Energy prices in California are going through the roof; blackouts imminent

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Two inexorable energy trends are underway in California: soaring electricity prices and ever-worsening reliability – and both trends bode ill for the state’s low- and middle-income consumers.

Last week, the state’s grid operator, the California Independent System Operator, issued a “flex alert” that asked the state’s consumers to reduce their power use “to reduce stress on the grid and avoid power outages.” CAISO’s warning of impending electricity shortages heralds another blackout-riddled summer at the same time California’s electricity prices are skyrocketing.

In 2020, California’s electricity prices jumped by 7.5%, making it the biggest price increase of any state in the country last year and nearly seven times the increase that was seen in the United States as a whole. According to data from the Energy Information Administration, the all-sector price of electricity in California last year jumped to 18.15 cents per kilowatt-hour, which means that Californians are now paying about 70% more for their electricity than the U.S. average all-sector rate of 10.66 cents per kWh. Even more worrisome: California’s electricity rates are expected to soar over the next decade. (More on that in a moment.)

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Even though the state’s tattered electric grid can barely meet existing demand – and more rolling blackouts are almost certain this summer – California continues to pile bad policy on top of bad policy. The state has banned the future sale of cars powered by internal combustion engines which will result in dramatic increases in electricity demand and will require, according to a recent report by the California Energy Commission, the installation of 1.2 million new EV charging stations by 2030. Bans on natural gas will further increase electricity demand. Cheered on by the Sierra Club, which is getting tens of millions of dollars from billionaire Michael Bloomberg, about 46 California communities have banned the use of natural gas in homes and businesses. Making the whole thing even more absurd, is that California is pledging to achieve these goals while closing the state’s last remaining nuclear power plant, the Diablo Canyon Power Plant, which by itself produces nearly 10% of all the juice consumed in California.

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