Navigant Consulting Report
A whitepaper from Navigant Consulting found that energy costs are expected to increase sharply in the next several years. The complexity associated with simultaneously implementing several transformative policies and regulations within an already complex and increasingly costly energy landscape in California can lead to unintended consequences.
- Renewable Portfolio Standard: The 33% RPS requirement is increasing rates and presenting reliability challenges as utilities attempt to phase in renewable energy to portfolios. Many of the costs associated with RPS are not yet reflected in rates.
- Cap and Trade: Implementation of AB 32 has added to electricity rates attributable to the “carbon component” of energy costs. The impact of these carbon rate increases on electricity bills will be felt disproportionately by end consumers.
- Low Carbon Fuel Standard: The California Air Resources Board’s assumptions that full compliance with the LCFS will result in negligible rate increases have been called into question by a number of detailed studies. There is also about the potential supply of alternative fuels and associated infrastructure needed for compliance.
High rates in California
- California’s electricity and gas prices are higher than the U.S. average and those in neighboring states.
- The difference in energy costs between California and its neighboring states impacts business, job creation and local communities.