California electricity costs have more than doubled, says energy columnist.
California’s High Utility Rates: A Burden on Residents
It’s widely known that California boasts some of the highest utility rates nationwide, with recent statistics revealing Golden State residents pay more than twice the national average.
As of July, the average national electricity rate is 17 cents per kilowatt hour, while in California, residents are paying 28 cents in Los Angeles; 35 cents in San Francisco, and 48 cents in San Diego, according to the U.S. Bureau of Labor Statistics.
“We are in California, bearing this tremendous burden financially, to model good climate behavior. And it doesn’t do anything,” Susan Shelley, a columnist with the Southern California News Group and a long-time writer on California’s energy-related issues, said in a recent interview on EpochTV’s “California Insider.”
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In 2018, the state Legislature passed a bill mandating California to achieve carbon neutrality by 2045. The drive behind this green energy transition is climate change, according to the California Environmental Protection Agency.
However, Ms. Shelley said the impact of such an effort by the state is almost negligible on the global climate.
According to a 2022 California Air Resources Board report, the state emits around 370 million metric tons of greenhouse gases annually, accounting for less than 1 percent of global emissions.
“The whole state could shut down, and it would make no difference to the global climate,” she said.
And such goals create a heavy financial burden on the people, Ms. Shelley said.
Recent data from the U.S. Energy Information Administration indicate that between June 2022 and June 2023, Californians, on average, experienced an electricity rate hike of approximately 19 percent.
Ms. Shelley suggested that the rise in rates may be attributed, in part, to what is known as supply-demand disparity, which has been exacerbated by the increasing sales of electric vehicles and other electric equipment.
According to the California Energy Commission, in 2022, EVs constituted 20 percent of the state’s new vehicle sales, a nearly 200 percent increase compared to five years ago, and were 40 percent of EV sales nationwide.
But the escalating demand for electricity is also increasing the likelihood of brownouts and blackouts, she said, prompting the state to sometimes encourage residents to reduce usage.
“What they’re trying to do is force people to use electricity at a different time of day, when there’s more solar energy, which doesn’t help you when you come home from work, and you want to charge your car and run your electric appliances,” she said.
As a result, she said, the state is going to move toward what she called “demand response,” where residents will use less electricity due to pricing or rolling blackouts, when utility companies intentionally shutdown power over different parts of the state’s electric grid to avoid a total blackout when the demand for electricity exceeds capacity.
She additionally said relying heavily on solar energy is not realistic, given that peak demand often occurs when it is not available, after the sun goes down.
“It’s a fantasy. … We can only go to 100 percent renewable if it’s [always] summer and never night. And I don’t think we’re on that planet,” she said.
Currently, about 35 percent of electricity is generated by renewable sources, including solar and wind energy, according to the California Energy Commission.
Besides reducing electricity use, the state is also pushing to close its nuclear and gas-powered plants.
Since 2009, the number of gas-powered plants in California were reduced from 19 to three due to various reasons, and the last three were originally set to shut down in 2020, according to the California Energy Commission.
However, the commission approved two three-year extensions, with the latest one granted in August, citing the need for emergency preparedness.
Ms. Shelley criticized such last-minute extensions as also one of the reasons electricity rates are rising.
“By law in California, utilities have to sign 10-year contracts with solar and wind providers. … [But] they can’t sign a 10-year contract with the gas-fired electricity generating companies. So, there’s no long-term contract. You have to have long-term contracts in order to have stability—stability of supply, stability of price,” she said.
In March, federal regulators granted an exemption, at the request of Pacific Gas & Electric, allowing California’s final nuclear power facility, Diablo Canyon, to keep running amidst the state’s challenges with electricity shortages.
According to the California Energy Commission, the two remaining reactors at the plant—located in San Luis Obispo County on the Central Coast—generate approximately 9 percent of the state’s electricity.
Now, the first reactor is licensed to operate until November 2024, while the second is authorized until August 2025.
The cost for these extensions, Ms. Shelley said, will show up in Californian’s electric bills due to the absence of long-term contracts that offer price stability.
“We really should be realistic in what we’re doing, that’s hurting us, hurting our economy, hurting job creation, [and] hurting us in the cost of living,” she said.
What factors contribute to the increased costs of utilities such as electricity, water, and natural gas in California?
Cluding solar and wind, in California, according to the California Energy Commission. The state has a goal of reaching 100 percent clean energy by 2045.
While the push for renewable energy and the reduction of greenhouse gas emissions is commendable, the burden falls heavily on the residents who are faced with skyrocketing utility rates. In addition to the higher electricity rates, Californians also face rising costs for other utilities such as water and natural gas.
The increased rates can be attributed to several factors. One is the investment needed to upgrade and maintain the state’s aging infrastructure. Another factor is the reliance on renewable energy sources, which often require significant upfront costs for installation and maintenance. The costs are then passed on to the consumers.
Furthermore, the demand for electricity in California is rapidly increasing. The rise in electric vehicles and other electric equipment has contributed to the strain on the grid. While electric vehicles are touted as a solution to reducing emissions, they also place an additional burden on the already stretched electricity supply.
In an attempt to manage the demand, the state has implemented programs that encourage residents to reduce their electricity usage during peak times. However, this puts a burden on the residents who may need to charge their electric vehicles or use electricity for other essential purposes when it is most convenient for them.
The state’s heavy reliance on solar energy also poses challenges. Peak demand often occurs when solar energy is not available, which means that alternative energy sources must be used. This increases the cost of generating electricity and contributes to the overall rise in utility rates.
Ultimately, the burden of high utility rates falls on the residents who are struggling to make ends meet. The cost of living in California is already high, and the high utility rates only add to the financial strain. The state should consider implementing strategies that prioritize affordability and ensure that residents are not overly burdened by the cost of utilities.
While the goal of achieving carbon neutrality and transitioning to renewable energy is important, it should not come at the expense of the residents. The state should explore ways to reduce the financial burden on residents while still working towards its climate goals.
California’s high utility rates are a burden on its residents. As the state continues to prioritize renewable energy and reduce greenhouse gas emissions, it must also find ways to make utility costs more affordable for the people who call California home. Balancing the need for clean energy with the financial well-being of residents should be a top priority for policymakers.
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