California had the second-highest average retail electricity price among U.S. states in 2025, behind Hawaii, according to an analysis by the Institute for Energy Research and Always On Energy Research. The analysis put California’s average price at 27.63 cents per kilowatt-hour, compared with a national average of 13.63 cents and Hawaii’s 35.72 cents.
The figures are presented on Blue States, High Rates, a website launched by the two organizations and highlighted by the San Diego Union-Tribune. The site includes an interactive map of the 50 states, the District of Columbia and 10 regional transmission organizations. It also reports that California had the largest absolute increase among states since 2018, rising 29.9% after adjusting for inflation.
At the bottom of the list, North Dakota had the lowest average electricity price at 8.2 cents per kilowatt-hour, while Oklahoma came in at 9.5 cents per kilowatt-hour. The gap between California's rate and those states is stark enough that it has become the centerpiece of a new political fight over who — or what — is really to blame.
Who's Behind the Report, and What It Blames
The Blue States, High Rates analysis was produced jointly by the Institute for Energy Research and Always On Energy Research. Its authors say they evaluate states using six criteria and rely on government data, including information from the Energy Information Administration, according to the organizations’ report. The ranking describes differences in electricity prices; its explanations for those differences are the organizations’ policy analysis, not a finding by the Energy Information Administration.
The report links higher rates to a group of state policies and market conditions, including rooftop-solar compensation, renewable portfolio standards, carbon pricing or cap-and-trade programs, access to natural gas, data-center consumer protections and utility net-zero greenhouse-gas goals. It says California has adopted nearly all of the measures it criticizes. Tom Pyle, president of the Institute for Energy Research, also argued that electricity prices do not divide neatly along partisan lines, with many blue states above the national average and many red states below it.
Alex Stevens, manager of policy and communications at the Institute for Energy Research, said voluntary energy choices can affect a state's generation mix, transmission construction, and ultimately, customer bills. Amy Cooke, CEO of Always On Energy, put it more bluntly, saying bad energy policy leads to higher electricity rates.
Newsom's Office Fires Back
Newsom’s office challenged both the report’s conclusions and the groups’ independence. The governor said the Trump administration was acting as an oil and gas lobbyist and using what he called “fake research from a Koch-funded fossil-fuel front group,” as reported by the New York Post. The California Energy Commission referred questions about the report to the governor’s office rather than responding directly, according to the Union-Tribune’s reporting.
The governor’s criticism focused in part on the Institute for Energy Research’s ties to the broader Koch-funded conservative and free-market network. Tom Pyle, the institute’s president, was listed as a lobbyist for Koch Inc. from 2001 to 2008, a detail Newsom’s office cited in questioning the analysis’s independence.
U.S. Energy Secretary Chris Wright offered a different explanation for California's high costs, saying the state's oil and gas production and refinery capacity drove California energy prices to 40% higher than the national average, as noted by New York Post.
What California's Utilities Say Rates Have Actually Done
Separate utility data show that residential rates have risen substantially over the past decade. Pacific Gas & Electric’s average residential customer rate increased 69%, while San Diego Gas & Electric’s rose 97%. Southern California Edison recorded a 101% increase, the largest of the three.
The Public Advocates Office, an independent consumer arm of the California Public Utilities Commission, exists in part to scrutinize exactly these kinds of rate hikes on behalf of ratepayers. The office wasn't quoted taking a side on the new report, but its role underscores how central utility bills have become to California's political debates.
California's Clean Energy Push Complicates the Picture
What goes into a California electricity bill
The price of electricity reflects more than the cost of generating or purchasing power. According to the California Public Utilities Commission, rates also cover grid construction and maintenance, wildfire prevention and safety, public-purpose programs and utility operations. The commission says rooftop-solar program costs in 2024 shifted about $7 billion to customers without rooftop solar, adding a documented factor to the debate over residential bills.
The commission has also approved a billing structure that moves some fixed infrastructure costs into a separate monthly charge while reducing residential usage rates by 5 to 7 cents per kilowatt-hour. That change illustrates why a comparison based only on the per-kilowatt-hour rate may not capture every change a household sees on its bill.
California requires the state to obtain 100% of its electricity from carbon-free sources by 2045 or sooner. Supporters point to reductions in air pollution and smog, while critics of the state’s approach link some of the resulting costs to higher electricity rates.
California continues to lead the nation in electric-vehicle adoption, with zero-emission vehicles accounting for roughly one in five new vehicles sold in the state in the second quarter of 2026. On the grid side, utility-scale solar generation surpassed natural gas generation within the California Independent System Operator during the first five months of 2026. That agency manages the electric grid for about 80% of California, meaning shifts in its generation mix ripple across most of the state's power supply.
