The monthly energy updates have been published for November 2020 fuel prices (data from GasBuddy.com) and electricity prices and natural gas prices for September 2020 (price data from the US Energy Information Agency), and the news continues to be bad.  

As the Legislature returned to Sacramento for a single day this month to swear in the next Legislative Session, Governor Gavin Newsom reached the mid-point of his first term.  Having declared the latest round of business closures related to a surging COVID-19 caseload and staring at an economic downturn due to the same matter, thousands of small businesses are on the verge of permanent closures and large companies are announcing their departures from California.  

Many critics are suggesting that how Newsom manages the latest COVID-19 surge could define his political future, while others are already writing his political eulogy.  The fact that California was faring far better than the rest of the U.S. put Newsom on the world stage in a positive light.  Nine months in and facing new shutdowns, Californians are suffering from pandemic fatigue and are less compliant with public health measures, particularly as Newsom’s very public trip to a five-star restaurant earlier in the month continues to remind the public of a leader who calls on the people to “do as he says – not as he does.”

Worse, Newsom’s health officials warned that the current shutdown will likely last through Christmas – at least.  While Newsom desperately needs to look like a leader, the public is likely looking at him more as Dr. Seuss’ Grinch in “How the Grinch Stole Christmas!”  

But the bad news isn’t quite over yet. The UCLA Anderson Forecast said this month that California’s weak economy will take longer than the rest of the nation to recover due to strict business lockdowns imposed by state and local government agencies.  In addition to the business lockdowns, the heavy-handed regulatory business climate has also dealt some uglier blows, as California native companies like Oracle announced they are moving to Texas, joining Charles Schwab, McKesson and Hewlett Packard Enterprises and other businesses who have already announced their moves.  Media darling Tesla CEO Elon Musk also said this week he has personally moved to Texas from California and has moved his foundation’s HQ there as well, though Tesla remains headquartered in Palo Alto. Musk’s vocal views about anti-business policies included that Californians are moving to Texas because it is a state known for a fast-growth economy, and pro-business policies. 

The coming months will be tough for everyone in California, but especially for Newsom’s political future.

As Energy In Focus continues to review these figures and numerous third party reports, compounding figures continue to point to a growing cost of energy for all Californians – and those costs become just one of the many reasons companies like those mentioned above are deciding to move out. 

Unfortunately, for lower wage earners, the option to pull up stakes and leave are not as realistic, so they are burdened disproportionately by these rising costs.  

As reflected in the following figures, cost impacts continue to rise relative to the rest of the nation and these growing costs continue to impose a disparate burden to the lower wage households who have seen the highest loss of jobs as a result of the COVID-19 state-ordered closures. 

The most recent energy costs data shows a sustained rise in California energy prices compared to the rest of the nation.  California’s residential electricity prices place the Golden State at 6th highest, industrial prices at 4th highest, and commercial prices remained at the 3rd highest in the nation.

Following are the current energy costs in California, which continue to move in the wrong direction – for all consumers:

California Prices for Gasoline (2nd Highest in the US) and Diesel (2nd Highest in the US) in November

  1. •  The November average price per gallon of regular gasoline in California decreased 2 cents from October to $3.18.  The California premium above the average for the U.S. other than California ($2.05) rose to $1.14, a 55.5% difference.
  2. •  In November, California had the 2nd highest gasoline price among the states and DC, behind only Hawaii.  Californians paid $1.41 per gallon more than consumers in Missouri, the state with the lowest price.
  3. •  The November average price per gallon of diesel in California jumped 1 cent from October to $3.35.  The California premium above the average for the U.S. other than California ($2.33) fell 1 cent to $1.02, a 43.6% difference.

In November, California had the 2nd highest diesel price among the states and DC, behind only Hawaii.

California Residential Electricity Prices in September – 6th Highest in the US

  1. •  California average Residential Price for the 12 months ended September 2020 was 19.80 cents/kWh, 56.5% higher than the US average of 12.65 cents/kWh for all states other than California. California’s residential prices remained the 6th highest in the nation.
  2. •  For the 12 months ended September 2020, the average annual Residential electricity bill in California was $1,318, or 32.6% higher ($324) than the comparable bill in 2010 (the year the AB 32 implementation began with the Early Action items).  In this same period, the average U.S. (less CA) electricity bill for all the other states grew only 3.2% ($43).
  3. •  Note:  Residential bills 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.

For the 12 months ended September 2020, California’s higher electricity prices translated into Residential ratepayers paying $6.6 billion more than the average ratepayers elsewhere in the US using the same amount of energy.

California Commercial (3rd Highest in the US) and Industrial Electricity Prices (4th Highest in the US) in September

  1. •  California average Commercial Price for the 12 months ended September 2020 was 17.47 cents/kWh, 74.4% higher than the U.S. average of 10.02 cents/kWh for all states other than California. California’s commercial prices remained the 3rd highest in the nation.  Only Alaska and Hawaii had higher commercial prices.
  2. •  California average Industrial Price for the 12 months ended September 2020 was 14.25 cents/kWh, 126.6% higher than the U.S. average of 6.29 cents/kWh for all states other than California. California’s industrial prices remained the 4th highest in the nation.

For the 12 months ended September 2020, California’s higher electricity prices translated into Commercial & Industrial ratepayers paying $11.7 billion more than ratepayers elsewhere in the US using the same amount of energy.

California Natural Gas Prices in September

Average prices ($ per thousand cubic feet) for the 12 months ended September 2020 and changes from the previous 12-month period for each end user: