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Richard Rider

Electricity Cost: CA vs U.S. — and TX

This month my home SDG&E electricity bill added a third price category — a “high usage charge.”  See below.

Actually I have no problem with such tiered pricing, but the high cost for EACH tier is breathtaking when compared with most other states.  Compare my SDG&E (and California) rates with the latest (November, 2017) numbers from the U.S. Energy Administration (EIA) provided below.


Tier 1 — 0-374 kWh       Tier 2 — 375-1152 kWh      Tier 3 — 1153 and up
23 cents                            40 cents                                47 cents(!)

My total usage (with a solar array): 396 kWh


Here are the EIA November, 2017 numbers, with comparisons of CA with the nation — and with Texas.  Note that my above SDG&E rates are CONSIDERABLY higher than the CA average.  My LOWEST tier is over 4 cents higher than the CA residential average.  The SDG&E top residential tier is over FOUR TIMES higher than the national average.

I throw in the Texas rates to remind us of the contrast between the hated Lone Star State and our Golden State.   One major factor driving the low Texas rates is that they have a market system of electricity production and sales. Customers can select their energy source, which keeps prices down.

Another major advantage Texans (and most other states) have is that electricity producers are relatively free to provide power from the most efficient energy source.  Low polluting natural gas is the preferred source — as Texas lacks the nutball alternative energy mandates that California voters seem to prefer.


Per kWh in 2017   Residential               Commercial         Industrial        All sectors
CA cost of electricity $0.1877 $0.1516 $0.1308 $0.1590
U.S. cost of electricity $0.1301 $0.1055 $0.0679 $0.1038
CA % higher than U.S. avg. 44.3% 43.7% 92.6% 53.2%
TX cost of electricity $0.1140 $0.0840 $0.0533 $0.0840
CA % higher than TX 64.6% 80.5% 145.4% 89.3%


NOTE: Keep in mind that these U.S. figures are the national averages — INCLUDING California. California has almost 1/8 of the entire nation’s population, so its uber-high rates skew the national average.  Compared with just the other 49 states (a comparison I can’t make with this data). the difference would be even HIGHER.

Of course, what saves most Californians (the ones living relatively near the coast) is our mild weather, and our very favorable solar energy conditions — a high number of sunny days coupled with taxpayer subsidies.  We’ve had a solar array on my home roof for years.

But these advantages are less important in the “commercial” (think shopping centers and office buildings) and ESPECIALLY the “industrial” categories.  In these categories, most of the energy use is unrelated to the climate, so the energy cost savings other states offer is a big factor in the decision by manufacturers to locate their business outside California.

Indeed, manufacturing tangible products on industrial sites (as opposed to software and services) is all but dead in the Golden State.  Such firms are viewed as “dirty industries.”