Why are electricity prices so high in California?

[raypack]

Not from Cali myself, but saw someone mentioning prices for electricity there in another thread. I must say I was really surprised how high they were. How much was it again for a kWh?

The electricity company will no doubt have many explanations for the high price. Californians are (stereotypically) against pollution and therefore production has to be limited but both legal and illegal demand stays high. Commercial growers stealing electricity raise prices because the company won't take a loss, it will just pass it on to the customers that actually pay. Taxes, whatever...

But in reality I think the power company is run by people who understand how the world works. They know exactly what is going on and how much money is involved. And they want their percentages!

What do you think?

 

[Bobby Stainless]

If you go over a certain amount of kWh, then the price goes up significantly. PGE knows what people are using it for.

 

[raypack]

Haha oh wow that's pretty blatant.

Well can't really blame them, it's a business... And a system like that is fair for the little guy I suppose.

 

[420somewhere]

How much was it again for a kWh?

How much was it again for a kWh?

I pay $ 0.125 a kWh in SmellA

 

[watts]

i heard it's because a lot of the growers are on THE CARE program.. driving prices up for everyone. Seems like the utility company wouldn't allow someone who has such high usage to be on the program. There are guys with 8,000+ watt grows on it.

 

[supermanlives]

greed pure and simple.

 

[Sam the Caveman]

Something I've noticed with power companies in general, especially if they have the monopoly, is that they will spend lots of money on things that they probably don't quite need.

Example, they get brand new trucks it seems like every other year. Another thing is they will subcontract out work to other electrical contractors when there doesn't seem to be any real reason why the power company people can't do it.

Now I may just be fabricating these things in my mind, but I do know that my local power company's profits are limited to a certain percentage. So naturally they will never want to lower rates, they would rather just spend the excess on jet airplanes, company vehicles and their buddy subcontractors. Just last year they were asking for a rate increase from my state legislature to add more capacity to their generators, their request was denied.

I've looked into the tiered rates that PG&E has and I find it quite rediculous. Before I had a grow, I was using around 1200 kwh/mo, sometimes up to 1800 during the summer. If I recall correctly, that would put you into the third tier of usage by PG&E standards.

With my power company, its all .10/kwh, no matter how much you use and no matter when you use it.

 

[krunchbubble]

ive lived in one place where after baseline it jumps 100%, then after so much 200% and then 400% of normal rates...

it was ridiculous....

 

[BudToaster]

i have a dream ... free electricity for all Americans by the end of the decade ... why the fuck not? the technology is pretty trivial, but where's the will?

 

[KSP]

What is California's primary source of electrical power generation? I would guess hydro but don't really know.

 

[yortbogey]

If you go over a certain amount of kWh, then the price goes up significantly. PGE knows what people are using it for.

thats the reason....don't need No-Mo-growers.....

 

[krunchbubble]

What is California's primary source of electrical power generation? I would guess hydro but don't really know.

coal and nuclear power plants with a little bit of wind....

 

[Bobby Stainless]

I believe the CARE program is ending soon.

A lot of rude awakenings, when those 1500-2500 monthly electricity bills start rolling in.

 

[Hammerhead]

I dont think the care program is ending anytime soon. Anybody that is on the care program is disabled or sick. It has noting to do with the price of KWH in Cali. There are thousands of people that have pools or hot tubs even a Aquarium can run into the hundreds per month to run..

 

[Bobby Stainless]

I believe the CARE program is ending soon.

A lot of rude awakenings, when those 1500-2500 monthly electricity bills start rolling in.

 

[KSP]

coal and nuclear power plants with a little bit of wind....

Thanks, should have fired up the google machine. It looks like the nuke power would be pretty cheap, not sure about your coal.

 

[mofeta]

Utility companies may be the most regulated (by the govt.) type of business. They are almost quasi-governmental entities. They basically can't move a muscle without govt. approval. The load of govt. mandates that they must comply with is also huge. In California, it is the California Public Utilities Commission that controls everything.

Besides normal market forces, the govt. regulation is the main reason for high prices. Not least of these are regulations related to global warming. In California, the "California Renewables Portfolio Standard" requires electricity producers to get a certain amount of their energy from "renewable" sources. It mandates that 33% of the electricity is "renewable" by 2020. Right now it is about 15-20%. I think the estimates I have read are that this has added ~10% to the rates in the past few years. California also has their emissions bill, AB32, which strictly regulates emissions by power generators. Believe me, the infrastructure needed to comlply with these standards is not cheap.

This may be replicated on a national level. President Obama would like to implement "Cap and Trade" legislation. This would immediately increase electricity rates (>50% increase).

Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.

As environmental regulations phase out coal-fired plants, the natural gas that is California's main source of energy will increase in cost dramatically.

Another factor is the so-called "capacity costs". You can look that up if you are interested.

The last thing I'll mention is crumbling infrastructure. From about 1970-2000, we just let things coast, barely maintaining infrastructure like transmission lines. Very few new lines were added. A big transmission line costs >$3million per mile to construct. Environmental regulations make it very difficult to build new lines. The last thing I remember reading estimated that ~2$TRILLION dollars would need to be spent on electricity infrastructure over the next 20 yrs. in the US.

Unless things change somehow, expect your electricity to be at least twice as expensive, maybe three times, 10 years from now.


PS: here is an article from the Chicago Tribune that illustrates some of the things I mentioned.

Consumers' electric bills likely to spike as coal plants close

 

[Molson]

Electricity price gouging in California

From 2001, but still relevant.
http://gbr.pepperdine.edu/2010/08/electricity-price-gouging-in-california/

 

[mofeta]

coal and nuclear power plants with a little bit of wind....

This is incorrect. Natural gas is by far the dominant source of power in California. It is supplied by large pipelines that come from Canada and some western states like Texas and Oklahoma.

Hydroelectric and nuclear combined equal about half what is generated from natural gas, coal provides ~1.5%, I think wind is around 2.5-3%.

 

[sweetypie]

theres some kind of power plant i could see from pismo dunes last year the damm stack had a huge flame coming out, it was some crazy lookin shit