Solving California’s energy affordability crisis can help the whole nation

Electricity prices in California are now double the national average, and two energy policy groups, GridLab and Energy Innovation, argue the state needs more than quick fixes to bring bills down for good. A gubernatorial candidate has proposed a rate freeze and two free hours of midday power, but the groups say the real drivers of high bills run deeper: rising distribution costs (now the biggest part of a typical bill), wildfire mitigation spending, tangled utility regulation, and rate structures that charge everyone by the kilowatt-hour rather than reflecting who actually uses the grid.

Their proposed fixes could eventually show up on your bill in a few ways. One is shifting some wildfire prevention costs off ratepayers and onto other funding sources, including state support, which could also help lower home insurance costs in fire-prone areas. Another is rethinking fixed charges versus per-kilowatt-hour charges — a change that could make electric bills more predictable and could increase the savings from going electric, since higher fixed charges paired with lower usage charges tend to reward homes that have switched to heat pumps or electric vehicles. The groups also want utilities rewarded for keeping costs down rather than for spending more, and want to make better use of the existing grid through things like flexible, demand-responsive connections.

None of this is final policy yet. It is a roadmap aimed at California's next governor, its utility regulators, and lawmakers, meant to guide decisions on rates and wildfire costs in the state, with other states watching how it plays out.