Energy Affordability: How Soaring Rates are Harming Residents, Farms and Businesses
Energy affordability must be a growing concern for lawmakers and regulators. California’s electricity rates are already double the national average, and are rising five times faster than the rest of the country. Utility investments to make up for years of wildfire mismanagement and neglect are ensuring California’s already sky high electricity rates go even higher.
- Baseline residential rates have increased 59% (SCE), 104% (PG&E), and 126% (SDG&E) between 2009-2020.
- System average rates have increased as much as 45% from 2009 and are expected to continue rising at an alarming rate, far outpacing inflation.
- Residential rates are expected to reach 44¢/kwh (SDG&E), 33¢/kwh (PG&E), and 29¢/kwh (SCE) by 2030.
- Commercial and Industrial rates in California (14.28¢/kwh) are more than double those found in other neighboring western states such as Arizona (5.92¢/kwh), Nevada (5.02¢/kwh) and Oregon (6.13¢/kwh).
- Soaring agricultural rates are more than double those found in other states and are exacerbated by looming water shortages, which require farms to use more energy to pump water.
- Rapidly rising rates greatly exacerbate California’s highest in the nation poverty rate (18.1%) and worst in the country homelessness crisis.
Make no mistake, out-of-control electricity rates will further hamper what is expected to be a very difficult economic recovery and limit adoption of electric vehicles and other climate policies. Restaurants, small businesses and residents have been especially hard hit by the pandemic. Policymakers would be wise to avoid any new mandates that will lead to even higher energy costs and the wrath of already cranky voters back home.
Sources: 2011-2017 CPUC website; 2018-2020 utility filings; Public Advocates Offices, Electric Rate Trends; CPUC, Utility Costs & Affordability of the Grid of the Future; SCE Customer Briefing.