California is addressing the issue of spikes in electricity rates affecting the cost of charging electric vehicles (EVs) at home with a novel solution. The state is considering implementing a fixed charge on electricity bills from its largest utilities in exchange for a reduction in the per-unit price of electricity use. This move aims to ensure consistent revenue for utilities while lowering overall home-charging costs for EV owners.
A proposal from the California Public Utilities Commission (CPUC) suggests establishing a monthly flat fee of $24.15 for customers of California’s major investor-owned utilities, including Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). Additionally, income-based tiers would be introduced for the monthly charge to ensure fairness.
Customers enrolled in rate-reduction programs like the California Alternate Rates for Energy (CARE) would pay reduced monthly fees, with those in the Family Electric Rate Assistance program or living in affordable housing paying even less. Others not eligible for these programs would pay the full monthly fee. This proposal, stemming from legislation passed in 2022, is expected to be implemented by late 2025 or early 2026, potentially resulting in significant reductions in electricity rates.
The move comes as sharp increases in electricity prices have affected households nationwide, impacting the affordability of home EV charging. Prior to these hikes, the Department of Energy found that EV owners spent less than $1,000 per year on electricity to fuel their vehicles.
California has been actively working to lower the cost of home EV charging, particularly through time-of-use programs, recognizing its significance as a leader in EV adoption. However, similar initiatives in other states will be essential to sustain the momentum established by California, especially considering that over a third of all EVs in the U.S. are sold in the state.
