California Electricity Rates Soar, Nearing Double National Average, Sparking Economic Concerns

Mayor Matt Mahan has voiced strong concerns regarding the escalating cost of energy in California, stating that a reported 34% increase in the state's energy costs, while neighboring states experience falling prices, is "unsustainable." According to the Mayor, this disparity threatens California's future economic competitiveness.

California's electricity rates consistently rank among the highest in the United States. Data from May 2025 shows the state's average residential electricity price at 32.41 cents per kilowatt-hour (¢/kWh), nearly double the national average. Over the past decade, average residential electricity rates in California have surged by an alarming 104% between January 2015 and April 2025, as reported by the Public Advocates Office of the California Public Utilities Commission (CPUC).

Several factors contribute to California's high and rising energy costs. Significant investments in wildfire prevention and grid modernization, including upgrading power lines and equipment, are passed on to consumers. Additionally, the state's support for solar power programs and assistance for low-income households, while beneficial, shift costs to other ratepayers. The structure of investor-owned utilities, which are permitted to earn a return on their investments, also plays a role.

In contrast, some neighboring states have seen more stable or even decreasing electricity costs. Nevada, for instance, experienced an 8.4% decrease in residential rates between August 2024 and August 2025. While Arizona's average cost per kWh barely increased by less than 2% from May 2024 to May 2025, it remains significantly lower than California's.

The California Public Utilities Commission (CPUC) is actively working to address these affordability issues. Efforts include the implementation of a Base Services Charge in November 2025, aiming to restructure residential bills and make electric technologies more affordable. Legislation like SB 254 is also targeting wildfire risk reduction and transmission investment costs to rein in electricity prices, alongside the California Climate Credit, which provides rebates to customers.