- For the 12 months ended June 2020, California’s higher electricity prices translated into Residential ratepayers paying $6.2 billion more than the average ratepayers elsewhere in the US using the same amount of energy. Commercial & Industrial ratepayers paid $11.4 billion more.
- Using Department of Tax & Fee Administration taxable fuels data available through May 2020, Californians paid about $16.9 billion more over the year compared to the average gasoline price elsewhere in the US, and another $3.1 billion for diesel – that is $20 billion more for fuel.
Here's the Breakdown:
The monthly energy updates have been published for August 2020 fuel prices (data from GasBuddy.com) and electricity prices and natural gas prices for June 2020 (price data from the US Energy Information Agency). Unfortunately, the news continues to mirror what we have seen since the beginning of the pandemic and through the COVID-19 shutdown—California’s energy costs continue to be more expensive than the rest of the United States.
The latest data indicates that California energy prices continue to grow, both in absolute terms and compared to the averages for the other US States.
According to a report from the Center for Jobs and the Economy, “In a system defined by regulation and guided less by costs to households and employers, the latest data indicates the total bill continues to grow.”
The report additionally points out that the combined, administratively imposed energy taxes total at least an additional $44 billion a year above the average—more if consumption levels had been closer to the pre-COVID levels in April through June. The report also highlights, “In a normal year, this energy tax is more than what the state generates from the sales and use tax and just under half of what is raised through the personal income tax.” The report then identifies that ten years of regulations “…have failed to consider the full effect in particular on low income households and increasingly middle income ones as well.”
According to the latest report, the cumulative costs of these regulations now add up to $3,700 per household if assessed at the average cost of power in other states, and far more if compared against California’s ability to provide energy more cost effectively than other states in the past. This amount is equal to at least 5% of median household income for all Californians, 6% for Latinos, and 7% for African Americans, increasing the diversion of income solely for state regulatory costs.
What does $44 billion buy for you?
This $44 billion per year is not the price of a climate change program. According to the report, it is “the cost of the way California has chosen to administer its program.”
From the Report: “California’s climate program formally began in 2010 with the adoption of the AB 32 early action items. Just before that, however, emissions dropped sharply in the US and in the state during the economic contraction that began in 2008, especially as manufacturing declined and production moved to other states and countries in particular to China. The emissions in many cases were not eliminated; they instead moved to factories elsewhere and in China, to factories reliant on a grid that according to the International Energy Agency (IEA) was 68% coal and only 8% renewables in 2017. Compared to 2010 when the state’s formal program began, that $44 billion plus a year in costs has produced emissions reductions of only 5.4% through 2017. And much of this outcome was the result of favorable weather—in this case snow that allowed hydroelectric resources to replace one fifth of natural gas generation in 2016 compared to the average for 2014-15, a situation that increased in 2017 through 2019.”
California Residential Electricity Prices in June
- • California average residential price for the 12 months ended June 2020 was 19.61 cents/kWh, 55.1% higher than the US average of 12.64 cents/kWh for all states other than California. California’s residential prices remained the 7th highest in the nation.
- • For the 12 months ended June 2020, the average annual residential electricity bill in California was $1,266, or 27.4% higher ($272) than the comparable bill in 2010 (the year the AB 32 implementation began with the Early Action items). In this same period, the average US (less CA) electricity bill for all the other states grew only 2.2% ($30).
Note: Residential bills, however, vary widely by region, with the estimated annual household usage in 2018 as much as 59% higher in the interior regions compared to the milder climate coastal areas.
California Commercial and Industrial Electricity Prices in June
- • California average commercial price for the 12 months ended June 2020 was 17.25 cents/kWh, 71.6% higher than the US average of 10.05 cents/kWh for all states other than California. California’s commercial prices remained the 3rd highest in the nation.
- • California average industrial price for the 12 months ended June 2020 was 13.93 cents/kWh, 119.0% higher than the US average of 6.36 cents/kWh for all states other than California. California’s industrial prices remained the 5th highest in the nation.
California Natural Gas Prices in June
Average prices ($ per thousand cubic feet) for the 12 months ended June 2020 and changes from the previous 12-month period for each end user: