Blame Sacramento, Not Moscow, for California’s Energy Crisis

A fixation on renewables and underinvestment in fossil fuels are causing real economic pain in the state

By Robert Bryce. Excerpts:

"Like Europe, California overinvested in renewables, underinvested in hydrocarbons, prematurely shuttered its baseload power plants, and relied too heavily on imported energy. Now, as Europe is ensnared in Vladimir Putin’s energy trap, Californians watch as the state’s energy prices head toward the stratosphere.

On Feb. 25, the day after Russia invaded Ukraine, the Energy Information Administration reported that the all-sector price of electricity in California jumped by 9.8% last year to 19.76 cents per kilowatt-hour. Residential prices increased even more, jumping 11.7% to an average of 22.85 cents per kilowatt-hour. California residential users are now paying about 66% more for electricity than homeowners in the rest of the U.S., who pay an average of 13.72 cents per kilowatt-hour.

California’s rates are rising far faster than those in the rest of the country. Last year, California’s all-sector electricity prices increased 1.7 times as fast as the rest of the U.S., and residential prices grew 2.7 times as fast as in the rest of the country."

"The surging energy costs show yet again the ruinously regressive effect of Sacramento’s decarbonization policies, which include a requirement for 100% zero-carbon electricity and an economywide goal of carbon neutrality by 2045."

"On Feb. 10, the California Public Utilities Commission unanimously approved a scheme that would add more than 25 gigawatts of renewables and 15 gigawatts of batteries to the state’s grid by 2032 at an estimated cost of $49.3 billion. Also last month, the California Independent System Operator released a draft plan to upgrade the state’s transmission grid at a cost of $30.5 billion. The combined cost of those two schemes is about $80 billion. Dividing that sum among 39 million residents works out to about $2,050 for every Californian."

"For proof of how big public-works projects can exceed initial estimates, consider California’s high-speed train. That project is now expected to cost $105 billion, which is 2½ times the $42 billion Californians were told they would pay when it was launched in 2008."

"The average price of regular gasoline in the state is now $5.72 a gallon, according to the American Automobile Association."

"When it comes to electricity production, climate activists never tire of claiming that weather-dependent renewables are cheaper than fossil fuels. But the state’s rising electricity prices, and Europe’s energy crisis, prove those claims false. The hard truth is that California policy makers are providing a case study on how not to manage an electric grid."