On Thursday, the California Public Utilities Commission (CPUC) approved establishing a monthly Income-Graduated Fixed Charge (IGFC) for large investor-owned utility (IOU) and Small and Multijurisdictional Utility (SMJU) electric customers pursuant to Assembly Bill 205 of 2022, which, among other things, repealed the cap on fixed non-bypassable charges that utilities may recover from customers to pay for infrastructure and operational related costs. According to the CPUC, the IGFC is intended to reduce usage rates on an equal cents per kilowatt hour basis, estimated at 5-7 cents per kilowatt hour (kWh). The state argues that migrating particular costs into a fixed monthly fee could stabilize rates through a more equitable cost recovery on all customers that isn’t solely based on how much electricity a customer consumes. 


This new billing structure will show up on monthly bills for Southern California Edison customers in the third quarter of 2025, while PG&E and smaller utilities, such as Liberty and PacifiCorp, will begin implementation in the first quarter of 2026. For large IOUs, the costs will be as follows: 


  • Tier 1: $6/month for low-income customers eligible for California Alternative Rates for Energy (CARE) Program. 

  • Tier 2: $12.08/month for Family Electric Rate Assistance (FERA) Program customers, or residents in affordable housing with incomes at or below 80% of the Area Median Income. 

  • Tier 3: $24.15/month for all other customers. 


By contrast, the following SMJUs will have fees established as shown here below:  

Income Tier 




Tier 1: Up to 100%
Federal Poverty
Level (FPL) 




Tier 2: 100-200% FPL 




Tier 3: >200% FPL 




The CPUC’s approval comes amidst public backlash and resulting pushback from numerous Legislators, efforts of which have largely stalled in the legislative process thus far. The CPUC intends to consider a process as to how to conduct customer income verification in the near future, as well as make incremental increases to the IGFC amounts, and use other rate mechanisms (such as time-of-use rate differentials) to reduce volumetric electric rates to support affordable electrification while promoting energy conservation. RCRC is not a party to this CPUC proceeding; for more information, see here or contact RCRC Policy Advocate Leigh Kammerich.