[curriculum]

California is moving towards a system which would introduce a monthly fixed cost based on your income, while simultaneously decreasing the cost of electricity per kWh (see: AB 205). Heat pumps become more attractive after such a change.

[pxmpxm]

Taking money from person A and giving it to person B doesn't actually make anything cheaper.

[curriculum]

My claim wasn't that an Income Graduated Fixed Charge would make your electric bill go down from what it currently is -- it could very well go up.

My claim is that, assuming an IGFC is implemented and the marginal cost of electricity goes down considerably, then a heat pump becomes cheaper to operate. You'll be paying the same fixed cost to be connected to the grid, whether you have a gas furnace or an electric heat pump. It might just be that the newly-lowered electric rates finally make a heat pump more cost-effective than a gas furnace.

[talldatethrow]

Wait, so once they set your rate you can use as much electricity as you want and still pay the same rate?? That's insane. Crypto miners and EV drivers rejoice.

[curriculum]

Not quite. Right now, (most) California residential electric bills are entirely volumetric, meaning that you pay for what you use — if you use zero, you pay (close to) zero. Under the new system, everyone’s bill will instead have a sizable fixed component (determined by household income) for being connected to the grid, and a volumetric component (determined by the amount that you use). The new price per kilowatt hour will be smaller than the existing rates.

[HardlyCurious]

Energy cost has long been viewed as a means to constrain consumption. This new approach seems to undermine that approach given the reduced cost per volume.

If I'm paying entirely based on volume, then making my home twice as efficient makes my bill half as much. But under this new system, I wouldn't realize the same savings.

Seems like a policy set with priorities other then environmental protections.

[curriculum]

> Seems like a policy set with priorities other then environmental protections.

There are definitely other non-environmental considerations at play, the largest being that the increasing number of home solar installations has reduced revenue streams for utility companies, while at the same time their costs have increased due to grid maintenance and wildfire prevention projects (and lawsuit payouts). Most houses with solar are still heavy users of the grid, yet they pay very little towards its upkeep. This pushes the costs onto people without solar, who tend to be renters or low income households.

> Energy cost has long been viewed as a means to constrain consumption. This new approach seems to undermine that approach given the reduced cost per volume.

The idea that electricity consumption must be constrained makes sense when the electricity is generated by fossil fuels -- replacing a gas furnace with an electric heat pump when the electricity is made by burning coal is not a big improvement. But we're entering a world where most of the electricity is generated by clean solar, and constraining usage doesn't reduce emissions quite as much. In this world, a heat pump powered by solar is a real improvement over a gas furnace, environmentally-speaking. But a heat pump only beats a gas furnace in terms of cost to operate if the price of electricity comes down relative to the price of gas.

From that perspective, removing constraints on electricity usage is not a bug, but a feature.