Liberty and Higher Electricity Rates for All

As California navigates its turbulent wildfire landscape, a new impact looms for Tahoe-area residents: a significant hike in their electricity bill. The proposed increase by Liberty Utilities faces a complex review process before any decision is finalized, with different advocacy groups going to bat for customers. But Liberty’s case reflects a larger situation across the state: Utility providers are charging their customers more than ever in the name of wildfire mitigation.

Liberty (CalPeco Electric), the electric provider for the California side of the Lake Tahoe Basin and beyond, seeks to increase its revenue by 19% in 2025, and further increase its revenue requirements in 2026 and 2027. The investor-owned company says the proposed hike is primarily due to wildfire mitigation and rising insurance expenses.

If approved by the California Public Utilities Commission (CPUC), an average-use residential customer’s monthly bill would increase by 20.6%, or $37.51. That said, Liberty’s suggested hike also proposes combining permanent and non-permanent residents into one rate class, meaning an average-use permanent residential customer (one who lives in their residence more than 183 days, or about 6 months, a year) is expected to see their monthly bill rise by $45.80, or 23.5%.

Meanwhile, residential electricity rates in California increased by approximately 47% between 2019 and 2023, making them nearly double the national average, according to a January 2025 report from the state’s Legislative Analyst’s Office.

“Generally, there is an affordability crisis in California right now. And yes, increases [in utility rates],” said Britt Marra, executive director of the nonprofit Small Business Utility Advocates, which is taking part in Liberty’s application discussions. “We’ve participated in Liberty [general rate cases, or GRCs] in the past. Increases are expected. This definitely is an extraordinary case in that the increase is extraordinary.”

The utility company says it recognizes the “magnitude” of the requested increase, per its application, “and does not take it lightly, but the work that drives the requested increase is essential to maintaining system safety and reliability and to protect customers from extreme wildfire risk.”

Hot on California’s heels

Liberty’s service area in California spans north to south from Portola to Markleeville. About 80% of its customers reside in the Tahoe Basin, and the majority of its coverage area is considered high-fire risk.

The company is regulated by the CPUC as a “smaller, multi-jurisdictional utility” — one of three in the state alongside Bear Valley Electric Service and PacifiCorp. As such, Liberty is allowed to adjust its rates for customers every 3 years through a GRC application, which is reviewed by the CPUC and other interested parties before a decision is ultimately made.

Across the state, utilities have ramped up wildfire mitigation in recent years. Such catastrophic fires as the Dixie Fire (2021) and Camp Fire (2018) were found to have been started by Pacific Gas & Electric Company utility equipment, and it’s been reported that a Southern California Edison powerline may have played a role in sparking the devastating Eaton Fire on Jan. 7, 2025, in Los Angeles. California law states electric utilities can be found liable for damage from fires started by their equipment, even if not found negligent.

“Approximately 60% of Liberty’s requested revenue increase is related to increased costs of wildfire insurance,” shared Dan Marsh, Liberty’s senior manager over Liberty’s rates and regulatory affairs, in an email with Moonshine. Since the utility’s last GRC in 2022, its wildfire insurance premiums have increased from $7.962 million (Liberty’s currently authorized amount) to an anticipated $31.706 million in 2025. A variety of insurance companies provide Liberty’s wildfire insurance coverage.

Beyond insurance, Marsh says “the majority of the rate increase is related to preventing wildfires, responding to wildfires, improving the resiliency of the system should a wildfire occur, and recovery of the system and service after a wildfire has occurred.”

At the table or not

The GRC application doesn’t mean the increase is a done deal, nor are the numerous discussions with parties of interest merely for show. In fact, Liberty’s last GRC application decision was 8.6% lower than what the company asked for, and instead of the requested 41.4% monthly increase to an average-use residential customer, it was 22.6%.

“There’s definitely a balance,” Marra said of Liberty’s need for wildfire mitigation. “Safety and reliable utilities balancing with ‘are these fair and reasonable for the customer or for the ratepayer?’”

The table to the right shows current and proposed average bills for different Liberty rate classes.

As of publication, those involved are awaiting CPUC’s Administrative Law Judge Patrick Petersen to determine the final list of parties, scope, schedule, and other procedural matters. Six groups have requested involvement in discussions with Liberty and the CPUC for this proposed change:

• A-3 Customer Coalition, representing large commercial customers, including the South Tahoe Public Utility District, Palisades Tahoe Resort, Heavenly Mountain Resort, Northstar California Resort, North Tahoe Public Utility District, and Marriott Grand Residence Club/Timber Lodge
• Public Advocates Office at the California Public Utilities Commission (Cal Advocates), representing all customers
• Tahoe Energy Ratepayers Group (Tahoe ERG), representing residential energy customers
• Small Business Utility Advocates (SBUA), representing small businesses
• The Alliance for Housing Opportunities in Energy Supporting Permanent Affordable Residential Kilowatts (TAHOE SPARK), representing permanent residential ratepayers
• The Utility Reform Network (TURN), representing residential ratepayers

TAHOE SPARK’s potential involvement in the formal discussions has been met with pushback. Taff-Rice, on behalf of Tahoe ERG, submitted a formal response to SPARK’s request, suggesting denial on grounds of a lack of required disclosures and “the likelihood that the group’s participation will create undue delay and prejudice existing parties.”

Carnelian Bay resident Danielle Hughes created TAHOE SPARK in November 2024, alarmed by not only the rise in rates, but what she considers an unfair combining of the residential groups.

Liberty is choosing to combine the residential classes on the basis that “there are insufficient differences” in use to warrant different rates. Currently, Liberty Utilities charges are higher for non-permanent residents, classified as those who live in their homes fewer than 183 days a year. Permanent residents pay $0.26926 per kilowatt hour per day; non-permanent residents pay $0.29402. Of Liberty’s near 50,000 customers, about 18,000 are permanent residents and 27,000 are non-permanent. The bifurcated residential class was already established by the time Liberty purchased the utility system in 2011 from Sierra Pacific Power Company.

“Liberty says they don’t have any data to show that it costs more to serve one class than the other, so it makes no sense to maintain two separate classes,” said Anita Taff-Rice, legal counsel for Tahoe Energy Ratepayers Group, a participating party in the 2025 GRC conversations. “What we’re after is rational, merit-based rate-making that is based on the data.”

Hughes, who works for the California Energy Commission and is a board member of the North Tahoe Public Utility District and Truckee North Tahoe Transportation Management Association, believes the Tahoe ERG is made up of non-permanent residents interested in seeing their rates drop, and subsequently unfairly raising permanent residents’ rates. Hughes has been living in the Basin full-time since 2005.

“This Residential Non-Permanent user group utilizes the region’s limited housing stock as corporate housing, commercial spaces (short-term rentals, mini hotels), or as second, third, or even fourth home getaways, often all of the above,” TAHOE SPARK stated in its motion for party status. “These uses increase energy demand, greenhouse gas emissions, wildfire risks, loss of workforce housing, and associated cost of living in an inequitable manner.”

Low-income customers can qualify for California Alternate Rates for Energy (CARE), which offers both a cheaper customer charge (per meter, per month) and kWh charge.

Tahoe ERG was formed in reaction to Liberty Utilities’ 2022 GRC. Taff-Rice, who has been serving as counsel for the group since its inception, said the members began looking into how Liberty was designing its rates. “We realized there was no definition for who constituted permanent or non-permanent,” she said. “So, at the very outset, it became obvious that people might be misclassified because there was no definition. That was one of our primary interests: a sense of fairness. If you’re going to have two classes of customers, let’s at least make sure that people are in the correct class.”

The 183-day determination was a result of Tahoe ERG’s involvement, but it wasn’t the only concern the group raised. “The second thing was we began to question whether it actually was justifiable to have two categories of customers,” Taff-Rice said.

While nothing explicit came of that latter topic during the 2022 GRC proceedings, the group formally reserved “its right to seek the elimination of the Non-Permanent customer class in future proceedings (rate case or otherwise),” per the final decision.

Liberty’s 2025 GRC proposal to combine the classes did not stem from Tahoe ERG, Marsh said. Rather: “The proposal is driven by the CPUC’s income-graduated fixed charges rulemaking, which allows for higher fixed charges to include costs that do not differ based on electricity usage. A higher fixed charge will be offset by a lower variable charge. The higher fixed charge will allow for all customers to pay their fair share of fixed charges, such as wildfire mitigation and vegetation management, which benefits all customers.”

Liberty residential customers are currently charged a base rate of $13.83, permanent or not. The utility proposes increasing that rate to $41.40 for the newly combined residential class.

Hughes claims that Tahoe ERG only has non-permanent resident members. Four individuals created the group: Joanne H. Kerbavaz, who is listed in its first meeting minutes in September 2021 as residing in Half Moon Bay, California, with another residence in South Lake Tahoe; Chris Rodgers; James D. Wood; and Karen Miller.

This definitely is an extraordinary case in that the increase is extraordinary.”

~ Britt Mara, Small Business Utility Advocates executive director

Taff-Rice told Moonshine some of the members are considered permanent based on the 183-day definition. “It is not fair to say that we are representing only one subgroup of ratepayers or that we’re trying to pit one group against another,” she added.

Hughes currently oversees TAHOE SPARK by herself. She originally hired legal counsel to review her concerns, but said, “I haven’t had the time to fundraise, so I had to let him go. I’m moving forward on my own. I might bring him in if I can get some additional funding behind me.”

She added that the attorney “did see why the [proposed] rate structure wasn’t going to work for a tourism economy.”

Truckee Donner Public Utility, which serves the greater Truckee area, is publicly owned, meaning its operated by a government entity and prioritizes community over profit, contrary to an investor-owned utility, which aims to generate profit. The TDPUD utilizes a permanent and non-permanent resident rate and has done so for decades. Currently, on top of the same base rate, permanent residential customers pay $0.1864 per kwh; non-permanent residents, $0.2120. Their status as either group is based on where customers vote or register their vehicle rather than the amount of time spent in Truckee.

The road ahead

The Liberty rates process is still in early stages. As of press deadline, those involved haven’t submitted testimonies on their formalized positions.

An initial schedule proposes testimonies, possible hearings, and possible briefs occurring between May and September, with a final decision issued Dec. 19 of this year.

In the meantime: “We have an expert reviewing the proposal,” Marra said, adding that in addition to comments on the proposed rates, SBUA has heard from Tahoe small businesses and business associations “complaints … that they’re not getting the same services as other utility customers.”

After the parties produce their own testimonies, Liberty will have the opportunity to file rebuttals.

“If we don’t settle, what would happen is we would all then have a hearing, which is the equivalent of a trial in a regular court,” Taff-Rice explained.

She furthered: “If we actually have to go to hearing I think there’s a reasonable chance that probably the parties would be able to settle because we were able to accomplish that at the last rate case.” The decision to Liberty’s 2022 GRC came nearly 2 years later in the form of an all-party settlement.

Public hearings are anticipated, information about which Liberty will provide to its customers. The community is also encouraged to leave public comment on the CPUC website by searching the case’s docket number, A24-09-010. As of publication, 250 individuals have left comments.

“I do think that rate cases give an opportunity for consumers to come in and say, well, wait a minute, why are you doing it this way?” Taff-Rice said. “And if the answer is, ‘well, we’ve always done it that way,’ I don’t find that satisfying.”

At a Glance, Liberty Utilities Percentages

19.1%
Overall requested revenue increase by Liberty Utilities

20.6%
Average-use, combined residential customer monthly bill increase

~60%
Liberty’s proposed increase related to wildfire insurance cost increases

63%
Liberty’s service territory considered a high-fire threat district

80%
Liberty’s customer base living in the Tahoe Basin

93%
Liberty’s electrical equipment and infrastructure located in high-fire threat districts

~300%
Liberty’s cost increase in wildfire insurance premiums