California’s green energy push has helped shove electric bills skyward: new state report
The California quest for a green energy Holy Grail has become a major contributor to soaring monthly electricity bills charged by PG&E and its utility siblings, a disquieting new state report shows.
PG&E, San Diego Gas & Electric and Southern California Edison levy charges for monthly bills that are far higher than the national average, making California electricity rates the second highest in the United States, the state Legislative Analyst’s Office reported on Tuesday.
“California’s electricity rates are among the highest in the country,” the Legislative Analyst’s Office reported. “On average, residential electricity rates in California are close to double those in the rest of the nation.”
The increase in electricity bills has been nothing short of shocking, especially when compared with the overall inflation rate.
“Average residential electricity rates in California have grown faster than inflation in recent years, rising by about 47% over the four-year period from 2019 through 2023 compared to overall growth in prices of about 18%,” according to the report from the Legislative Analyst, a nonpartisan group that provides the state Legislature with advice and information.
From 2019 through 2023, monthly electricity rates for residential customers have increased by an average of 48% for PG&E, 57% for San Diego Gas & Electric and 67% for Southern California Edison, according to the report prepared by Helen Kerstein, an analyst in the office’s environment and transportation unit.
The report determined that multiple factors appear to have fueled the jaw-dropping surge in electricity costs in California.
Among the key influences:
— significant and increasing wildfire-related costs.
— the state’s ambitious greenhouse gas reduction programs and policies.
— differences in utility operational structures and services territories.
“High and increasing electricity rates add cost burdens to ratepayers across the state,” the Legislative Analyst’s Office reported. “Many residents who earn lower incomes or live in hotter regions of the state are feeling these growing costs even more acutely.”
Only Hawaii has higher electricity rates than California, the report determined.
California is also in danger of creating an energy catch-22 whereby the push to go green could hobble the state’s clean power efforts.
“High electricity rates impede the state’s efforts to meet its ambitious climate goals by discouraging households from pursuing electrification through switching out their fossil fuel-powered cars and appliances,” the report stated.
Gov. Gavin Newsom and the state Legislature are among California’s most forceful proponents of a green energy future.
One tiny bit of encouraging news came into view this month, at least for PG&E residential customers.
PG&E customers who reckoned with a series of rate increases in 2024 can expect a respite in early 2025 as combined monthly bills are poised to be only a bit higher compared to a year ago.
A typical PG&E residential customer who receives both electricity and natural gas services from the investor-owned utility can expect to pay about $295 a month starting with their January 2025 billing cycle.
This would be $1 higher than the $294 a month that typical PG&E residential customers were paying for combined electricity and gas services in January 2024.
“We are delivering on our commitment to stabilize customer bills,” PG&E spokesperson Mike Gazda said.
Plus, monthly electricity costs for PG&E customers actually declined $11 in January of this year compared with January 2024. PG&E electricity bills are now averaging $211 a month while gas bills average $84 a month.
“PG&E’s residential electric bills are about 4% lower today than they were in January 2024, assuming the same usage,” Gazda said. “We are working to limit increases over the next two years.”
It’s also a dramatic turnaround from the increases ratepayers had experienced in recent years.
The January 2024 monthly bill for combined PG&E residential services was 22% higher than the $241 a month customers paid in January 2023.
Yet even in the face of a relatively modest increase so far in 2025 for PG&E residential ratepayers, the Legislative Analyst’s Office warned that the significant increases in electricity rates may continue to burden customers.
“These trends currently are on track to continue,” the nonpartisan office stated in its report.