The latest rate increase of 2024 has arrived, bringing the total number of increases this year to 4. Each rate increase has been defended by the utility and approved by the CPUC, but consumer advocacy groups are sounding the alarm as average bill costs balloon to previously unheard of levels. When the year began with one rate increase approved and another pending, people were already starting to feel the impact, but as the year has progressed, it has become more and more apparent that things were going to become painful.
It is hard to imagine that rates could get any higher, except for the fact that we know more rate increases are planned for next year. With the burden of covering the many expenses of the utility seeming to fall on the customers who rely on them for power, energy bills are becoming much more than just a casual overlooked expense. Your monthly energy bill is no longer a predictable line item – it is variable and impossible to plan around, not to mention hundreds of dollars more than it used to be. Let’s explore the issue in depth, and consider our options for relief as we plan for a future of even higher rates.
To understand the position most people are in with the current state of energy prices in California, there are a few things you need to understand. First and foremost, California residents already have some of the most expensive energy in the country. Before you even add in any of these increases to the mix, if you live in California you’re already paying a premium for your power. That is the setting for the rate changes we’ve experienced this year – we’re building on top of an already high energy cost.
Rate Increase #1
The first rate increase of 2024 actually came in 2023, when the utility requested a 26% rate hike to support a number of safety initiatives, like undergrowning power lines, wildfire risk reduction, and grid capacity and resilience. All of these are important projects to be sure, but the utility should have been undertaking all of these efforts all along, and this was the start of a theme for the rate increases of 2024: ratepayers covering the expenses of the utility. The final rate increase was negotiated down to 12.8% by the CPUC.
Rate Increase #2
The second rate increase of 2024 took place in March – April, coming in hot on the heels of the first rate increase of the year. Not three months after their push to secure more money from ratepayers, the utility pushed for and secured a flat increase to both gas and electricity, increasing the average overall energy bill across the state. There was no debate or explanation of this increase, which was buried on the consent agenda and voted on as part of a large parcel of items to be voted on.
Rate Increase #3
The third rate increase of 2024 came in September, and while it fell on the gas side of your bill, this represents a meaningful increase for most if not all ratepayers. Unless you’ve had the ability to invest heavily in electrification and are using brand new energy efficient appliances, you will likely feel the impact of this rate hike, especially as we move into the fall and winter months. Without an electric heat pump installed in your home, that is going to move the number up on energy costs through the end of the year and beyond.
Rate Increase #4
The fourth and hopefully final rate increase of 2024 is set to begin in October, as the utility mirrors the increase they just applied to the gas portion of your bill with a similar increase on your electricity. The lingering question of course is how much will this add to your energy bill? Well, some residents are reporting an increase of $40-50 per month, while others are easily seeing their bills climb by hundreds of dollars monthly. One thing is for sure – your energy bill has gone up quite a bit this year, and you can never truly know what you’ll owe when the next billing period comes around.
The hope is that the utility will follow through on their recent comments that they are working to reduce rates, but nothing in their current behavior suggests that this is a priority for them. This year did see the rollout of a temporary rate reduction, but the decrease pales in comparison to the multiple increases, and is also set to expire after a short period of time. As we look to the new year and beyond, it is clear that we can expect this kind of rate increase schedule to become more the norm than not, so it falls to us, the residents and ratepayers, to find a solution to this persistent problem.
The most obvious and impactful solution to the rate hike woes we’ve all been experiencing is solar + storage. With on site solar generation and battery enabled energy arbitrage, you can set yourself up to save big on your monthly energy expenses. Your wildly variable and burdensome energy bill is replaced by a fixed low monthly payment, and you can enjoy the peace of mind that comes from that kind of energy independence. Our solar modeling tool is a great way to visualize what your home could look like with a solar system, and the climate credit in October is a great way to see what the impact of solar could look like on your energy bill.
