California Electricity Rates Surge, Hitting Household Budgets

Residential rates projected to climb 25-30% by 2026 as utilities invest in infrastructure and transition to clean energy

Apr. 12, 2026 at 11:34am

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A geometric abstract illustration composed of overlapping triangles and rectangles in shades of blue, red, and yellow, conceptually representing the rising cost of electricity in California.As California's electricity rates climb, residents seek innovative solutions to manage soaring household energy costs.San Diego Today

California residents are facing a significant surge in electricity costs, with residential rates nearly doubling since 2013 and projections indicating further steep increases through 2026. The escalation in pricing is driven by a combination of climate-related infrastructure investments, aging power grids, and rising fuel costs, leaving many households to manage bills that far exceed national averages.

Why it matters

The rapid rise in electricity costs is straining household budgets across California, hindering broader decarbonization efforts as the cost of electricity surges beyond the rate of inflation. This is forcing residents to seek out alternative energy solutions to reduce monthly expenses, though the path to widespread adoption remains complex.

The details

According to data from the California Public Utilities Commission, residential electricity rates are projected to climb an additional 25 to 30 percent by 2026. The three largest utilities in the state—Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E)—have all announced rate increases for 2025 and 2026. For PG&E, the average rate is expected to rise from $0.31/kWh in 2023 to $0.44/kWh by 2026, a 42 percent total increase. SCE rates are projected to increase from $0.29/kWh in 2023 to $0.41/kWh by 2026, a 41 percent rise. SDG&E rates are expected to climb from $0.34/kWh in 2023 to $0.47/kWh in 2025.

  • In 2023, the average monthly electric bill in California was approximately $124.
  • By 2024, the average monthly electric bill rose to $186, a 29 percent increase over the national average.

The players

Pacific Gas and Electric (PG&E)

One of the three largest utilities in California.

Southern California Edison (SCE)

One of the three largest utilities in California.

San Diego Gas and Electric (SDG&E)

One of the three largest utilities in California.

Tom Steyer

A proponent of proposals to cut power bills by 25 percent, though some experts have expressed skepticism regarding the feasibility of such a reduction.

Public Advocates Office

A state agency that has noted that rooftop solar subsidies have contributed to rising costs for some utility customers.

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What they’re saying

“Rooftop solar subsidies have contributed to rising costs for some users, and rates will continue to climb unless there are changes in how utilities recover their expenses.”

— Public Advocates Office

What’s next

Proposals for relief, such as Tom Steyer's claim that he could cut power bills by 25 percent, are being evaluated, though some experts have expressed skepticism regarding the feasibility of such a reduction. The search for lower-cost alternatives, including solar power systems combined with energy storage, continues as residents and policymakers seek solutions to the escalating electricity costs.

The takeaway

The rapid rise in electricity costs in California is straining household budgets and hindering broader decarbonization efforts, forcing residents to seek out alternative energy solutions to reduce monthly expenses. However, the path to widespread adoption of lower-cost alternatives remains complex, with ongoing debates over the role of subsidies and utility cost recovery models.