Over the last 5 years, commercial electricity rates in California have increased at an average annual rate of approximately 7% to 9% per year, depending on the utility provider.
This translates to a cumulative total increase of roughly 35% to 50% over the 5-year period for major commercial rate classes. And the annual increase is more likely to become larger due to wildfires, under-grounding and upgrading of transmission lines. The electricity rate of commercial customers in California now sit between 24¢ and 26¢ per kWh on average, well above the U.S. commercial average of ~13.5¢ per kWh.
Primary Drivers Behind the Rate Hikes
Wildfire Mitigation & Grid Hardening: Billions of dollars spent by IOUs on under-grounding power lines, vegetation management, and wildfire liability recovery mechanisms approved by the CPUC.
Transmission & Distribution Infrastructure: Upgrading aging grid components to accommodate electrification goals and handle rising peak summer loads.
Renewable Energy Integration & Storage: Expanding grid-scale battery storage and transmission capacity to integrate required renewable resources.
Key Breakdown by Major Utility (IOUs)
The price increases vary across California's major Investor-Owned Utilities (IOUs):
Pacific Gas & Electric (PG&E): Average commercial rate increases have averaged ~7% to 8% annually.
San Diego Gas & Electric (SDG&E): Rates have consistently seen the highest hikes, averaging ~8% to 9.5% annually.
Southern California Edison (SCE): Commercial rates have risen by ~7.5% to 9% annually.
*Stay tuned to frequent blogs on the Pegasus site for suggestions for reducing your energy use