This February 2021 report was produced by California non-profit Next 10 in collaboration with the Energy Institute at UC Berkeley’s Haas School of Business. The groundwork for the transition to renewable energy has been laid, but changes to how the California and its residents pay for electricity will be needed to ensure equitable outcomes as the state pursues a carbon-neutral path, the report concludes. In particular, the current system of recovering system costs through high volumetric prices is not only inefficient; it imposes a relatively large burden on lower- and average-income households while it recovers a shrinking fraction of system costs from higher-income households because of the diffusion of rooftop solar. A variety of potential approaches to ensure utility revenues can be kept stable without relying on the current rate model are described.
Key words: Energy Management, Market Sizing, Research & Development, Smart Grid, Utilities, Electricity Rates, Public Policy