That mechanism already exists at the IRS. The utility could require the applicant/ratepayer to also complete form 4806-T, which allows the utility to get some limited tax return information directly from the IRS to confirm the copies provided match the filed tax return.
That form is routinely used in connection with mortgage lending, so it’s a well-known process.
—Peter
Annual checking is fine for things like insurance, but with salary it is subject to rapid change. Losing one’s job right after submitting paperwork at a high income level could be a real problem.
Data privacy & security! We can’t be handing out our income & SS #s to local utilities! It’s hard enough preventing identity theft and income information misuse/corruption with the feds, the states, the banks, colleges and some real estate management companies having “income verification data” and no data retention policies. Utilities? Comcast? PG&E? No way.
It’s kind of like containing a virus. Once it’s out there, there’s no going back. And it’s already out there. Your name, SSN, address, birthdate, income, phone number, e-mail, mother’s maiden name, and a whole lot of other personal info is already out in the wild. So is mine. And everyone reading this.
Adding one more potential leak source isn’t going to change things. Well, it might allow the nefarious to update their databases for new or changed info, and perhaps correct a few errors in their data. But that’s just window dressing.
If you don’t verify income data with someone, you’re going to have massive amounts of fraud. And there’s already a well-used process for verifying that info with the IRS.
I’d also point out that high income folks don’t need to provide the data. They’d just be denied the discount anyway. So they have no reason to participate. No reason to disclose their income because they won’t get a lower rate.
–Peter
It seems silly to entertain a system whereby we have to provide income information to a utility; income can change in a heartbeat, and freelancers even more often.
The easiest way to make it “progressive” is to charge by tiered usage. It’s a blunt tool to be sure, but smaller homes (and generally incomes) are going to use less, larger homes (with higher incomes) are going to use more. A lot more. It doesn’t matter to me how much you allocate to “production” and “grid” and “distribution”, that’s up to the utility to decide. (If I am using more electrons, I am by definition using more grid, more distribution, and more production.)
Set up a stepped-tier system, and since remote monitoring exists in most places now and computers can do drudge work, use the stepped-tiers for total usage, but give a credit back for use in off-peak periods (late night, overnight, etc.)
Then - and only then - set up a separate system for “hardship”, which would include those near or below the poverty line, or with special needs (medical equipment, perhaps, and others) to be adjudicated on a case-by-case basis. I’m sure there are 1000 possible “cases” and I couldn’t begin to list them all, but a “citizen’s panel”, independent of the utilities’ management, could review and decide on these sorts of things.
Stop making sense!
plus the required characters
CA already has that. At least from PG&E, but I assume all the other utilities as well.
And they send out inserts in the bill (when I got paper bills) that explain how to apply for low income assistance. It has been this way for decades that I can recall.
This new proposal is meant to get higher income people to pay even more and perhaps a way to get more fees from those with solar.
Mike
In spite of my talking about how to deal with an income-dependent system, I agree with you. Just charge by usage.
Of course, in CA we had such a system until a few years ago. Then we switched to time of use to reflect the significant solar production in the state. Now the high rates are in the late afternoon and early evening, when solar generation is waning and overall use in homes is rising.
So now that time of use rate structure isn’t working as well and we need to tweak again - likely back to tiered rates. Perhaps a hybrid approach. Tiered rates for each time of use bracket?
Probably won’t work well, either. There are always ways to game the system if you can afford to pay for the game. And if you can’t, well, too bad.
–Peter