20% of California Residents Can Not Pay Their Electric Bill On Time

Written by Chriss W. Street

Prior to the temperature spike over the last 30 days, The Public Advocate Office reported California average residential monthly utility bills doubled in cost over the last decade to $774 per month, causing about 20% of Californians to fail to pay their electric bill on time.

California has the highest residential electric costs in the continental United States at 34.31 cents per kilowatt hour.  That is more than double the U.S. national average of 16.46 per kilowatt hour.  The electric utility bill crisis accelerated over the last three years with monthly bills from both Southern California Edison and Pacific Gas & Electric customers jumping by 51%, while San Diego Gas & Electric customers suffered a 20% jump.  That compares to an 11% household income increaseduring the same period.

The California Public Utilities Commission has a grim record for implementing unproven social justice strategies to regulatestate electric rates.  The CPUC in 1996 supported passage of AB 1890 “deregulation.”  The scheme gave state bureaucrats management authority for all wholesale electric buying and selling on its Power Exchange.  Six years later, the brilliant bureaucrats suffered a spectacular $42 billion in derivative trading loss for guessing the wrong direction for energy demand volumes and wholesale costs.  

The Public Advocate highlights the current California consumer electric rate crisis is due to a) wildfire mitigation losses; b) sustainable transmission and distribution investments; and 3)inefficiencies of rooftop solar net energy metering incentives.    

Because of concerns about global climate change, the currentCPUC regulatory structure does not allow electric utilities to make profits on the volume of electricity sales to customers.  The regulatory structure only allows companies to make profits by charging a fixed percentage rate of return on size of capital investments.  

PG&E has the highest electric utility profit rate in California because the company maximizes its capital costs by taking-down inexpensive above-ground insulated power poles, digging trenches, and then bury the lines underground existing cables at a cost of about $1.85 million to $6.072 million per mile. That compares to Southern California Edison’s use of insulated above ground cabling at a cost of about $750,000 per mile.