California residents not only face the highest gasoline prices on the continental United States, with each gallon being about $1.3 higher than the national average; in terms of electricity prices, California also tops the mainland with a rate of 34.31 cents per kilowatt-hour (kWh). People in surrounding states like Oregon, Nevada, Arizona, and Utah only pay 15.03, 13.04, 12.27, and 11.01 cents per kilowatt-hour for electricity, respectively.
According to online statistics from statista.com, Hawaii has the highest electricity prices outside the continental US at 44.14 cents per kilowatt-hour, followed by California at 34.31 cents and Maine at 28.7 cents. Eight states including Maine have electricity prices above 20 cents per kilowatt-hour, while the rest of the 40 states and Washington D.C. have prices below 20 cents.
California’s “deep blue” state legislature has set ambitious clean energy goals and strategies leading the nation, requiring zero-emission electric cars, trucks, and trains. The plan aims to sell 100% zero-emission vehicles by 2035 and transition to using entirely renewable energy sources. In September 2022, Governor Newsom signed the Clean Energy, Jobs, and Affordability Act, mandating that 90% of California’s energy consumption come from zero-carbon sources by 2035, reaching 100% clean energy (renewable energy) by 2045.
Since the establishment of these goals, California’s performance has been mixed. In April of this year, California achieved 100% green energy supply for the first time, with 30 out of 38 days maintaining renewable energy supply for 15 minutes to 6 hours, thanks to solar and wind energy. The Mojave Desert in Kern County has been transformed into the world’s largest renewable energy center.
According to the US Energy Information Administration, natural gas accounted for 39% of California’s in-state electricity generation in 2023, while renewable energy made up 54%; the rest was from nuclear power. Renewable energy includes solar, wind, geothermal, hydroelectric power, ocean energy, and bioenergy, which typically require significant upfront investment for infrastructure construction. Achieving the goal of selling 100% zero-emission electric vehicles by 2035 not only involves challenges in charging infrastructure but also requires a substantial increase in power supply.
Apart from relying on natural conditions, renewable energy also faces issues with electricity costs. California residents have the second-highest electricity cost in the US, following Hawaii, and commercial electricity prices (average 23.79 cents) are also significantly higher than in other continental US states, averaging 10.77 cents per kilowatt-hour.
Politico reports that California’s electricity prices have risen by 127% over the past decade, with climate spending including the costs of renewable energy, wildfire risk control, and improving transmission capacity being deemed partially responsible for this increase. “High costs” have been a persistent challenge in California’s green revolution. Matt Baker, Director of the Public Advocates Office at the California Public Utilities Commission, acknowledges that “high electricity prices could threaten the energy transition,” emphasizing the importance of maintaining public support for energy transition through cost-effective means.
Phillippe Phanivong from the Energy and Resources Group at UC Berkeley points out that California is facing challenges from aging power infrastructure, increasing demand, and natural disasters brought about by climate change, making the carbon emission reduction goals increasingly complex.
In tackling California’s ever-changing and sometimes harsh climate, Climate Central, a non-profit research organization, reports that nearly 61% of major power outages in California between 2000 and 2023 were caused by “extreme weather,” defined as affecting at least fifty thousand homes or businesses. A study published in the journal Science Advances shows that compared to 20 years ago, California’s wildfires have increased fourfold in size, tripled in frequency, and expanded in scope.
Reports submitted to the state legislature indicate that between 2019 and 2023, the California Public Utilities Commission (CPUC) approved $27 billion in wildfire prevention and insurance costs to be collected from taxpayers. The rate of growth of this figure is expected to exceed the inflation rate by 2027.
A 2022 report from the California Solar Storage Association reveals that installing solar power in California costs thousands of dollars more compared to Europe, with approval costs even surpassing the cost of solar panel batteries, approximately double the installation cost in Europe. Some experts have called for reducing red tape, as strict state laws may hinder people from meeting the state’s energy goals, such as installing solar panels on rooftops. Environmental activists in California highlight the cumbersome approval processes, permit applications, and slow public grid connections.
In late October of this year, Governor Newsom issued an executive order to encourage electricity bill reductions to uphold the commitment to achieve 100% clean power by 2045. Millions of Californians received an average of $71 in electricity bill reductions in their October bills from the state’s climate credit.
Earlier this year, CPUC approved a new billing structure to lower residential electricity prices. Despite these efforts, Californians are still finding it challenging to expect a decrease in electricity prices that are comparable to those in neighboring states.