Gas and electric energy rates are skyrocketing in California, harming residents, business, as well as farming and food production operations.
California’s already expensive energy rates are continuing to rise with massive new rate increases proposed by the State’s investor-owned utilities.
Surging electricity and natural gas prices for the state’s major investor-owned utilities have already reached levels that are more than double the national average and will soon reach levels that are three to four times higher that the rest of the country. Rates are also rising far faster than inflation driven by clean energy and electrification mandates as well as wildfire mitigation. These out-of-control energy cost impacts are straining the budgets of vulnerable, low-income households and fixed-income seniors, while causing further increases to the costs of everything from food, to fuel, to many other consumer goods and services.
Consider the following:
- Between 2010 and 2021, SDG&E’s rates increased 78%, PG&E’s rates increased 47%, and SCE’s rates increased 42% with more pending.
- PG&E is proposing to increase rates by more than 36% in 2023 alone. Additional double digit increases are looming in 2024, 2025, and 2026.
- Southern California Edison (SCE) increased rates by more than 6% on March 1, 2023 with additional increases slated for later this year.
- SoCalGas Company is proposing to raise rates more than 40% on top of devastating natural gas price spikes that cost ratepayers billions of dollars during December 2022 and January 2023.
- CPUC staff has indicated that wildfire mitigation costs from 2021 to 2030 will cost PG&E $23.7 billion, SCE $17.2 billion, and SDG&E $3.9 billion, with all of these costs passed on to ratepayers.
- Tens of billions more will need to be spent on major distribution system upgrades needed to manage new load from electrification of cars, homes, and businesses.
- The California Independent System Operator (CAISO) has estimated that the state will need more than $30 billion in new transmission capacity to achieve renewable energy targets by 2040. Every dollar added to transmission rate base costs ratepayers in excess of $3.50 over the life of the transmission asset.
Bottom line: California is facing a looming crisis if policymakers want residents to swap gasoline-fueled cars and natural gas appliances for electric models.
“Mandating electrification when you’re charging people 30 or 40 cents a kilowatt-hour is going to be immensely expensive.”
Severin Borenstein, UC Berkley Haas School of Business Energy Institute
Visit the pages below for more on our efforts to combat skyrocketing rates.