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Electricity rates continue to soar
Rates have nearly doubled in the last five years
Taking his annual look at California governance, Lee Ohanian, a Hoover Fellow at Stanford and UCLA economist, pulls no punches. It was ugly.
He started with a bike and hiking path to cover 8 miles in the once concrete channel that was the Los Angeles River. Paid for with a ½-cent increase in sales tax, the cost is already $1 billion and construction hasn’t started. It was supposed to open last year.
And then, of course, there’s the monument to idiocy, the alleged high-speed rail under construction in the Fresno area with its unfunded first phase to run from Bakersfield to Merced—as if anyone would want to ride that route. The project was sold to voters in 2008 with a cost of $35 billion, with most paid by private investment, running from San Francisco to Los Angeles in under three hours with no public subsidy. The bonds were for $9.95 billion.
The Trump Administration is clawing back $4 billion because the project has failed to meet milestones—it was supposed to be shovel-ready in 2012 and both the Obama and Biden administrations waived requirements to steer money to it.
The total cost of the first phase now is about $38.5 billion to say nothing of the $135 billion estimate for the entire project. Newsom had it right in his inaugural address when he talked about scrapping it. Sadly, he bowed to pressure and has allowed—as former Gov. Jerry Brown set up—revenues from the state’s auction of cap-and-trade licenses to be diverted to the rail project.
Ohanian also cited the deteriorating infrastructure, particularly in the state’s extensive water delivery system as well as the abject failure of a new 9-1-1 system. Why is it that this state that has extraordinary tech companies cannot get that expertise applied to the government in Sacramento?
We are reading more and more in social media forums about how hard people are being hit by soaring Pacific Gas & Electric costs. With the two-week fog and cold snap, we’ve been running our heater daily and it’s necessary. The room I sleep in—with its 12-foot ceilings was 61 degrees twice recently when I woke up around 7 a.m.
Thanks to Michael Austin for showing just how much the Public Utilities Commission, appointed by His Highness Gov. Gavin Newsom, has allowed electricity rates to soar. In 2015, it was 17 cents per kilowatt hour. It also climbed modestly in five years to 20 cents before soaring this decade to 30 cents—nearly doubling. Was it a coincidence that the skyrocketing rates took place during the green-above-all Biden Administration?
Meanwhile, we continue to get hit—hard—at the gas pump. Nationally, gas prices average $2.90, while it’s $4.43 in California. I paid $4 when I filled up this week. And, there are states, Texas, Oklahoma, and the Midwest where prices are in the mid-$2 range and some sinking to about $2.
Thanks to the absurd climate goals established by the Legislature and the former Governator Arnold Schwarzenegger and administered by the state air board, the thrust toward renewable electricity sources has increased costs as has the special blend of gasoline that is limited to California to say nothing of the highest gas taxes in the country at about 90 cents per gallon. The costs hit everyone, but particularly those living paycheck-to-paycheck.
