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California’s electricity prices are growing so high that they threaten the state’s ability to convince enough people to ditch fossil fuel-powered cars and appliances, new research says.

The state’s electric rates are now two to three times what it costs to provide power, a paper released by the energy institute at UC Berkeley’s Haas School of Business and the nonprofit think tank Next 10 reported.

As much as 77% of what investor-owned electric companies recover through rates are related to fixed costs that don’t change based on consumption, the paper says. That includes generation, transmission and distribution costs but also subsidies for low-income households and public programs such as increasing energy efficiency, the authors concluded.

Low- and average-income residents are disproportionately burdened by the state’s high electric prices because they use only modestly less power than people with higher incomes. High-income households are also more likely to install solar panels on their roofs, reducing their utility bills, the paper said.



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