California’s electricity prices are approximately double the national average and are likely to continue to rise. A former state energy commissioner recently detailed the various factors contributing to this trend.
According to data from the California Public Policy Institute, Californians have been paying electricity bills about 10% higher than the national average since the late 1980s. However, with the recent surge in energy prices, Californians were paying about 33% higher than the national average in 2015, which has soared to as much as 80% by 2024.
With utilities facing critical damage to their power grid infrastructure after major wildfires, California’s electricity costs are expected to continue to rise.
Former California Energy Commissioner Jim Boyd revealed in a recent interview with the Epoch Media’s “California Insider” host Siyamak Khorrami that the state’s current average electricity price is about 96% higher than in other regions of the U.S.
Boyd noted that the state’s largest utility, Pacific Gas & Electric Company (PG&E), serving Northern and Central California, has increased its average rates by about 104% over the past decade.
Frequent wildfires in California, resulting in destruction, often lead to a significant increase in electricity costs for residents, Boyd explained. Utility facilities are burnt in wildfires, and the cost of rebuilding is very high, which ultimately gets passed on to consumers.
Boyd also pointed out that many wildfires are actually caused by utility company equipment due to their proximity to trees and aging power lines that are prone to damage.
Data from the California Department of Forestry and Fire Protection (CalFire) shows that as of January 26, 62 wildfires have already occurred in the state this year. The agency reported that between 2020 and 2024, California experienced an average of 7,713 wildfires annually.
The two most destructive wildfires in California’s history occurred in January 2025, when the Palisades Fire and Eaton Fire destroyed 16,246 buildings in Southern California, including numerous power transmission lines, substations, and other infrastructure requiring reconstruction.
The deadliest wildfire in California still remains the Camp Fire in November 2018, which was sparked by PG&E’s power lines and completely devastated the town of Paradise in Butte County, resulting in 85 fatalities.
In December 2019, the company agreed to pay $13.5 billion in settlements for its role in the Camp Fire and several other Northern California wildfires.
The California Public Utilities Commission (CPUC) stated that costs approved for wildfire risk mitigation, disaster preparedness measures, and related responsibilities accounted for 27% of PG&E’s total revenue in 2024 and 17% for Southern California Edison (SCE) and San Diego Gas & Electric Company (SDG&E).
CPUC further noted that residential customers in the state pay an average of $250 to $490 more per year due to these costs.
Boyd pointed out that the second key factor contributing to California’s high energy rates is the state’s strict limits on greenhouse gas emissions and other clean energy goals.
In September 2018, California’s 100 Percent Clean Energy Act was signed into law, requiring all electricity in the state to come from carbon-free sources, mainly solar and wind energy, by 2045.
Boyd believes that the law should have placed more emphasis on bioenergy as a renewable power source. Bioenergy utilizes wood waste for power generation, which is abundant in California as an agricultural state.
He mentioned that since the 1970s, California has explored various renewable energy sources including wind, solar, and bioenergy.
“Bioenergy was the only renewable energy source that really worked back then,” Boyd said. “My initial concern with solar and wind energy was their intermittency.”
He also highlighted that the number of bioenergy power plants in California has decreased from about 60 in the 1980s to about 20-30 currently.
Boyd mentioned other factors contributing to high electricity rates in California, such as high natural gas prices and utilities implementing time-of-use pricing (charging higher rates for higher electricity usage during peak hours) and tiered pricing (higher rates for higher electricity consumption).
He predicted that California’s electricity prices are unlikely to stabilize in the near term. He expressed doubts about whether switching from usage-based billing to fixed electricity fees could lower prices as other issues remain unresolved.
The CPUC approved a new billing structure in May 2024 as required by the state legislature, aiming to lower residential electricity costs and encourage residents to switch to electric appliances and vehicles. The measure was originally planned to be implemented by the end of 2025 or early 2026.
Under the new structure, California households will pay a fixed fee of $24.14 per month regardless of their electricity usage, with some low-income households eligible for discounted fixed fees of $6 or $12 per month.