California’s electricity price ranked second-highest in the nation in 2025, doubling the U.S. average and squeezing families and small businesses alike.
Story Snapshot
- California’s 2025 average retail electricity price was 27.63 cents per kilowatt-hour, about double the U.S. average of 13.63 cents.
- State watchdogs reported continued rate hikes through 2025 across the three biggest utility territories.
- Residential rates in the contiguous states ranking were the highest in California, with monthly averages near the low 30-cent range.
- Wildfire costs, grid upgrades, and solar compensation rules were cited as core drivers of higher bills.
California’s Price Rank And How It Was Measured
Public reporting in September 2026 said California placed second for average retail electricity prices in 2025, behind Hawaii, at 27.63 cents per kilowatt-hour. The national average was 13.63 cents per kilowatt-hour, placing California at roughly double the U.S. norm. These figures reflect an all-sector average, not just homes. Analysts and outlets drew on 2025 compilations to produce the rank. While different windows exist, the direction is consistent across sources cited here.
Several energy trackers also flagged that California’s residential prices sat at the top among the contiguous states and Washington, D.C., with monthly moving averages around the low 30-cent range during 2025. That placed the state well above many peers and reinforced the affordability concern. The comparing groups used standard federal data and state releases for their summaries. The precise cents-per-kilowatt-hour level varied by month, but the relative gap stayed large.
Documented Increases Across Major Utilities
California’s Public Advocates Office, the state’s independent utility consumer arm, reported continued rate increases across Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Edison through 2025. Its quarterly reports tracked residential rates and other classes through the year. The fourth-quarter 2025 report continued to document upward pressure, confirming what many customers felt on their bills. These official reports give a clear view of how rates changed over time.
Earlier in 2025, the office’s first- and second-quarter updates also recorded increases. These reports detailed the movement in authorized revenues and rate design that flowed into customer charges. They did not pin every dollar to a single cause, but they showed a steady climb across service areas. This pattern supports the claim that the problem was not a one-off spike, but a trend that built over several quarters.
What Is Pushing Bills Higher
Public explanations for higher bills focused on a few main cost drivers. Utilities and policy discussions cited wildfire mitigation and liability, which require heavy spending to harden lines and manage vegetation. They also pointed to inflation in grid parts and labor, and to the cost of upgrading transmission and distribution for reliability. Consumer-facing explainers added that retail solar compensation rules raise costs shifted to non-solar customers when credits are high.
These drivers interact with policy goals and weather risks. Building out wires for a growing and cleaner grid costs money now, even if it may help long term. Fire seasons have made insurance and safety projects more expensive. When combined with earlier design choices on rooftop solar credits, the total result shows up as higher per-kilowatt-hour rates. The Public Advocates Office’s late-2025 report also referenced wildfire and grid investments among the upward pressures.
Why This Matters To Households And Small Firms
High electricity prices hit lower and middle income families hardest because they have less room in their budgets. Small shops that chill food, run lights, and power tools face higher overhead, which can lead to price increases or cutbacks. California’s gap with the U.S. average means these burdens are sharper inside the state. Lawmakers in 2025 and 2026 spoke more often about energy affordability, reflecting broad voter frustration with rising costs of living.
Home batteries sent 580 MW to California
A record 580 megawatts of energy came from home batteries on September 9. https://t.co/wNITj1TVB0
— Sascha (@Sascha_Roehrer) September 22, 2026
People across the political spectrum see a system that feels unaccountable. Some blame climate mandates and complex rules. Others point to utility spending and wildfire risks baked into bills. Most agree the typical customer has little say while paying more each year. The core facts here are not partisan: prices were far above the U.S. average, and state records show rates kept rising in 2025. That is why trust in institutions is strained.
What To Watch Next
State regulators maintain a public rate comparison tool so residents can check plans and locations. That can help some customers lower bills, but it does not change the statewide price level. The policy test ahead is whether leaders can reduce costs without sacrificing safety or reliability. Clearer accounting for wildfire risk, better-targeted aid for low-income households, and rate designs that align costs with use are all on the table. Results will show up on monthly bills.
Sources:
nypost.com, publicadvocates.cpuc.ca.gov, hoodline.com, sandiegouniontribune.com, centerforjobs.org
