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California’s approach to power pricing could discourage electrification, experts fear

Kavya Balaraman of Utility Dive reports that California’s approach to power pricing could discourage electrification.

The C3 Take
  • California’s utilities operate through volumetric pricing, where fixed costs are bundled with increased per-kilowatt rates.
  • This model, which is touted by environmentalists, is regressive and harms low-income families who are forced to spend a larger percentage of their income on high electricity costs.
  • Due to these high costs, experts are beginning to fear that electrification may be unfeasible for California.
  • Instead of punishing its citizens for using electricity, California should embrace a market structure that provides lower rates and increased consumer choice.

“‘The bottom line is at our current pricing, electric space heating and electric hot water heating and electric clothes drying are just not even close to competitive if you can get natural gas,’ Borenstein added.”  

Read the full article here.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

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