In recent years, many Californians have noticed a disturbing trend: their electric bills are rising higher than ever, sometimes exceeding their rent. So what is causing this increase, and why are California’s electricity prices now among the highest in the country, surpassed only by Hawaii?
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Rising costs and climate challenges
Over the past five years, electricity prices have skyrocketed across the United States, and especially in California, as extreme weather caused by climate change have increased energy demand.
Record-high temperatures have forced many Americans to stay indoors and crank up their air conditioners, only adding to the stress. Average household electricity prices nationwide are set to rise 21.9% between 2018 and 2023, according to a recent report from S&P Global.
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California stands out, with electricity prices rising 47.8% during that period, one of the highest in the country. The blame is often placed on the state’s push to switch to green energy, but a new report from S&P Global shows that’s only part of the story.
The state’s increased wildfire protection efforts due to climate change are also driving up costs. In 2023, nearly 13% of PG&E’s residential customers’ monthly bills went toward wildfire protection. In addition, California regulators approved PG&E to raise $2.6 billion through rate increases to make its operations safer.
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The human influence
Rising electricity costs are hitting many households hard, making it increasingly difficult to cover general living expenses. According to a report by the National Energy Assistance Directors Association and the Center for Energy Poverty and Climate, nearly 24% of U.S. households reported being unable to pay at least one electricity bill in the past year.
Residents like Jessica Simpson Nehrer in Borrego Springs, California, are feeling the squeeze. She told the WSJ that her electric bill rose to $1,873.90 in June, more than her rent of $1,200. Grocery store owner Rodger Gucwa, also in Borrego Springs, is struggling with monthly electric bills that are almost as high as his rent despite efforts to cut costs.
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California in comparison
California is not an isolated case. Other states have also seen sharp increases in electricity prices over the past five years. Maine experienced a massive 65.6 percent increase in electricity prices, the largest in the country, largely due to delay costs from importing natural gas and dealing with storm damage. At the same time, New Hampshire, Massachusetts and Connecticut also saw large price increases, all of them over 49 percent.
Interestingly, while Northeastern states and California saw large price increases, some Midwestern states saw much smaller or even lower prices. For example, North Dakota and South Dakota saw minimal price increases, while Wyoming and Kansas saw slight decreases in electricity costs (1.2% and 2.1%, respectively).
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What is being done?
California must protect its citizens from the increasing threat of wildfires. Lawmakers, regulators and consumer groups must find ways to manage these rising costs for citizens and businesses. Some are already calling for tighter controls on utility spending. Others want changes to help low-income households avoid being hit hardest.
The situation is undoubtedly complicated and with prices continuing to rise, people are wondering how much more they can bear.
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This article: Electric bills now exceed rent in California. Why are prices higher than anywhere else except Hawaii? originally appeared on Benzinga.com
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