By law, federal and state tax returns are confidential.
Even some presidential candidates, most notably Donald Trump in both 2016 and 2020, have managed to use this fact to hide their finances from voters.
But now comes the latest bailout effort for California’s three largest electric utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.
The three worked together in 2022, lobbying a bill through the Legislature to partially link utility rates with household incomes. They sold their plan as a way to bring equity to power rates, where low-income families now pay about as much as the rich per kilowatt hour used.
In reality, if this plan comes to pass, it will be yet another consumer-financed bailout for utility companies, akin to the state Wildfire Fund and the “loan” soon to go to PG&E to help it keep the Diablo Canyon Nuclear Power Station open an extra five years to help ease the state’s transition to renewables.
While billed as advancing equity, the four-tiered fixed payment plan to be drawn up by the state Public Utilities Commission (PUC) will really act to discourage new rooftop solar installations and protect the big companies from the burgeoning Community Choice Aggregation movement taking hold from Sonoma to San Diego, Placer County to Pico Rivera.
CCAs offer both conventional and renewable energy at somewhat lower costs than the utilities charge.
The latest plan depends completely on utility company knowledge of each customer’s income. The four tiers are designed to make consumers pay set fees for being hooked up to the state electric grid, ranging from a low of $15 per month up to $92 monthly.
The companies say that will be accompanied by lower rates per kilowatt hour used, but anyone who knows the sordid history of electric rate making in California will understand lowered usage rates will soon rise right back to today’s levels or higher.
None of this, however, can happen without the utilities knowing the incomes of families and businesses that are their customers.
The Legislature assigned the PUC to decide how these huge companies get that information. That’s a form of putting the fox in charge of the henhouse, considering the commission’s long history of corruption, scandal and favoritism of utilities over their customers.
This is the agency that was caught conspiring with SoCal Edison to force consumers to pay the vast majority of the cost of dismantling the San Onofre Nuclear Generating Station after an Edison blunder disabled it.
It’s the same outfit that has never significantly punished PG&E for its manslaughter convictions in the Camp Fire that destroyed the town of Paradise in 2018 or hit hard at Edison for its part in igniting fires in Malibu and elsewhere.
It’s the agency where a commissioner who formerly represented the Cruise driverless car company just voted for letting it operate limitless vehicles in San Francisco.
The five PUC commissioners could mandate an honor system, asking each electric user their level of adjusted gross income. But anyone who knows human nature will understand that many customers would low-ball their incomes.
They could ask the state Franchise Tax Board to provide income levels to the companies, despite laws assuring confidentiality. But even if the tax board could securely turn over the information, there’s no guarantee utility company employees won’t leak some folks’ information.
The PUC could demand consumers show copies of tax returns in order to start or maintain service, but that could also subject taxpayer confidentiality to the whims of utility workers.
Any such tactic would certainly produce a blizzard of lawsuits protesting the obvious contradiction with privacy assurances.
But without solid income information, there’s no way utility commissioners can assure anyone they’re even trying to equalize electric price burdens among various economic classes.
So the PUC — so far completely mum on this key new responsibility handed it so blithely by the Legislature and Gov. Gavin Newsom — has a problem.
Whatever it does will cut into its already shaky credibility.
Far better to scrap this idea and develop a completely different plan to assure electric equity, even if that would mean admitting a mistake and then starting afresh.
Email Thomas Elias at [email protected].
