Editor’s Note: this article has been updated to include additional billing details.

If you earn more, you pay more.

That’s the basic idea behind sweeping changes proposed by California’s three largest power companies that will impact your electricity bill.

Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric submitted a joint proposal to the state’s Public Utilities Commission last week that outlines the new rate structure. It follows last year’s passage of Assembly Bill 205 which requires a fixed rate and generally simpler power bills.

Under the proposal, households will see a fixed rate covering basic electricity services and the utility company’s operating costs on a scale based on their household income.

  • Households with annual income from $28,000 – $69,000 would pay $20 a month in Edison territory, $34 a month in SDG&E territory and $30 a month in PG&E territory.
  • Households earning from $69,000 – $180,000 would pay $51 a month in Edison and PG&E territories and $73 a month in SDG&E territory.
  • Those with incomes above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory.

The utilities say customers should expect to also see lower costs for their kilowatt-hour usage.

“That law was intended to lower the amount that residential customers pay … while increasing transparency with bills,” Southern California Edison spokesperson Kathleen Dunleavy told KTLA on Friday. “This will provide relief to millions of customers.”

SCE says approximately 1.2 million of its lower-income customers will see their bills drop by 16%-21%. Overall, rates will decrease by about 33% per kilowatt hour for all residential customers, the utility says.

“We have listened to and heard from our customers that fundamental change is needed to provide bill relief,” SDG&E CEO Caroline Winn said in a statement. “When we were putting together the reform proposal, front and center in our mind were customers who live paycheck to paycheck, who struggle to pay for essentials such as energy, housing and food.”

State law requires the CPUC to adopt a new rate structure by July 1, 2024. Southern California Edison says the earliest customers would see the updated bills is 2025.