Why is Electricity Cost More in CA than the U.S.?

Here are the EIA November, 2017 numbers, with comparisons of CA with the nation — and with Texas. Note that my above SDG&E rates are CONSIDERABLY higher than the CA average. My LOWEST tier is over 4 cents higher than the CA residential average. The SDG&E top residential tier is over FOUR TIMES higher than the national average.

I throw in the Texas rates to remind us of the contrast between the hated Lone Star State and our Golden State. One major factor driving the low Texas rates is that they have a market system of electricity production and sales. Customers can select their energy source, which keeps prices down.

Another major advantage Texans (and most other states) have is that electricity producers are relatively free to provide power from the most efficient energy source. Low polluting natural gas is the preferred source — as Texas lacks the nutball alternative energy mandates that California voters seem to prefer.

Residential Electricity Rates by State

(cents per kWh for latest month available)

State Average Rate:

October 2017

Average Rate:

October 2016

% up/down % of U.S. avg. Rank
Alabama 12.73 12.51 1.8% 99% 27
Alaska 22.07 20.73 6.5% 172% 50
Arizona 12.85 12.10 6.2% 100% 30
Arkansas 10.11 9.88 2.3% 79% 3
California 15.37 13.93 10.3% 120% 42
Colorado 12.03 12.10 -0.6% 94% 21
Connecticut 21.30 19.95 6.8% 166% 49
DC 13.44 12.93 3.9% 105% 36
Delaware 14.30 15.44 -7.4% 111% 34
Florida 12.12 10.98 10.4% 94% 23
Georgia 11.42 11.14 2.5% 89% 15
Hawaii 29.29 27.54 6.4% 228% 51
Idaho 10.34 10.24 1.0% 81% 4
Illinois 12.88 13.03 -1.2% 100% 31
Indiana 12.40 12.69 -2.3% 97% 24
Iowa 12.08 11.86 1.9% 104% 22
Kansas 13.32 13.25 0.5% 104% 33
Kentucky 10.94 11.06 -1.1% 85% 8
Louisiana 9.72 9.52 2.1% 76% 1
Maine 16.20 16.26 -0.4% 126% 43
Maryland 14.40 15.17 -5.1% 112% 37
Massachusetts 19.35 18.82 2.8% 151% 46
Michigan 15.20 15.67 -3.0% 118% 41
Minnesota 13.53 13.11 3.2% 105% 35
Mississippi 11.20 10.58 5.9% 87% 13
Missouri 10.79 10.76 0.3% 84% 7
Montana 11.42 11.21 1.9% 89% 15
Nebraska 10.95 10.73 2.1% 85% 9
Nevada 12.81 12.04 6.4% 100% 29
New Hampshire 19.90 18.86 5.5% 155% 48
New Jersey 14.70 15.26 -3.7% 114% 39
New Mexico 13.01 12.57 3.5% 101% 32
New York 18.76 18.26 2.7% 146% 45
North Carolina 11.69 11.63 0.5% 91% 18
North Dakota 11.07 10.80 2.5% 86% 12
Ohio 12.58 12.52 0.5% 98% 26
Oklahoma 11.01 11.18 -1.5% 86% 11
Oregon 10.97 10.98 -0.1% 85% 10
Pennsylvania 14.69 14.32 2.6% 114% 38
Rhode Island 19.53 18.87 3.5% 152% 47
South Carolina 12.73 12.64 0.7% 99% 27
South Dakota 12.43 12.17 2.1% 97% 25
Tennessee 10.53 10.71 -1.7% 82% 5
Texas 11.24 11.02 2.0% 88% 14
Utah 10.60 10.63 -0.3% 83% 6
Vermont 17.95 17.82 0.7% 140% 44
Virginia 12.02 11.17 7.6% 94% 20
Washington 9.84 9.52 3.4% 77% 2
West Virginia 11.96 11.90 0.5% 93% 19
Wisconsin 15.09 14.40 4.8% 118% 40
Wyoming 11.61 11.50 1.0% 90% 17

CA % higher than TX 64.6% 80.5% 145.4% 89.3%
NOTE: Keep in mind that these U.S. figures are the national averages — INCLUDING California. California has almost 1/8 of the entire nation’s population, so its uber-high rates skew the national average. Compared with just the other 49 states (a comparison I can’t make with this data). the difference would be even HIGHER.

Of course, what saves most Californians (the ones living relatively near the coast) is our mild weather, and our very favorable solar energy conditions — a high number of sunny days coupled with taxpayer subsidies. We’ve had a solar array on my home roof for years.

But these advantages are less important in the “commercial” (think shopping centers and office buildings) and ESPECIALLY the “industrial” categories. In these categories, most of the energy use is unrelated to the climate, so the energy cost savings other states offer is a big factor in the decision by manufacturers to locate their business outside California.