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Again after I served within the California State Assembly from 2004 to 2010, California ranked seventh or eighth within the nation for electrical energy prices. On the time, the Democratic majority in Sacramento was pushing invoice after invoice mandating higher reliance on renewable vitality, assuring everybody that these insurance policies would make us appear like “geniuses” when the value of fossil fuels inevitably soared.
I warned that these legal guidelines, laws and subsidies would as a substitute drive up electricity costs for Californians, making the grid much less dependable and California’s financial system much less aggressive.
Now, 20 years later, the outcomes are in. In 2024, the U.S. Power Data Administration (EIA) reported that California had the second-highest electrical energy costs within the nation for the second yr working, behind solely Hawaii. The Golden State’s misguided vitality insurance policies have steadily elevated the value of electrical energy as inexperienced vitality mandates, grid instability and regulatory burdens have taken their toll. In the meantime, states with extra balanced vitality insurance policies — pure fuel, coal and nuclear energy — have fared much better.
What’s worse, California’s pure benefit in AI will probably be misplaced to Texas and different low-cost vitality states. California’s industrial electrical energy costs averaged 21.98 cents per kilowatt-hour in 2023 vs. 6.26 in Texas, a whopping 251% value premium that no electricity-hungry AI set up or server farm operator goes to pay.
California’s aggressive pursuit of inexperienced vitality targets spiked the price of electrical energy. FILE: Solar energy vitality microgrid in California. (Photograph by SANDY HUFFAKER/AFP through Getty Pictures)
What Went Improper?
The core challenge is straightforward: California’s policymakers prioritized renewable energy mandates over affordability and reliability. Over time, they’ve pressured utilities to combine ever-growing quantities of wind and solar energy whereas discouraging pure fuel, nuclear and large-scale hydroelectric tasks. These choices ignored the fact that intermittent renewables require intensive grid upgrades, expensive backup energy sources and costly storage options — all of which drive up prices for customers and business.
California’s excessive electrical energy costs should not an accident; they’re a direct consequence of those insurance policies. The state’s cap-and-trade system, restrictive allowing legal guidelines and mandates just like the Renewable Portfolio Commonplace (which requires utilities to generate 60% of their electrical energy from renewables by 2030) have all contributed to rising charges.
On the identical time, bureaucratic obstacles have made it almost not possible to construct new pure fuel vegetation or modernize present infrastructure. From 2014 to 2024, California authorised or constructed solely 5 pure fuel vegetation, 4 of which changed older amenities for a complete output of as much as 4 gigawatts. By comparability, within the prior 10 years, California commissioned dozens of vegetation totaling greater than 20 gigawatts of nameplate capability.
In the meantime, in New England…
California just isn’t alone in affected by self-inflicted vitality woes. New England, residence to the third- and fourth-highest electrical energy prices within the nation (Connecticut and Massachusetts), faces an analogous downside. These states have aggressively shut down coal, resisted pure fuel enlargement and did not put money into nuclear energy — leaving them weak to vitality shortages and value spikes.
One of the vital baffling examples of New England’s vitality mismanagement is its reliance on imported liquefied pure fuel (LNG). Regardless of sitting only a few hundred miles from the considerable pure fuel reserves of Pennsylvania’s Marcellus Shale, New England has struggled to entry this low-cost, home vitality supply. Why? As a result of environmental activists and politicians in New York have blocked the development of recent pipelines that may transport reasonably priced pure fuel to the area. As an alternative, New England has been pressured to import LNG from abroad, together with from the Caribbean and, at occasions, even Russia.
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Sure, you learn that accurately — whereas the U.S. turned the world’s high producer of pure fuel, states within the Northeast have needed to depend on international sources due to self-imposed pipeline constraints. This dependence on imported LNG has contributed to a number of the highest electrical energy costs within the nation and left the area uncovered to international vitality market fluctuations.
The Classes Are Clear
California and New England function cautionary tales. When politicians prioritize ideological vitality insurance policies over frequent sense, the result’s larger prices, lowered reliability and higher dependence on international vitality sources.
California just isn’t alone in affected by self-inflicted vitality woes. New England, residence to the third- and fourth-highest electrical energy prices within the nation (Connecticut and Massachusetts), faces an analogous downside.
The states with the bottom electrical energy costs — locations like Louisiana, Oklahoma and Texas — have embraced home vitality manufacturing, constructed fashionable infrastructure and resisted heavy-handed authorities mandates. In the meantime, California and the Northeast have imposed regulatory burdens that make vitality costlier and fewer dependable.
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The proof is obvious: Inexperienced vitality insurance policies imposed on vitality markets have made life tougher for working households and companies in states which have embraced the Inexperienced New Deal. If policymakers in California and the Northeast actually cared about affordability and reliability, they’d rethink their hostility to pure fuel, enable new pipeline development, and rethink their blind push for intermittent renewables and the expensive backups they require.
As an alternative, they proceed doubling down on the identical failed insurance policies. And as electrical energy payments rise and blackouts loom, the folks paying the value aren’t the politicians in Sacramento or Boston — they’re the hardworking households who simply wish to maintain their lights on with out breaking the financial institution.
