Implementing measures based on the “California model” could drive up energy costs
At a recent press conference, California Governor Gavin Newsom boldly announced what he called a “fact”: “California has lower residential electricity bills than states like Texas or Florida.”
Ask any Californian who pays their electric bills in the summer, and they’ll tell you a different story. Government data also offers a fact check — figures from the Energy Information Administration show that the average monthly electricity price in May was 34.3 cents per kilowatt-hour (second highest after Hawaii), compared to 14.7 cents in Texas and 13.63 cents in Florida.
These “nation-leading climate policies” are an example of what Newsom calls the “California Way,” and Vice President Kamala Harris of California is embracing it in her presidential campaign. As documented in our new Pacific Research Institute book, the California Way includes a host of bad policies on issues like crime and homelessness, energy mandates, and restrictions on worker freedoms. Taken together, these ideas leave the state’s 40 million residents facing higher taxes, higher costs, and less freedom.
Depending on which way the political winds blow, every American could ultimately suffer from California’s path. As Newsom’s recent political roadshow through Republican states shows, these bad policies are no longer constrained by the Sierra Nevada mountains. They are inspiring the Biden-Harris administration as well as state and local policymakers across the country.
When it comes to energy, California imposes a complex set of regulations, taxes and subsidies on electricity production. These include taxpayer-funded subsidies for electric cars and unrealistic 100% renewable energy targets. PRI research found that residents pay an average of $1,450 per year for electricity, with some residents paying more than $2,000 per year. That’s 56% more than the U.S. average, even though residents use 34% less electricity.
Worse still, a recent controversial proposal would have charged people for electricity based partly on their income rather than on the amount of energy they actually use.
Despite Newsom’s public relations campaign against oil companies’ “price gouging,” Californians are paying $1.41 more per gallon due to state taxes, fees and regulatory costs for oil production. Even if you can afford to fill up your car, you may not be able to find a gas station given the growing movement in several cities to ban the construction of new gas stations.
Don’t forget the impending ban on the sale of new gasoline-powered cars in the state starting in 2045. Aside from dictating what cars people must buy, this rule also sets the state up for regular power outages. PRI’s research shows that once the rule goes into effect, the state will conservatively be short 21.2% of the daily energy needed to charge the vehicles and meet the state’s other electricity needs.
Then there are the green regulations that are putting people out of work. A recently passed law says the state will ban gasoline-powered lawn equipment, placing a significant cost burden on lawn care and landscaping businesses that are now a path to prosperity for many entrepreneurs. Another regulation by Southern California air quality regulators will ban commercial gas ovens in kitchens used to bake baked goods for restaurants and stores by 2036. Once fully implemented, this will cost about 3,200 jobs.
Some may argue that these crazy California-dreamed-up measures won’t catch on nationwide. But think again. The recent controversy surrounding federal bureaucrats reportedly considering a ban on gas stoves, mimicking an idea first floated in Sacramento, shows that the California way is spreading nationwide.
With Harris now at the forefront of the presidential nomination, the California Way provides a glimpse into the policy agenda of a future Harris administration, including environmental policy.
Kerry Jackson and Tim Anaya are co-authors of the Pacific Research Institute’s The California Left Coast Survivor’s Guide.
