Why Californians have sky-high electricity bills | Hacker News Reader

Why Californians have sky-high electricity bills

oilprice.com

37 pointsolivermarks66 comments

first, the size and geography of the state make the fixed costs associated with the maintenance of its grid higher than in most other states

More specifically, PGE raises rates to pay for line maintenance but instead steals the money[1], goes into bankruptcy, raises rates again to pay for line maintenance and will likely simply steal the money despite all this.

Even more specifically, after bankruptcy, PG&E has dealt with possible line problems by cutting down a bunch of (historic) trees in my town, Nevada City, They're cutting (a few) trees around their lines as symbolic bandaid, as opposed effective, sustainable methods like installing the equivalent of GFI circuits or putting lines underground (note, Nevada City had actually previous paid to put ours lines underground, but "due to bankruptcy" PGE couldn't do that). And so when these new efforts fail, we'll have another increase in rates to "finally pay for it". And the fire situation need to be barely mentioned - poor forestry or global warming? Of course it's both and of course PG&E bears some responsibility for both.

Judge: PG&E Paid Out Stock Dividends Instead of Trimming Trees

[1] https://www.kqed.org/news/11737336/judge-pge-paid-out-stock-...

Classic case of regulatory capture: https://theintercept.com/2019/11/04/pge-bailout-bankruptcy-l...

Sounds like it should be nationalized imo

> Sounds like it should be nationalized imo

There was a major effort by a coalition of local governments in the PGE service area along with community orgs and others to have a public takeover in the most recent bankruptcy rather than another private transition to continue thr cycle of bad behavior, massive liability escaped by bankruptcy, and further bad behavior which is PG&E’s history, as well as bids by individual public entities for parts of PG&E’s operations. Some of the latter mat have succeeded but the former failed, and so the cycle will continue.

Already basically has been, CPUC sets PG&E's rates, profits, and infrastructure investment.

I'm all for that.

I don't know how public management could do a worse job than PG&E.

Off topic, but I would like to see California get tough on all Insurance companies though. We have a full time Insurace Commissioner.

Like basically, "Don't get cute on rates. If you don't stop getting cute, we will take away some of your cake--like go back to requiring car insurance, but not demanding it at DMV. Stop colluding--even though you deny it. Stop sending millions to our politicians." (Sacramento is very much influenced by Insurance industry Lobbiests. I don't have a citation at hand though.)

Actually, I wouldn't mind seeing all insurance sold in CA sold by a public nonprofit entity. I believe CA is big enough, and wealthy enough, to self insure its citizens.

"I don't know how public management could do a worse job than PG&E."

Don't tempt fate.

I think you mean state-run, right? Nationalized would mean managed by Congress, which is unlikely to be an improvement.

There's a middle ground. https://www.smud.org/ is a good example of a well-run public utility in California.

CPUC (California Public Utilities Commission) sets what profits PG&E makes. Any lack of money spent on maintenance and wildfire prevention necessarily goes into ratepayers pockets in the form of lower electricity rates, and the Office of Ratepayer Avocates in CPUC ensures this remains the case. PG&E is extremely regulated - anything characterized by "stealing the money" or "paying out dividends instead of doing maintenance" is elected and/or appointed officials scapegoating PG&E for complying with their regulatory decisions.

PG&E is a public company listed on the NYSE. It’s absurd to claim that any money they save results in lower prices. They are free to return saved money to shareholders as a dividend, and indeed they have done so in lieu of necessary maintenance. Meanwhile their prices just go up and up.

The CPUC absolutely does not control what profit PG&E makes but they do have to approve any rate increases, which due to regulatory capture, they naturally do. The brokenness of this system is as obvious as the brokenness of its outcomes.

At least oilprice.com wears its bias on it's sleeve. The calmatters article is pretty light on actual analysis too. Here is the actual report from the California Public Utilities Commission that both these articles are based on:

https://www.cpuc.ca.gov/uploadedFiles/CPUC_Website/Content/U...

It projects an increase in electricity rates slightly hither than inflation over then next 10 years.

Pretty sure CPUC is ALSO an extremely biased source? Besides the regulatory capture issues, they are the ones being told to oversee implementation. They have every interest in giving a 'all clear, it will be fine' while they squeeze everyone else. They have a long history of doing so here in California.

One thing is for sure - ACTUAL energy pricing (here in PG&E land) that I see on my bill is much higher than what CPUC or PG&E actually advertise is the rate here, mostly because of energy usage penalties. We are not that unusual in our usage, and frankly using way less energy than a typical american household. Apparently, they found one of those 'cooks every meal on a single service rice cooker, actually turns off every light when they're not using it, and wears sweaters all year round inside' as the norm/baseline and then charging everyone else massive penalties if they don't conform, while pretending energy is cheap.

Wanted to double check myself and make sure I wasn't just imaging it. I am not.

According to the US Energy Information Administration, the average American Household uses 10600 kWh/Yr or 877 kWh/month (I'm just going to use kWh here for simplicity). It varies by state, with Louisiana at 14747 kWh/yr and Hawaii at 6296 kWh/yr. [https://www.eia.gov/tools/faqs/faq.php?id=97&t=3]

Despite work from home, despite being a large family, etc. we used 599 kWh last month. That puts us at only 68% of the national average household (and we're probably more people and more stuff going on than an actual average household). We have LED lights, we turn things off when we don't need them, don't run AC much or at all, etc. But we also aren't killing ourselves too much. Our price per kWh came out to $.26/kWH, or twice the national average.

The CPUC would rather the utilities talk about their rates and what they're doing to keep them down [https://www.cpuc.ca.gov/electricrates/] (conflict of interest anyone?), so we'll see what PG&E says in their report at the CPUC website [https://www.cpuc.ca.gov/General.aspx?id=6442467709]

Oh, that's interesting. It literally has no data on current rates! Huh? It just talks about cost shifting and trying to cut costs, but with no actual details or contextual data (there are some graphs regarding cost shifting, but without context, per capita/per household it's useless).

For context here, this site seems to do decent nationwide price of electricity comparisons [https://www.electricchoice.com/electricity-prices-by-state/].

According to them, average price per kWh is $.13 nationwide, and $.19 in California.

So, what is the actual rate for PG&E and how has it changed? So first, you need to know what Baseline means. Baseline is defined per statute as 50-70% of the usage of the average household within a number of different climate zones and varies by zone. It's supposed to be for 'you can survive' usage only, it isn't set at average usage even though it sounds like it should be.

After a ton of digging, I find the new rates as of March 1st [https://www.pge.com/pge_global/common/pdfs/rate-plans/how-ra...], where up to baseline usage is going to be charged at $.26/kWh (or double national average), anything above baseline up to 4x baseline (so double average usage) would be charged at $.33/kWh, and and any usage higher than that at $.41/kWh. That comparison site above says average California electricity costs $.19/kWh, but as you can see your average PG&E customer is going to be paying well above that in all cases - somewhere between 1.2-2x that depending on usage. If you actually use more than average (say 4x the average), you might even be paying 3x the national average for it. If you use even more than that? Well, hope you're wealthy.

These are progressive charges, so your baseline usage is charged at the lower rate, then increases as you go.

So let's see how this has changed over time shall we? As required by law, PG&E keeps a bunch of excel spreadsheets (yes really) with their historic rates.

https://www.pge.com/tariffs/electric.shtml#RESELEC_INCLUTOU

If we go back 5 years to May 2016 rates [https://www.pge.com/tariffs/Res_160324-160531.xls] the E1 (normal residential) baseline was $.18/kWh, next tier up was $.22/kWh with the 'average' customer paying $.21/kWh.

Compared to the now effective price of $.26/kWh for baseline and next tier $.33/kWh, that is an increase of 44% over 5 years for baseline and 50% for Tier 1 over the same time.

Thank you @lazide, great sleuth work

So, as a resident of Texas, I'm certainly willing to admit that our power generation system had a rocky winter. But, typically, it delivers low-cost energy. We have a lot of solar, a lot of wind, and most of the fossil fuel generation is now natural gas. Tesla is building here, and there are more electric cars and solar panels on roofs all the time. If this article's assertions about the basics of California's problems were fundamentally true, Texas should be right behind with rising power costs. Instead, they are roughly half as much.

Another Texan here.. yes, we're #1 for wind and I think #2 for solar so obviously we blow up their assertions here.

My only theory is that we have a strong backstop of natural gas that serves as the foundation which we can (usually) fall back on. If California is working to go wholly renewables without having a fossil fuel-based Plan B, then they're starting with different design constraints and would likely have a different result.

If that is the case, it would make for a much more convincing article and "not only renewables" is a more interesting discussion.

Capacity is a fixed cost. Society expects five nines, so we build the grid to meet the peak hour of the peak year out of ten years. But the cost to meet that peak is amortized over all of the electricity. And because the per capita use in California is lower than most other states, the fixed cost is amortized across fewer hours. Rooftop solar decreases total retail usage. Afternoon air conditioning increases the peak. Both contribute to increasing retail rates. Importantly, wholesale rates (where the market is deregulated) have not seen the same increase that retail rates have seen.

Except we don’t get anywhere near 5 9’s in much of California, there are rolling blackouts in Oakland when the wind blows too hard because of the risk of wildfires. It’s just mismanaged and under invested because regulators let them and the market rewards them for it.

Also wind turbines have to be turned off when the wind blows harder than their max rated capacity.

I would like to see some system were you pay for the number of 'nines' of reliability you want.

At my house, I'd be happy with just 2 nines. Maybe the same for street lighting or sewerage treatment.

For that, I would like to not pay for the peak capacity doubly-redundant inspected monthly power lines. Let those who actually want reliability pay.

I propose that the electric company provide meters which can have selectable 'reliability', and merely shut off lower service tiers like me whenever a line is down or generation reaches capacity. For a property that already has a GFCI/RCD, a $6 mesh LoRA board and a 1 cent resistor is sufficient for the energy company to switch off the GFCI.

Given 2 9s, you’d be okay with 87 hours of no electricity? Also, assuming this outage would probably come at a peak tome when AC or heat demand is high so you’d be either without heat or AC for 3 & 1/2 days? That’s how many texans died this past year.

Edit: you also mention sewage. I personally would not be happy with no sewage for 3.5 days in a row

Except it's more likely to come in the form of 3 hours from 1pm to 4pm every hot weekday all summer...

Sewage treatment systems typically have a few days spare capacity.

> Society expects five nines

Since each increase in uptime costs so much, requires peaker plants, and makes intermittent renewables harder, I experimented with living more resiliently. After all, the reverse works too: each decrease in uptime saves huge costs, relaxes needs for peaker plants, and makes intermittent renewables more feasible.

Most of the world can handle some downtime. Electric power didn't exist for most of human existence. We've become more needy, dependent, and entitled. I suspected that living more resiliently would improve my life.

It did. My last three electric bills were $1.40, $1.70, and $1.70 (plus tax and fixed connection costs). That's living in Greenwich Village, Manhattan. I wrote up some of my experience here, with scans of my bills: https://joshuaspodek.com/i-used-2-5-the-average-americans-el....

I don't expect many people to reach this level of resilience and stewardship, but we don't have to to decrease our insane entitlement to such uptime. A few cultural changes and we could lower our grid costs tremendously while improving our quality of life.

Because they aren't: https://www.eia.gov/electricity/state/

California electricity prices are indeed sort of an outlier in the mountain west, because the area is very rich in cheap hydro yet CA has much less of it per capita. Nationally, they're right about the same level as you see in the urban northeast, and obviously much cheaper than limited markets like AK and HI.

In fact, if you look at that chart it looks very much like a chart of state per-capita GDP. Seems like electricity spending tends to track the overall economy, which isn't surprising.

Also, just for scale: at the $.17/kWh price listed, that means Californians need to pay a whopping $12.75 to fill up their 75 kWh Tesla batteries.

Which isn’t bad, but here in Ohio we pay $.04/kWh so to “fill up” our Tesla (standard range) it’s about $2.65 :)

How much is it to fill up my used Nissan Leaf that I bought for $5500? :-)

Well you’d have to look up your kWh rate from your electric bill then look up the total storage capacity of the battery, then you’d multiply and get the number.

Making numbers up here but if your battery is 100 kWh and your rate is .05 per kWh then you’d pay 100 x $.05 to charge your car which is $5.00 in this case.

California has high electricity rates, but at least in the San Francisco area you don't use very much heating or air conditioning, so you just don't need that much electricity. Winter in Pittsburgh or summer in Arizona is going to cost you a lot more in electricity bills than spending that time in Northern California.

Also, the insanely high rent gives people something else to worry about more than the cost of electricity.

Do not forget the Central Valley is also part of California.. the beach bros forget about the really hot and poor part of California suffers from high energy coasts. California is not just the Beach Bros in Malibu and Sausalito.

The majority of the population of CA lives in the coastal cities - so a pejorative like "beach bro" is super unnecessary and condescending for no reason.

Nevertheless there are real issues with regressive policies in energy pricing and high costs of electricity in California. Countering with "well, in the Bay area you don't need a lot of electricity" doesn't contribute a lot of value to a discussion of why Californians pay significantly higher rates than those in other states. It's also not very relevant if you expect a sizeable fraction of the state to switch to electric cars in the next few decades.

My family is from the Chino, Pomona, Ontario area, just south of LA. Lets just say a lot of people live there and it get hot as all get out there. You don't have to travel far from the coast for temperatures to rise pretty quickly and AC to be a necessary thing.

> The majority of the population of CA lives in the coastal cities

No, and most certainly not the mild-climate coastal cities with low HVAC costs.

I mean, 1/2 the population lives in the Central Valley plus LA Basin, which don’t fit that because of AC, add in the mountains (heating) and deeper inland southern California (AC, again), and you have a clear majority to which the description doesn’t apply.

Not conducive to a conversation, perhaps. But there are indeed reasons behind the resentment, which manifests in the pejoratives - inland California is chafing under policies foisted upon them by the coast.

You wouldn't tell them to be silent just because they're a political minority, no?

Considering this is a forum centered around the Bay Area, most of the posters here at best would like to forget that the Central Valley exists.

The spillover of policies that actively externalize problems to the underrepresented parts of the state are bad enough (AB109 comes to mind), the last thing we need are smug misguided attempts to save us.

I haven't heard anyone among friends or family complain or say much of anything about electricity bills in quite some time, which makes me suspect the 'Sky-High" description.

Without looking into any details, my electric bill is 30% higher now than 2 years ago.

Considering most folks have been working from home the past year Id think most bills would be at least 30% higher for the last 14 months or so.

Why? The things you'd use for work, like monitors and computers aren't using a lot of energy - comparatively to fridges, electric ovens and washing machines.

But you also aren't putting your airconditioner / heater into "away" mode since you are home all day.

I've been working the entire time and my kids go to private school that is open.

I looked at my bills. What changed is the city/clean power alliance (CPA) now provides my power, they claim to provide 100% clean power to my home. I now pay a generation charge and some other fees to the CPA. There are options to have 40%, 50%, or 100% clean power with 100% being the default. According to the CPA calculator, the difference in cost between 40% and 100% clean power is less than 10% of the bill - either way you still pay more now. Not complaining about having clean power.

Same. I know mine has never been particularly notable, except the one month immediately after moving into this apartment where we experimented with running the AC literally 24/7 (not recommended).

PG&E electricity bills average about 50% more than national average. On the other hand California houses also cost 50% more than houses in other states, so it's possible you don't notice it as a fraction of adjusted income. That's sort of the article's point, that the burden of these high prices falls more noticeably on the poorer people of the state.

I live in an apartment in a San Diego suburb, well outside of the trendy spaces. Our electricity bill is typically in the $80-100 range. That would suggest a delta from other states of perhaps $50, if I allow for some generous fuzz factors. Right now, our incomes are from Walmart and Domino's Pizza, and even in those circumstances, $50 is nearly a trivial cost.

I won't try to speak for McMansion dwellers and their bills.

For a medium sized house in Michigan (with no AC), my largest bills run ~$45 (that's the blower and pumps for the furnace, with a humidifier running quite a bit).

Part of the reason might be the low usage of electricity in California, especially as a percentage of income. I think it's number 48 or so of the states.

Perhaps low (by comparison) use of A/C? still high use of natgas heating?

Between electric cars and the ongoing push to make natural gas verboten, perhaps this will change.

Probably because it is inconsequential even if expensive, especially for the upper middle class. I currently pay about ~$50 per month for electricity in Seattle. Even if you tripled that cost in California, I probably wouldn't notice despite being "expensive".

Household goods use significantly less electricity than they used to, which also helps.

It's death by a thousand cuts/frog boiling most likely. If they knew what other states were paying, they might complain. As-is, everyone is paying too much, and it's increasing gradually. Compared to Rents in California over the last 10 years though - still increasing slowly I guess?

Net metering makes sense but people should be paid spot wholesale price for their electricity not the retail price.

That wouldn't be net metering.

(it's tracking different things coming in and going out)

As more and more people convert to solar, PG&E will make less money, and consequently charge more for electricity in order to pay for their costs.

The next house I buy, I intend to fully move to solar and battery backup. Maybe rely only on late night charging for my non-Tesla EV.

I'm interested in if you have thoughts on how to do that in a cost-effective manner. Any links you suggest I read?

In particular, I was under the impression solar had been made more expensive by Trump's tariffs. Not sure if that's even right. And, I'm not aware of any battery backup systems that are economical and not made by Tesla (not a fan of Tesla -- personal opinion, and not something I'm wanting to discuss as it's not really the topic here).

Basically the Trump tariffs did increase the cost of importing Chinese solar panels, but US solar panel manufacturers didn't really reap much benefit because

(a) solar panel installs slumped as a result of (relatively) higher panel costs

(b) steel and aluminum tariffs raised the material costs for US solar panel manufacturers and

(c) the section 201 tariffs phased out over 2-5 years, so even if you did stand up a new factory in two years you're going to be only reaping the tail-end of the tariffs.

The article indicates we went from 5 US crystalline silicon photovoltaic solar panel manufacturers in 2016 to 2 in 2020.

"The tariffs that the Trump administration imposed on imported solar cells and modules in 2018 proved sufficient to boost some U.S. module manufacturing, according to a review by the U.S. International Trade Commission released late last week, but the duties did not have the same effect on U.S.-produced solar cells."

"An analysis from the Solar Energy Industries Association found that the U.S. forfeited 62,000 jobs, $19 billion in investment, and the environmental benefits that would have come from additional solar deployments"

https://www.greentechmedia.com/articles/read/solar-tariffs-p...

No facts, no numbers, just opinions and vague insinuations. I’d like to see a real breakdown.

In my home state of Maine our power grid is owned by a Spanish conglomerate which seems to be engaging in cost cutting and price gouging. We’re trying to convert it to a consumer owned utility; we’ll see if that helps.

Humans might not like the idea that the price of energy has been artificially low for a long time since we didn’t cost-in pollution capture.

If the true price of energy is higher than what we’ve achieved by burning fuel, what then?

The price of energy is low using nuclear power.

Energy will continue to get cheaper. We've only fairly recently industrialized the production of capture and storage devices.

> However, this would require a large upfront investment, which would be impossible to shoulder by medium- and lower-income households.

There’s actually massive subsidies right now for lower income households in CA to install an EV charging system, amongst other green deals. Even for those at a higher price range, you can still get 1k back on your taxes for an EV charger install. The article failed to mention this…

The article could stand to have more real numbers, although I don't doubt that the folks who have grid-tied solar are doing it on the backs of everyone else.

It's not dissimilar to some of the EV subsidies (or mortgage interest for that matter). By tying them to taxes, you have produced a more regressive system.

So we should burn more fossil fuel? No thanks. Visit Bakersfield sometime.

https://www.lung.org/research/sota/city-rankings/states/cali...

Much of that is agricultural pollution as well as geographic factors (mountains on 3 sides and minimal precipitation much of the year)

Are you saying that the pollution is natural? Or that we should not strive to improve the situation?

I don't know - why do Californians have sky-high everything?

The disparities are certainly a big concern to be rectified, but the overall cost analysis -- as usual -- neglects the unpriced externalities of carbon emission on the state. Obviously that's a bigger problem than the state itself can solve, but all cost analyses will look bad if you don't include the cost of what's broadly happening to California's climate due to past and ongoing carbon emission.

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