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Why Is Electricity So Expensive in California?

Rate data through May 2026 (the latest month EIA has published) · Updated August 21, 2026

As of May 2026, California's average residential electricity rate is 33.25¢/kWh, the 2nd-highest of the 51 states and DC and 80% above the U.S. average of 18.44¢/kWh, per EIA data. The average monthly bill is $135.51 at 408 kWh of usage. The measured reasons are below, each with its source and date; where a claim is an association rather than a measured cost, this page says so.

Average rate, May 2026

33.25¢

per kWh; U.S. average 18.44¢

Average bill

$135.51

at 408 kWh/mo (U.S.: $135.70 at 736 kWh)

Change, 12 months

−0.1%

U.S. average: +6.2%

Change, 10 years

+88%

17.71¢ (May 2016) → 33.25¢/kWh; U.S.: +44%

The ten-year picture

Source: EIA retail sales, residential sector, monthly (rate = revenue ÷ sales). California detail, including the last twelve months as a table, is on the California rates page.

What California's electricity is made from

Source	Share of in-state generation, 2024
Natural gas	40.5%
Utility-scale solar	22.6%
Small-scale (rooftop) solar	14.8%
Hydropower	13.8%
Nuclear	8.6%
Wind	7.3%
Geothermal	4.9%

Computed from EIA electric-power operational data (all sectors, including small-scale solar), 2024. Shares can exceed or fall short of 100% in combination because only the largest sources are listed.

The measured drivers

Wildfire-era delivery costs

The costs that grew fastest are not generation but delivery. For the CAISO region, utility distribution, transmission, and business-operations costs (which include wildfire liability insurance and vegetation management) rose about 6.4 cents per kilowatt-hour in real terms over 2019–2025: distribution about +3.3¢, business operations about +2.6¢, transmission about +0.4¢ (LBNL/Brattle, Retail Electricity Price Trends and Drivers, 2026 Edition; a regional series, not a California-only measurement). California's utility regulator's independent customer advocate reports that wildfire-related costs made up about 27% of PG&E's and 17% of SCE's and SDG&E's total revenue requirements in 2024, roughly $250 to $490 per year for an average residential customer (Public Advocates Office, 2024).

The largest rooftop-solar and net-metering program in the country

Small-scale solar produced 14.8% of California's in-state generation in 2024 (EIA), and net-metered systems offset 12.8% of all retail sales, the deepest net-metering penetration of any large state (LBNL, 2026 Data Update). Net metering compensates rooftop exports at or near retail rates, so the fixed costs of the grid are recovered from a shrinking base of billed kilowatt-hours. Retail sales fell about 7% from 2016 to 2025 while rates rose faster than in any other state. Across all 50 states, net-metering penetration is the single strongest correlate of 2025 price levels; the association is not a causal estimate, and high prices themselves push more customers toward rooftop solar.

Not the utility-scale renewables

California's large utility-scale solar fleet is not what makes it expensive: across states, higher utility-scale wind and solar shares are associated with lower average prices. California is expensive despite having one of the largest solar fleets in the country, not because of it.

The in-state spread

The state average also hides differences between utilities. Among California's large utilities (at least 50,000 residential customers), San Diego Gas & Electric Co averages 53.16¢/kWh while Sacramento Municipal Util Dist averages 17.60¢/kWh, a ratio of 3.0× (May 2026, computed from EIA-861M). Which utility serves you matters as much as which state you live in; the California page lists them all.

Analysis: what a 50-state comparison shows. Across all 50 states in 2025 data, the strongest cross-state correlates of high rate levels are deep net-metering penetration (California: 12.8% of retail sales offset in 2024, per LBNL) and long memory: states that were expensive in 2001 are almost all expensive today. Higher utility-scale wind and solar shares are associated with lower average prices, and belonging to a regional wholesale market (RTO) shows no statistically significant effect. These are associations across states, not causal estimates: high prices themselves push customers toward rooftop solar, so part of the association runs in reverse.

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