The report “Making California’s Electricity Cheaper: An Affordability Agenda for the Golden State” published by the Energy Innovation and Grid Lab summarises that affordability is at the heart of almost every policy conversation across the nation, and California is facing a particularly acute energy affordability crisis — the state’s electricity rates are now the second highest in the nation and double the country’s average. Between 2000 and 2024, California’s electricity rates rose faster than inflation and became the highest in the contiguous United States, more than 50% higher than the US average. These prices are untenable, straining household budgets, and threatening the state’s electrification path to a climate-neutral economy. More than 80% of Californians rank lowering bills as a top or important priority for state leaders, and the state’s elected officials have a duty to address these intertwined problems for their constituents. Failure to address California’s rising rates also risks the state’s progress toward lowering its greenhouse gas emissions, which itself is a root-cause affordability tool as wildfires grow more severe with a changing climate and the associated risks and mitigation grow more expensive.
GridLab and Energy Innovation convened a workshop of more than 20 California electricity experts to diagnose what’s causing rising costs and develop actionable policy solutions that address the scale of the challenge. This report defines a policy roadmap to stabilize and ultimately reduce electricity rates for California’s incoming governor, the California Public Utilities Commission (CPUC), the legislature, utilities, and other stakeholders, that will allow California to sustain its clean energy leadership. This paper’s recommendations are for the most part not short-term fixes, but rather long-term policy actions to solve the system-wide forces that would otherwise continue increasing rates. A systematic approach that strengthens regulatory cost mitigation tools, more fairly allocates wildfire costs and risk, and improves the distribution of costs can first slow down spiraling rate increases then reduce them over time.
Access the full report here