California’s energy prices are 55% above national average, and hurt minority citizens the most

Real Clear Energy:

The wind and the sun may be free, but deriving electricity from them is anything but.

In 2020, some 9 million Californians were unable to pay their energy bills. The California Public Utilities Commission (CPUC) reports that customers of the major investor-owned electric and gas utilities accumulated $1.15 billion in unpaid bills during the year.

As a “clean energy” climate leader, California seeks to achieve a carbon-free economy before 2050, ensuring that its electrical system can withstand extreme weather events and supply affordable energy to 40 million people.

That last goal might be the biggest challenge.

The wind and the sun may be free, but deriving electricity from them is anything but.

California’s residential electricity price in 2020 was 20.50 cents per kWh, or 55% higher than the national average of 13.20 cents – an expensive energy problem that is only getting worse (see Figure).

The latest iteration of California’s Renewable Portfolio Standard (RPS), the 100% Clean Energy Act, was enacted in 2018. It requires California utilities to use 100% clean energy by 2045, with an interim requirement of 60% by 2030.

The costs are immense.

Experts at the University of Chicago’s Energy Policy Institute reported in November that “electricity prices increase substantially after RPS adoption,” adding $30 billion in extra costs after just seven years.

Here are just some of the numbers, according to new research from UC Berkeley’s Energy Institute at Haas:

  • Average residential prices per kWh in San Diego Gas & Electric’s (SDGE) service territory are about double the U.S. average.
  • Pacific Gas and Electric’s (PG&E) rates are 80% above the U.S. average.
  • Southern California Edison’s (SCE) prices are 45% higher than the U.S. average.
  • Since 2013, rates at San Diego Gas & Electric have risen nearly 50%, with customers of PG&E paying almost 40% more.

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