We're No. 3: Hawaii and San Francisco pass San Diego for highest electricity prices in the nation - The San Diego Union-Tribune

We're No. 3: Hawaii and San Francisco pass San Diego for highest electricity prices in the nation - The San Diego Union-Tribune

We’re No. 3: Hawaii and San Francisco pass San Diego for highest electricity prices in the nation

The latest report from Bureau of Labor Statistics has San Diego in third place, but the rankings may change later this year

It may not lead to the popping of Champagne corks, but according to the most recent monthly data from the U.S. Bureau of Labor Statistics, two other metropolitan areas have passed San Diego for having the highest average electricity prices in the country.

The price per kilowatt-hour in urban Hawaii came to 42.8 cents in January, followed by San Francisco at 41.2 cents. San Diego had the third-highest average price at 40.1 cents per kilowatt-hour.

For more than a year, the San Diego metropolitan area has usually finished No. 1 in the monthly reports, with urban Hawaii wresting the top spot on occasion. But San Francisco has experienced a sharp increase recently.

Officials at the Bureau of Labor Statistics don’t specifically mention the utilities or energy providers when it posts that data but the surge in the average price per kilowatt-hour in the San Francisco area aligns with an increase in rates charged by Pacific Gas & Electric, the investor-owned utility whose service territory covers Northern and Central California.

The California Public Utilities Commission last November approved Pacific Gas & Electric’s general rate case that increased what the utility can spend and how much customers will be charged over a four-year period from 2023 to 2026. PG&E customers who are not on financial assistance programs pay 18 percent more per kilowatt-hour than they did in January 2023.

But San Diego’s average electricity price could return to the No. 1 spot later this year.

That’s because the Public Utilities Commission is in the midst of hearing the general rate for San Diego Gas & Electric.

SDG&E has requested increasing revenues by $3.6 billion for 2024 through 2027. If approved in full, the request would increase the electricity bill of a typical residential customers using 400 kilowatt-hours by $8.45 per month, according to documents filed with the commission, known as the CPUC for short.

The CPUC makes the final decision on whether to accept, reject or modify SDG&E’s request. A proposed decision from an administrative law judge is expected to be released in the second quarter, with a vote by the CPUC’s five commissioners likely coming shortly thereafter.

It remains to be seen if the rates the CPUC eventually approves will be enough to make San Diego’s per kilowatt-hour average higher than any other city in the country in the federal government’s monthly report.

Along with other energy prices, the Bureau of Labor Statistics keeps tabs on average electricity costs when it looks at the myriad of goods that go into determining the nation’s Consumer Price Index.

For electricity, the BLS looks at the averages of various sample prices, or quotes, from energy providers in a given city or region — while also considering typical consumption levels, based on information from the U.S. Energy Information Administration.

BLS analysts have seen sharp increases in electricity prices across the country, largely due to inflation and the financial effects the pandemic had on the economy.

From January 2020 to January 2024, average electricity prices per kilowatt-hour have gone up 30.5 percent nationwide.

“In general, energy prices are much more volatile than other prices,” said Steve Reed, economist for the Consumer Price Index program of the U.S. Department of Labor, Bureau of Labor Statistics. “So when they rise, they rise more sharply than other prices and they’ll have an outsize contribution in the overall price change.

“Gasoline is notably very volatile; natural gas is very volatile. Electricity is typically less volatile but it still rose sharply enough to make a big difference over the past few years.”

The BLS averages for electricity prices are higher than the per kilowatt-hour averages posted by utilities, the California Energy Commission and the CPUC because of a number of reasons, including the fact that BLS does not include customers enrolled in financial assistance programs such as California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) that can reduce a customer’s bills by as much as 35 percent.

Excluding those programs increases the overall average in the BLS calculation.

Of the 1.4 million electric meters in SDG&E’s service territory, about 25 percent of customer accounts are enrolled in CARE or FERA.

Average electricity prices

Price per kilowatt-hour by city, January 2024

1. Urban Hawaii 42.8 cents

2. San Francisco 41.2 cents

3. San Diego 40.1 cents

4. Boston 29.7 cents

5. Los Angeles 28.5 cents

Source: U.S. Bureau of Labor Statistics

Updates

5:33 p.m. Feb. 19, 2024: This story has been updated to show the percentage of SDG&E customer accounts enrolled in CARE and FERA programs.

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