Because light and heat (and in some places, air conditioning) are so essential, The Greenlining Institute maintains a strong presence at the California Public Utilities Commission (CPUC) as the only organization whose sole purpose is to advocate for people of color and low-income utility customers. We work to protect affordability for low-income Californians and maintain conservation incentives that help our state reduce pollution that disproportionately impacts our communities. We seek to ensure that rates are easy for to understand and respond to, and that they do not have a disproportionate harmful impact on renters or people with non-traditional households or work schedules.
The CARE program provides discounted utility rates to low-income Californians, funded through charges that all of us pay on our bills so that low-income Californians can keep their lights on. Because CARE is so central to our work, we engage in every CARE-related proceeding at the CPUC. Among other things, in recent years we have worked to keep eligibility requirements fair and understandable, preserving simplified enrollment for people already enrolled in programs such as Medi-Cal where eligibility is based on income level. We also worked with the utilities and the CPUC to design a just process to identify the very small number of customers who abuse the CARE program while protecting the rights of those truly in need.
Every year, millions of California households cannot afford to pay their energy bills, and hundreds of thousands of them have their service disconnected – a situation that grew dramatically worse as the economy sunk into recession a few years ago. This isn’t just an inconvenience. It can mean spoiled food, inability to cook meals and loss of vital heating or air conditioning, while some will lose refrigerated medicines or the use of life-saving medical equipment that runs on electricity. Greenlining and other advocates persuaded the CPUC to look at disconnections, achieving important protections for vulnerable customers:
- Payment plans. Utilities are required to work out a payment plan with customers who are behind on their bills, but customers were often pressured into accepting plans they couldn’t really afford. We succeeded in getting a requirement that utilities allow at least three months to pay off bills that are in arrears, a requirement that will be maintained at last through 2013.
- Deposits. Disconnected customers were often charged excessive deposits to reconnect, making it impossible to get the power back on. We persuaded the CPUC to limit these deposits through the end of 2013.
- Communication and customer service. No one should have their heat or power cut off simply because they don’t understand their bill or know what is expected of them. We have made progress in improving customer communication, especially for those who don’t read English (see below for more), but more needs to be done.
Californians speak over 200 languages, and 43 percent of our families speak a language other than English at home. While utility companies are generally good at providing some information in the most common languages, only one has taken steps – at Greenlining’s urging — to provide bills and other account-related notices in languages other than English. Greenlining consistently advocates for full access to in-language information for customers who don’t speak English or are more comfortable in another language.
Greenlining is closely involved with CPUC proceedings that determine how utility rates are structured – a complex and rather obscure field that nevertheless impacts every family and business in California.
Design of electric rates happens in two phases: A determination of how much money a utility needs to run its electricity operation, followed by a set of decisions about which groups of customers will pay how much in order to give the company that amount of money. That makes rate design a zero-sum game: A rate cut for someone must be made up for by an increase affecting someone else.
State law guarantees that basic household energy usage must be kept affordable and should not be burdensome for anyone, including low-income customers. Unfortunately, pressure has been rising in recent years to increase rates paid by lower-income and low-usage Californians in order to reduce rates for the more affluent and consumers of larger amounts of power. Greenlining intervenes in both rate-setting and rulemaking proceedings that examine rate design overall in order to protect access to these vital services for all, especially those of modest means.
Some of the key issues include:
- What is “basic” usage? How should we define “basic” usage that must be kept affordable in a state with such wide variations in climate, income and types of housing? Right now every “climate zone” has its own baseline from which rates are calculated. Is that the best approach?
- Conservation: High rates encourage conservation, a worthy goal, but can punish those who are unable to reduce their use – for example, because they live in a very hot climate, or are a renter in a poorly-insulated building with old, energy-guzzling appliances that the landlord doesn’t want to replace. Can we design a system of incentives and programs that result in maximum energy efficiency at minimum cost?
- Rates that vary by time: The smart grid now makes it possible to charge more during periods of peak electricity use and less at other times, which can help reduce peak demand on the system. Low nighttime rates also allow cheap charging for electric vehicles, for families who can afford them, which helps California move toward cleaner transportation. But some won’t benefit if, for example, they can’t rearrange their work or school schedules to adjust when they do the laundry or make dinner. Some families also will not be able to use new technologies that control usage automatically, like programmable thermostats, if they rent and are not allowed to install new appliances. Are these kinds of rates right for everyone, or just for some?
- Net metering: Net metering allows people with home solar systems to get credit, at the full retail rate, for power they generate, reducing or even eliminating their energy costs. This is great for those with solar panels (and a good incentive to install such systems), but those without solar could have to make up that shortfall in revenue. Can we design this important program so that solar will be an appealing alternative for a wide range of customers, while not unduly burdening those who for whatever reason can’t go solar?
Since at least 2007, the federal government has been promoting modernization of our electricity system to create a “smart grid” that uses communications technology to help it find and repair outages faster and adapt to fluctuations in usage, power generation, etc. President Obama has strongly supported these efforts and incorporated funding for many smart grid projects in the 2009 American Recovery and Reinvestment Act. In the last several years, the CPUC has devoted considerable attention to smart grid deployment, and Greenlining remains heavily involved.
We pay particular attention to customer-oriented features of the smart grid, including those that allow utility consumers to better monitor and control their energy usage as well as potential rate plans that encourage power use in off-peak time periods by varying rates based on the time of day. We work to make sure that the smart grid’s asserted benefits actually come to fruition and are fully accessible to the customers that utility companies traditionally haven’t done a good job of reaching, including those with limited English – since they, like all of us, are helping to pay for them.
We are also working to incorporate supplier diversity into smart grid deployment, to help ensure jobs and opportunities for diverse small businesses.