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Fixed Charge: What Is It?

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A fixed charge separates the cost of your electricity use — which can vary each month — from the cost of power lines, transformers and other equipment and services that generally doesn’t vary each month. 

By separating the costs, you pay less for each kilowatt hour of electricity. 

The California Public Utilities Commission approved this fixed charge in May 2024, and it will begin for SCE residential customers in late 2025.

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Get the Facts About the Fixed Charge

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Lower prices for electricity

The fixed charge lowers the price customers pay for each kilowatt hour by 5-7 cents.

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Simpler, more stable bills

A fixed charge helps keep bills more stable on a month-to-month basis.

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Similar to cell, water and cable service bills

Almost all publicly owned utilities in California and most utilities nationwide have a fixed charge on bills.

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No income verification required

Customers enrolled in income-qualified programs receive a discount on the fixed charge.

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Frequently Asked Questions

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Energy bills are made up of fixed costs and the costs of electricity customers use. 

Fixed costs generally don’t change month-to-month. They include costs of safely building, maintaining and operating the electric grid, connecting each customer to the grid, providing customer support, and of state programs to help income-qualified customers and support energy efficiency. 

The cost of electricity usage can vary from month to month. SCE buys fuel to generate energy and also buys power from other companies; by law, the costs get passed through directly to customers without any markup. 

Today, both fixed costs and electricity usage costs are combined on residential customers’ bills into an energy charge. The new law (AB 205) requires costs to be separated into a monthly fixed charge to cover certain fixed costs, and an energy charge based on the electricity the customer uses during their billing period.   

AB 205 also requires that when implemented, the fixed charge results in lower bills (on average) for lower-income customers.

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All residential customers. That includes homeowners and renters, including those with or without solar panels.  

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On average, all low-income customers enrolled in CARE or FERA will save on their monthly bills.

The change cuts the price all SCE residential customers pay for each unit of electricity.

The rate reduction helps to make it more affordable for customers to use electric vehicles, stovetops, heat pumps and other clean energy solutions, regardless of income or where they live.

By cutting electric rates, the fixed charge intends to accelerate the state’s transition to 100% clean electricity. 

A fixed charge separate from energy charges helps keep bills more stable and less volatile on a month-to-month basis.

The fixed charge ensures that everyone who uses the electric grid helps to pay for its operation and upkeep.

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The fixed charge is not a new fee or tax. It simply shifts how existing costs are shared among utility customers.

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The standard fixed charge is $24.15/mo. 

Income-qualified customers receive a discount

CARE (California Alternate Rates for Energy) program customers’ fixed charge: $6/mo.

FERA (Family Electric Rate Assistance) program customers’ fixed charge: $12/mo.

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No. Utilities will receive the same amount of money as they receive today for the investments they make in operating and protecting the electric grid.

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In June of 2022, the California Legislature passed and Governor Newsom signed Assembly Bill 205, mandating the CPUC change the way residential customers’ electric bills are structured.

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