Bay Area Electricity Bills Are Some of the Highest. Where Does Your Money Go?

For three days last December, when Kenya Brown’s youngest four kids weren’t in school, they spent their time at her oldest son’s apartment. They did their homework, charged their phones, showered and had dinner.

The children returned to the family home only to sleep. Instead of the normal chatter of TV shows and the sparkle of hall lights, the house was dark and cold. Their utilities had been shut off — no heat, no lights, no hot water, no gas for cooking; Brown hadn’t paid the bill in months.

Brown’s bills are like many others in California: high, especially in recent years. Her electricity and gas bills regularly top $500 a month for the one-story home she’s rented for the past ten years in the East Bay city of Bay Point.

The money from her job at the time as a full-time cashier at Walmart paid for rent, her car loan, and food.

“I have to decide: am I going to pay this bill or am I gonna eat food? And I choose food,” Brown said, noting that it’s hard to keep up with the appetites of four growing kids, even with federal food assistance and trips to the food bank.

Brown has tried cutting back on electricity use. She’s asked her kids to turn down the heat and turn off lights and TVs. She weatherized her home, taking advantage of a free federal program meant to reduce utility costs. She didn’t notice a difference in her bottom line, though.

“It’s never been this high before,” Brown said.

Brown’s son’s teacher got wind of the power disconnection in the family’s home. She set up a GoFundMe, which raised $3000 to restore electricity and gas, and pay past-due bills.

California’s electricity rates are the second-highest in the country after Hawaii, and a majority of Californians say the expense is a top concern. The burden is even higher for low-income families: according to the Public Policy Institute of California, low-income households pay a much larger portion of their income on electricity bills compared to households earning more.

Staff at 211 Bay Area, a United Way hotline that refers people to support for food, housing and more, said they fielded more than 6000 calls about utility assistance from January to October this year, compared to around 2000 over that same time period in 2020.

“Utility assistance is in our top three most requested needs,” said Clare Margason, 211 Bay Area’s senior director.

What’s in a bill?

It’s no shocker that electricity is expensive in California, but what exactly are you paying for? Glancing at your bill will likely leave you more confused: there is a dizzying array of charges, credits, adjustments, taxes and more.

KQED took Brown’s bill to a group of experts to decode it, and in doing so found that her bill included a miscalculation: Brown qualifies for CARE, a program meant to help offset energy costs for low-income Californians, but she is only getting that discount on what she pays for gas, not electricity.

PG&E told KQED in a statement that the company fixed the error and Brown will receive a credit on her next bill.

Brown did not think to question her bills, however, because each month she sees a CARE discount, and high utility bills seem to be the norm when she talks to family and friends.

There are real barriers to seeking help for high utility bills, said Constance Slider Pierre, who oversees The Utility Reform Network’s consumer hotline. Barriers include speaking limited English, confusion over how to read bills, and difficulty reaching customer service representatives, Slider Pierre said.

For this story, KQED spoke to experts at UC Berkeley, UC Santa Barbara, the Natural Resources Defense Council, The Utility Reform Network and California’s largest utility, PG&E.

“It’s worth pointing out that it takes multiple experts, maybe some PhDs, and a bunch of phone calls to understand one electricity bill in California,” Mohit Chhabra of the Natural Resources Defense Council said of the long list of experts KQED spoke to for this story. “If you want people to actually understand [their bills], simplifying the front end would be useful.”

We looked at Brown’s bill to understand what she and others pay for and what those charges mean.

Brown spent $576.37 on electricity in September.

Energy Generation. 25-45%, Brown paid $173.93

This is the cost of producing energy: from sources like natural gas, solar, wind, hydro and nuclear, and the upkeep of these power plants. Utilities generate some of their own energy, but buy the majority of it from third parties.

In Brown’s case, her energy comes from MCE, a community power provider that serves some North and East Bay counties. Community choice aggregators like MCE first sprouted up in 2010 as an alternative to investor-owned utilities for buying or generating energy. MCE still relies on PG&E’s poles and wires, so Brown pays a portion of her bill to MCE for electricity generation, and another to PG&E to deliver that electricity.

The cost of energy generation is similar, whether you’re enrolled in a community power provider or PG&E.

Electric Delivery, Brown paid $402.44

This is the cost of moving energy from where it’s created at a power plant or a solar farm to your home. There are tons of aspects to this system, including transmission and distribution.

Transmission. 7-12%, Brown paid $50.03 

The transmission system is like a superhighway for electrons. These are the huge towers and high voltage wires you see while driving along the actual highway.

Distribution. 38-45%, Brown paid $292.63

The distribution system is like all the roads on which you travel after you exit the highway: main thoroughfares, residential streets, even your driveway. These are the poles and wires that connect to your home.

Maintaining both transmission and distribution systems means Californians pay utilities for a variety of work meant to prevent wildfires, like cutting trees along power lines, or covering or undergrounding wires.

Wildfire expenses more than doubled between 2023 and 2024, making up almost a quarter of the total revenue PG&E collected from customers.

Wildfire costs include both paying for past disasters – rebuilding and paying claims to people harmed – and preparing the grid for future calamities.

Severin Borenstein, a professor of energy and economics at UC Berkeley, said 30 years ago, customers would pay just a couple of cents a month for distribution in their electricity bill.

“It was basically putting up wires around neighborhoods and then maintaining them,” Borenstein said. “Now that [cost] is many, many times higher because almost all of the fires that have been started are distribution level fires.”

Climate change has greatly increased the risks of out-of-control fires caused by falling trees or failing poles.

“We’re spending an enormous amount of money to avoid that risk,” Borenstein said.

Public Purpose Programs. 5-6%, Brown paid $33.57

This fee funds programs that help offset electricity costs for low-income Californians. For example, the CARE program provides at least a 20% discount on gas and electricity rates for those who qualify. It also includes energy efficiency programs, like the one Kenya Brown used to help weatherize her home.

How much money goes to PG&E shareholders? 

PG&E said less than 1% of a typical residential bill is paid out to shareholders as dividends — cash payments the company gives to people who own PG&E stock.

For Kenya Brown’s $648.04 gas and electric bill, she paid under $6.48 to PG&E shareholders.