Report: California’s ‘ambitious’ policies to reduce greenhouse gases are driving up electricity costs

Electricity prices in California have risen significantly over the past few years, which officials say is partly due to that Green energy policies It is paid throughout the state.

The Legislative Analyst’s Office (LAO) has released a new report revealing monthly electricity rates for residential customers In california By approximately 50% on average since 2019.

“Overall, average residential electricity prices in California have risen faster than inflation in recent years, rising about 47% over the four-year period from 2019 through 2023, compared with overall price growth of about 18%,” the report said. .

Some of the main contributing factors to higher prices resulted from the state’s “ambitious” greenhouse gas reduction goals and taxpayer-funded green energy programs, according to the LAO.

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California’s Renewable Portfolio Standard (RPS) requires that by 2030, 60% of an electricity provider’s portfolio must come from renewable energy resources, which the report found has increased electrical costs for taxpayers.

The RPS requirements reportedly led to a 5% increase in overall retail rates for customers using investor-owned utilities (IOUs) — such as PG&E, San Diego Gas & Electric, and Southern California Edison.

Californians are also seeing increased energy costs as a result of programs that use their tax dollars to fund the state’s accelerating transition to clean energy, such as funding the construction of more charging stations for zero-emission vehicles.

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The report also noted that although California has reached some greenhouse gas emissions reduction goals in the near future, “the level of reductions needed to reach subsequent goals is much greater.”

One subsequent goal noted in the report was AB 1279, signed by Governor Gavin Newsom in 2022, which seeks to require 85% of the state’s population Greenhouse gas emissions to below 1990 levels by 2045.

As a result, California reportedly has the second-highest energy prices in the country, with Hawaii coming in first, the LAO found. “On average, residential electricity prices in California are nearly double those in the rest of the country,” the report states.

It was also noted that low-income customers in the state who participate in California’s alternative energy rates pay “significantly discounted rates” about 30% to 35% less than other residents.

“The state’s efforts to reduce greenhouse gas emissions have helped establish California as a state leader on climate policy and have contributed to environmental benefits such as improved air quality. However, these efforts have come with costs, some of which have resulted in increased electricity prices.” The report reads.

“We believe the state’s greenhouse gas reduction efforts have contributed significantly to the state’s high electricity prices, but they are certainly not the only factor,” LAO wrote.

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Other drivers of cost increases identified in the report include higher costs associated with wildfires and fixed-fee swaps for debt securities.