Tipping Point

How Rapidly Rising Energy Costs Could Harm State Economy and Climate Programs

California’s electricity rates are already 60% higher than the rest of the U.S. and rising five-times faster. In just the last seven years rates have risen nearly 30%.

PG&E’s rates could exceed 27¢ per kilowatt hour by 2020 based on pending rate increases, not including any liability costs. That is more than 2½ times the national average.

California’s rates will rise even further due to a number of factors, including:

  • Short-term wildfire mitigation plans
  • System hardening to reduce long-term wildfire threats
  • Continued expansion of renewable energy and other clean technologies
  • Massive utility liability from 2017 and 2018 wildfires
  • Expansion of electric vehicle charging infrastructure
  • Increasing utility profits
  • Ongoing wildfire risk

Policymakers Must Hold PG&E Accountable
Time for Real Reform

All total, rates are likely to rise substantially and could more than double in just the next few years, increasing costs for California ratepayers by tens of billions of dollars annually.

These rapid increases in electricity rates are creating a “tipping point” where California’s ratepayers and economy will be irreparably damaged if they continue. Higher energy costs would place California businesses at a significant disadvantage when competing with out-of-state businesses. Rapidly rising rates will also negatively impact California’s climate policies, including efforts to maintain progress in electrifying the transportation sector.[1] Dramatically higher rates would also make any building electrification transition harder, sacrificing greenhouse gas reductions.[2]

Consider the following:

  • PG&E expects to spend approximately $7.8 billion on wildfire mitigation activities through 2023[3] as part of an overall $21 billion “system hardening” plan.[4]
  • PG&E alone is facing an estimated $30 billion in liability related to the wildfires that occurred in just the last two years.[5]
  • SCE is facing up to $10 billion in wildfire related liability costs.[6]
  • Edison’s rate base is expected to grow by $8.5 billion from 2017 to 2020, an annual increase of nearly 10%.[1]
  • SDG&E rates, which are already the highest in the state, are expected to grow by an additional 18.3% over the next two years.[2]
  • PG&E, SCE & SDG&E have requested outrageous increases in shareholder profits (over 16% return on equity) that will cost ratepayers billions of dollars annually.[3]

All Total – Tens of Billions of Dollars in Ratepayer Impacts


[1] The Massive Cost of the “New Normal” in Wildfires and Climate Change Era

[2] IBID

[3] Source PG&E Corp: California Energy Markets

[4] Utility Dive

[5] Sacramento Bee

[6] Los Angeles Times

[7]  California Energy Markets

[8] AECA analysis of approved & pending rate increases

[9] CPUC filings