Why fixed charges are unfair to utility customers
- Factsheet
Fixed charges defined
When you think of your monthly electric bill, what probably comes to mind are your variable charges. This is what your utility charges you based on the amount of electricity you use.
Fixed charges are the other part of your electric bill. They represent the money you owe regardless of how much power you consume. They are consistent fees you pay just to be a utility customer.
Misuse by monopoly utilities
Fixed charges tend to be bad for customers, but good for profit-seeking utilities. Unlike variable charges, customers can’t reduce fixed charges by going solar, conserving energy, or making efficiency upgrades. Fixed charges discourage efficiency and limit homeowners’ ability to save money with solar.
Increasingly, utilities are attempting to restructure electricity bills so that more of each bill is made up of fixed charges. Some utilities propose to more than double their fixed charges.
Monopoly utilities have used fixed charges to:
- subsidize non-competitive power plants and extend their operation,
- prop themselves up when they’re insolvent, having made bad investments, and
- pay for the construction of utility-owned renewable energy, which limits homeowners’ ability to benefit from distributed solar.
How SUN is fighting for consumers
Solar United Neighbors tracks attempts by utilities across the country to raise fixed charges. We keep a close watch on both bodies that can make these increases: state public utilities commissions and state legislatures.
Fixed charges take many forms, but the end result is less freedom for consumers. The higher the fixed charges, the less we can impact our electric bills by conserving or producing our own power. We’re fighting against increases in fixed charges, because they’re unfair to consumers.
Dig deeper into co-ops
We work all over the U.S to defend the rights of solar owners against unfair regulations like rising fixed charges.
Resources on fixed charges
Learn more about fixed charges and what is being proposed across the country:
- Communicating to fight demand charges – This presentation from Resource Media provides a concise, useful guide for explaining demand charges and how to fight against them.
- New explainer video on utility fixed charges (and donuts). This video on Medium explains what fixed charges are, how to identify them, how they harm people who use less electricity, and how donuts help illuminate it all.
- For utility customers in Indiana or Virginia, view the specific information we’ve compiled about fixed charges in your state.
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