Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric fixed rates based on income. For San Diego Gas & Electric customers, the rates would be as follows:
- Income of under $28,000: $24/month
- Income of $28,000-69,000: $34/month
- Income of $69,000-180,000: $73/month
- Income of over $180,000: $128/month
Carl DeMaio, chairman of the tax-fighting organization Reform California, says that AB 205 and the CPUC proposal is fatally flawed — and even illegal.
“California’s Prop 218 says that you’re not allowed to favor one customer over another, but that’s exactly what this proposal would do — favor customers and give them better or worse rates based on their income,” said DeMaio.
“This would be illegal if this was nearly any other service, but because these utility companies are merely charging the rates imposed by the government itself, they’re skirting this requirement — but that doesn’t mean this will be free from legal challenges,” explained DeMaio.
“If we allow the state to charge you differently based on factors like your income, then what factors might come next — your race, your sex?” asked DeMaio. “Why should one resident be forced to subsidize another resident when we already pay our taxes, some of which already helps give breaks to low income residents?”
DeMaio proposes a different solution to penalizing higher-earning Californians: blame the politicians responsible for making the utility rates so high in the first place and demand they take action to reduce the actual costs associated.
DeMaio points to a recent report by the Transparency Foundation that found $4.5 billion in hidden taxes imposed by politicians — among other things under state control and can be changed immediately — that are causing high utility rates.
>>> Read report on utility rates
But DeMaio also brings up another worrying point about the income-based proposal: how will utility companies know your income?
“Your state government is going to tell a private company what income you disclosed on your tax returns,” explained DeMaio. “You’ll have no privacy whatsoever — how else will they enforce this?”
How can concerned Californians help stop this proposal and protect their privacy?
DeMaio says the best way is to get involved in Reform California’s campaign to pass the Taxpayer Protection Initiative in 2024. The Taxpayer Protection Initiative is a measure that will appear on the ballot that will help stop a lot of taxes and fees in their tracks.
The Taxpayer Protection Initiative would require that any taxes or fees must be approved by a two-thirds vote of the California State Legislature and a vote of the people of California. The measure also prevents the government from charging a ‘fee’ for what is really a tax.
The Taxpayer Protection Initiative would ensure it applies to fees by defining taxes as everything that you pay that government directs, except when:
- A payment is voluntary;
- What you are charged gives you a product or service in return; or
- The amount you are charged does not exceed the value of the service
DeMaio says if passed the initiative would most certainly be invoked to challenge the legality of the utility rate flat fee scheme being currently proposed. The CPUC proposal violates the third provision because some residents would be paying more than the value of the service — making the “fee” defined as a tax.
“The utility rate ‘flat fee’ is really a tax because it charges wealthier Californians a higher cost than the value of the service in order to subsidize or pay for services for lower income residents,” explained DeMaio.
DeMaio and Reform California are leading the campaign to pass the Taxpayer Protection Initiative to defeat crazy proposals like the utility rate “flat fee” up and down the state. Join the campaign today to fight back.
The California Public Utilities Commission is due to weigh the specific rates in the flat fee scheme soon and make a decision. You can learn more at www.cpuc.ca.gov
