California should redesign its electricity rate structure to increase a newly adopted fixed charge, ease burdens in hotter regions and distribute costs more equitably, the Little Hoover Commission recommends in a new report.

The report, “The High Cost of Electricity in California,” also recommends regulatory reform including streamlining utility rate cases and an audit to determine if the state has enough capacity to provide rigorous oversight.

“Electricity bills are just one challenge of many for California families struggling to make ends meet,” said Commission Chair Pedro Nava. “We are offering practical solutions that can help reduce the stress they face.”

The report includes recommendations to improve equity and access, including redirecting climate credits to low-income households and those in hot regions of the state, and expanding support for low-middle income households. 

Lastly, the report recommends that rooftop solar investors recover their costs before any benefits are reduced.

Commission Vice-Chair Anthony Cannella, who served on the subcommittee that oversaw the study, noted that several of the commission’s recommendations address electricity costs in areas of the state plagued by summer heat, which can push up air conditioning costs.

“Like so many things in California, utility bills vary widely based on where you live in the state,” Cannella said. “I’m proud that our recommendations can help people living in the inland sections of the state, where costs are especially high.”

“California has an unprecedented demand for electricity — an inelastic commodity necessary for the health, safety, welfare, and now economic well-being of the state,” said Commissioner José Atilio Hernández, who served on the subcommittee with Cannella. “This report provides clear recommendations to ensure ratepayers have a path towards rate relief, and for California to create a better vision to minimize volatility in infrastructure costs.”

The commission began to study the cost of electricity at the request of members of the Legislature, and held four hearings to study the topic. 

More recently, the commission launched a new study on the impact of data centers on the state’s electricity rates, with hearings expected later this year.