Affordability Rulemaking

In July 2020, the CPUC issued Decision 20-07-032 adopting metrics and methodologies for assessing the relative affordability of public utility service under the Commission’s jurisdiction, which concluded Phase 1 of the proceeding. The Decision adopted the revised staff proposal on affordability framework with slight modifications.

The Decision defined affordability as the degree to which a representative household is able to pay for an essential utility service charge, given its socioeconomic status.  A “representative household,” rather than households in general, recognizes that households will have a wide variety of experiences that cannot be perfectly captured by depicting a single household.  “Essential utility service charge” refers to the costs borne by a representative household for the quantity of utility service required to enable a ratepayer’s health, safety, and full participation in society.  “Socioeconomic status” refers to the social and economic standing of a given household.

The Decision also states that three independent, but related, metrics allow for the creation of a more complete picture of affordability than any one metric could provide on its own.  The three metrics are:  1) the affordability ratio, 2) the hours at minimum wage, and 3) the socioeconomic vulnerability index.

During Phase 1 the CPUC hosted several public workshops and webinars, inviting experts and scholars to share their expertise on public utilities and affordability. For archives of these presentations, as well as the staff proposal that resulted from these collaborative efforts, please see below.

Affordability Workshop #1 (Defining and Measuring Affordability)
January 22, 2019 | Webcast recording

• CPUC Energy Division presentation
• CPUC Water Division presentation
• CPUC Communications Division presentation
• Public Advocates Office presentation
• Manual P. Teodoro, Affordability Methodology (Affordability Ratio, Hours at Minimum Wage)
• Manuel P. Teodoro, PhD presentation
• Roger D. Colton, JD, MA presentation
• Todd Achilles, MPA, MAIS, MBA presentation
• Sarah Kimberlin, PhD presentation