California Electricity Bill Based on Income: Tiers, Limits, and Timing

California’s three big investor-owned utilities are adding a flat monthly charge to residential electric bills, and the amount of your California electricity bill based on income falls into one of three tiers: $6, $12, or $24.15 per month. The tier is set by whether you’re enrolled in an existing low-income assistance program, not by a separate income check at the utility. If you qualify for a discount program but haven’t signed up, you pay the top $24.15 tier by default no matter what you actually earn.¹

The charge applies to customers of Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. It was created by Assembly Bill 205, signed in 2022, which directed the California Public Utilities Commission to pull grid and customer-service costs out of the per-kilowatt-hour rate and into a separate fixed line item.

The Three Tiers and Who Pays What

Your monthly fixed charge is tied to enrollment in a specific assistance program or housing status, not a direct income verification by the utility.¹

$6 per month if your household is enrolled in the California Alternate Rates for Energy (CARE) program, which serves customers earning below 200% of the federal poverty level. Roughly a quarter of California households fall here.
$12 per month if you’re enrolled in the Family Electric Rate Assistance (FERA) program, which covers incomes between 200% and 250% of the federal poverty level, or if you live in deed-restricted affordable housing where incomes are at or below 80% of the area median income.
$24.15 per month for everyone else. If you aren’t in CARE or FERA and don’t live in qualifying affordable housing, this is your default.

A household earning $45,000 that never applied for CARE pays the same $24.15 as a household earning $500,000. The lower tier doesn’t find you automatically. You have to be enrolled.

Income Limits That Determine Your Tier

CARE and FERA eligibility scales with household size because it’s pegged to the federal poverty level. For the period from June 2025 through May 2026, the CPUC lists these upper income limits for CARE (the $6 tier):²

1–2 people: $42,300
3 people: $53,300
4 people: $64,300
5 people: $75,300
6 people: $86,300

FERA limits (the $12 tier) are higher:²

1–2 people: $52,875
3 people: $66,625
4 people: $80,375
5 people: $94,125
6 people: $107,875

These thresholds update annually. Rather than calculating from the federal poverty guidelines yourself, check the CPUC’s posted limits for your household size.

How to Get Into the Lower Tier

If your income is within the CARE or FERA limits, you enroll through your utility, not through a separate state agency. You can request an application from PG&E, SCE, or SDG&E on their websites, by phone, or through community partners.² The application involves self-certifying your household income. Utilities audit a percentage of enrollees afterward.

You can also qualify for CARE automatically if you’re already receiving benefits from certain public programs. The qualifying list includes Medi-Cal, SNAP, WIC, Supplemental Security Income, Head Start, LIHEAP, and the National School Lunch Program’s free lunch tier.² Enrollment in one of those programs serves as proof of income.

Deed-restricted affordable housing is handled differently. The utilities are checking databases like the California Housing Partnership to identify qualifying properties and assign those accounts to Tier 2 automatically. Where a match is inconclusive, residents can self-attest their deed-restricted status through the CARE/FERA application.³ Southern California Edison has estimated this automated matching could default as many as 100,000 tenants to the lower tier without any action on their part.⁴

What It Does to Your Total Bill

The fixed charge isn’t simply added on top of what you already pay. It replaces costs that used to be built into the per-kilowatt-hour rate, so the usage portion of your bill goes down at the same time. The CPUC estimates the per-unit rate will drop by 5 to 7 cents per kilowatt-hour for all residential customers.⁵

Whether you come out ahead depends on how much electricity you use. A household running 800 kWh per month saves $40 to $56 from the lower rate. Even after paying the $24.15 Tier 3 charge, that household nets $16 to $32 in monthly savings. CARE households at $6 save substantially more. The clearest winners are high-usage homes: inland houses running air conditioning, EV chargers, and all-electric heating.

Low-usage homes see the opposite. At 200 kWh per month, the rate cut saves only $10 to $14, and the $24.15 fixed charge more than cancels that out. Coastal households in mild climates, retirees in small apartments, and anyone who has worked to keep consumption low may see a modest increase. CARE enrollment largely absorbs that effect, because a $6 fixed charge against $10 to $14 in rate savings still comes out ahead.

If You Have Rooftop Solar

The fixed charge applies to your account regardless of how much electricity your panels produce. Even if your system generates more than you consume in a given month, you still owe the flat fee. A productive solar installation can no longer push a monthly bill to near zero. The fixed charge sets a floor.

The lower per-kilowatt-hour rate also reduces the value of electricity your panels export. Net energy metering credits are tied to the retail rate, so when that rate falls by 5 to 7 cents, each exported kilowatt-hour is worth less.⁵ Together, these two effects lengthen solar payback periods compared to the old rate structure.

When It Hits Your Bill

The rollout is staggered across the three utilities. Southern California Edison and San Diego Gas & Electric were directed to apply the fixed charge during the fourth quarter of 2025, between October 1 and December 15.⁶ Pacific Gas & Electric follows between January 1 and March 31, 2026.⁷

If you think you qualify for CARE or FERA and haven’t enrolled, apply before your utility’s implementation date. Enrolling early means your first bill under the new structure reflects the discounted tier instead of the $24.15 default. You can still apply after your utility switches over, but you’ll pay the higher rate until the application is processed.

1
California Public Utilities Commission. CPUC Decision Cuts Price of Electricity Under New Billing Structure
2
California Public Utilities Commission. CARE/FERA Program
3
California Public Utilities Commission. Decision on Fixed Charge Implementation for PGE
4
California Public Utilities Commission. Decision on Income-Graduated Fixed Charge Implementation for SCE
5
California Public Utilities Commission. CPUC Approves A New Billing Structure That Will Cut Residential Electricity Prices And Accelerate Electrification
6
California Public Utilities Commission. Decision on Income-Graduated Fixed Charge Implementation for SCE and SDGE
7
Pacific Gas and Electric. Advice Letter 7351-E