California’s electricity prices are surging, burdening residents with bills that in some cases exceed the rent they pay for their homes or businesses, The Wall Street Journal reported Monday.
Prices have increased thanks in large part to the state’s push to make infrastructure upgrades like burying power lines, as well as demand increases driven by electric vehicle (EV) adoption and the proliferation of power-hungry data centers needed to sustain the growing artificial intelligence (AI) sector, according to the WSJ. These costs — as well as the capital costs of new wind and solar farms that policymakers want to replace fossil fuel generation for a green grid — are being passed on to California’s consumers, leaving ordinary people on the hook for huge electricity bills.
Californians owed a combined $2.1 billion in late utility bills at the end of 2023, representing a more than four-fold increase since 2019, according to the WSJ. Approximately 27% of all California residents have missed payments on utility bills at some point over the last 12 months, and power was shut off for more than 200,000 people in the state in 2023 for not paying bills, with about 20% of those people not getting their power turned back on.
“During the summertime [power] is the only thing on my mind,” Scott Jones, a resident of Borrego Springs, California, told the WSJ. Like others in his mobile home community, Jones tries to save where he can on groceries, works multiple jobs and even uses an array of shades and tints to try to keep the temperature lower in his home to avoid having to use the air conditioner.
“I’ll be here in the dark,” Jones’s wife, Leyla Nunez, told the WSJ. “I’ll send my son over to my mom’s or something like that to try to just keep the costs down,” she continued, adding that the electricity bill is “like a whole ’nother rent.”
As of May 2024, residential electricity in California costs more than it does in every other state except for Hawaii, according to the U.S. Energy Information Administration (EIA). California’s residential prices in May 2024 were nearly five cents per unit higher than they were in May 2023, representing a year-over-year increase of about 15%.
“Responding to the impacts of climate change, including wildfire mitigation measures, grid upgrades, net energy metering (NEM) program costs, general inflationary and supply chain pressures, and other factors have all added to rates,” a spokesperson for the California Public Utilities Commission (CPUC), the state’s utility regulator, told the Daily Caller News Foundation. “Additionally, the state’s transition to a decarbonized economy will require significant upgrades to the capacity of the distribution system to accommodate the anticipated load from electric vehicles, electric heat pumps, and other electric appliances, but these technologies, in addition to reducing greenhouse gases, will also reduce rates over the longer term as costs to serve and support all customers are shared among more units of electricity.”
Democratic California Gov. Gavin Newsom’s office referred the DCNF to EIA data from 2022 showing that California’s average monthly electricity bills were only $3 above the national average, as well as an analysis from The New York Times and WalletHub from July that found California’s average monthly cost for electricity, heating oil, natural gas and motor fuel was lower than that of all but nine states.
Jessica Simpson Nehrer, another Borrego Springs resident, told the WSJ that her $1,873 June electricity bill for 2024 was almost double what she paid in 2022, and well in excess of the $1,200 monthly rent she pays for her home. Rodger Gucwa, the owner of a grocery store in Borrego Springs, has tried to save money by adjusting the thermostat to 85 degrees, but doing so melts the chocolate bars he sells.
“You can smash your head and, you know, try to solve the problem or whatever, and it’s not going to be solved,” Gucwa told the WSJ. The typical electricity bill for Gucwa’s store over the past year has been about $8,000, a figure not far removed from the $9,500 rent he pays for his shop.
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