California’s Electricity Rates Are Nearly the Highest in the USA

Every Californian has heard out-of-towners list reasons why the Golden State is overrated or overpriced. Unfortunately in the case of electricity rates, their criticism is true.

A recent study of electricity rates (kWh) has revealed how pricey power is in California, compared to other states. It ranks at 9th highest in the nation for residential rates and 4th for commercial rates. Vermont, Hawaii, and Alaska are the only states that rank higher in both categories. The maps below illustrate the wide variance.

Seeing that Vermont, Alaska, and Hawaii have high rates isn’t necessarily shocking, between necessary energy imports and undeveloped terrain. However, one would wonder why a state with one of the lowest per capita energy consumption levels, California, would have such expensive electricity.

Interestingly, one of the reasons experts identify is the state’s surplus of generated power. Even with decreasing electricity demand in the state, power plants continue to be planned and built. The widespread residential and commercial solar installations have only added to this energy excess. Consequently, regulators have approved higher rates so that utility providers can recoup the costs associated with construction and equipment upkeep — this passes the expense to bill-paying Californians.

Since the rate isn’t something that can be directly controlled by an individual, all someone can do is decrease their usage in order to spend less on electricity. This is the strategy used by Vermonters, who have below average utility bills even with some of the highest rates. Regardless, California lawmakers will hopefully formulate a less costly strategy to manage the state’s energy surplus.