Written by Natalia Toliver
First it was gas prices, now it is our electrical bills. Everything is rising and becoming more expensive here in California.
Californian’s electricity bills are among the highest in the country. A study done by the energy institute at UC Berkeley’s Haas Business School and the nonprofit think tank Next 10, found the PG&E customers pay 80% more than the national average.
Southern California Edison charges 45% more than the national average. The study also found that even those currently enrolled in California Alternate Rates for Energy program paid more than the national average.
A UC Berkeley assistant professor stated, “California’s retail prices are out of line with utilities across the country, and they are increasing.”
Part of the reason prices are so high is due to California’s size and geography. This inflates the cost of operating its electrical systems which include, “maintenance, generation, transmission, and distribution as well as public programs like CARE and wildfire mitigation.” Though the fixed cost does not change, the study found the 66%-77% of electricity bills are used to offset the cost of those programs.
This is not the only factor, however, as other large states like Texas do not suffer from this problem.
A big factor of the rising costs is what people are doing to avoid them. As electricity prices rise, more and more people are switching over to solar. This shrinks the customer base of electricity companies, however fixed costs like maintenance remain the same. Therefore the price rises even more for those who don’t have or can not afford solar, because the costs are being divided among a smaller group of people.
Even further contributing to the high costs are California’s strict energy regulations. Luckily, SDG&E recently went to bat against the state and won regarding high usage charges. Previously, customers had to deal with the state-mandated High Usage Charge (HUC) – a substantially higher price for electricity that kicks in for customers once their energy usage exceeds a certain threshold. However, SDG&E has won the right to eliminate those charges, which will help substantially to stabilize customers electricity bills.
The high usage charge is far from the only state regulation that is keeping energy prices high, but it is good to see that SDG&E is doing what they can to lower customer bills. California’s disdain for fracking and disincentivization of non-green energy sources will continue to hurt the energy market and keep energy bills high.
Photo via OYA Solar
