California’s electricity crisis is crushing consumers. The Golden State’s electricity rates are now the second highest in the nation and double the country’s average. Between 2000 and 2024, California’s residential electricity rates rose faster than inflation, exceeding U.S. average real price increases by more than 50%. These prices strain household budgets and threaten the state’s electrification path to a climate-neutral economy.

More than 80% of Californians rank lowering bills as a top or important priority for state leaders, and the state’s elected officials have a duty to address these intertwined problems for their constituents. In response, GridLab and Energy Innovation convened a workshop of more than 20 California electricity experts to diagnose what’s causing rising costs and develop actionable policy solutions that address the scale of the challenge. This report is informed but not limited by that workshop; it defines a policy roadmap to stabilize and ultimately reduce electricity rates for California’s incoming governor, the California Public Utilities Commission (CPUC), the legislature, utilities, and other stakeholders, that will allow California to sustain its clean energy leadership.

There is no silver bullet to drive down rates, but any path forward must address the underlying structures which stakeholders agree led to California’s sky-high rates. These factors include falling system utilization, misaligned utility incentives, complex and overlapping regulatory and legislative mandates, opaque cost tracking and oversight mechanisms, and inadequate focus on rates that would incentivize electrification and flexible demand. All of these problems sit alongside the difficult reality of wildfire risk that utilities are currently spending their way out of. Unfortunately, the utilities’ financial health and Californians’ safety depend on effective mitigation, but utilities cannot do it efficiently or effectively without coordinated action across local and state governments.

While California’s problems are complex, there are clear, actionable solutions to stabilize and reduce California’s electricity rates. This initiative’s report and accompanying fact sheet explore the full list of durable policy recommendations.