ORIGINAL REPORTING: Causes of California’s Rising Power Costs

CPUC and Stakeholders Strive to Stop Spiking Rates

Herman K. Trabish, March 9, 2021 (California Current)

Editor’s note: Electricity might seem expensive but live without it for a couple of days and see what value it has.

California will not let its skyrocketing electricity rates threaten reliability or its policy goals, California Public Utilities Commission President Marybel Batjer told stakeholders during a Feb. 24 full commission hearing.

The costs of California’s policy mandates are driving rates up faster than inflation and straining the budgets of customers made more vulnerable by the recession, stakeholders and CPUC Staff agreed during the day-long session. Additionally, the costs of Net Energy Metering and other distributed energy resources incentives are taxing the budgets of vulnerable customers, making new approaches to affordability urgent.

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Protecting ratepayers “will require aggressive actions,” CPUC Staff’s “Evaluation of Electric Costs, Rates and Equity Issues” reported. Utilities proposed ways to cut wildfire costs and raise revenues outside rates. Stakeholders proposed ways to financially support distributed energy resources and electric vehicle growth. Breakthrough rate designs could ease the burden of rising costs on low and moderate income customers.

Residential energy costs and rates began rising faster than inflation in 2013 and bills continue to grow annually, staff reported. By 2030, residential rates for PG&E will be 40% higher than if they had risen at the rate of inflation from 2013. SCE rates would be 20% higher and SDG&E rates would be 70% higher.

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Distributed energy and EVs can reduce customers’ utility bills but up-front costs are a barrier to low income customer participation, staff found. The middle class may soon need help because “rates are growing so much faster than wages,” Jennifer Dowdell, a senior energy expert with The Utility Reform Network, warned.

Wildfire mitigation costs, transmission development costs, rising transmission use charges, and the state’s increasingly ambitious emissions reduction goals drive up rates. Another growing factor is the cost of the state-mandated Net Energy Metering 2.0 program compensating customers for electricity their distributed resources send to utilities. Net metered generation exceeded the private utilities’ residential electricity consumption in 2019, recent research showed… click here for more

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