NEW STUDY: Californians Could Save More Than $2,000 Annually if Lawmakers Enacted Free-Market Energy Policies


If lawmakers acted to alleviate the unnecessary costs from state energy mandates, Californians living through these unprecedented times could save more than $2,000 annually – while still lowering emissions – finds a new study released today by the nonpartisan Pacific Research Institute and Power the Future.

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“With millions now unemployed or furloughed, state policymakers must act to help lower and middle-income Californians weather this economic storm,” said Dr. Wayne Winegarden, the study’s author.  “Reducing the unnecessary costs that Sacramento’s energy mandates impose is a great place to start and could save hard-working Californians more than $2,000 annually.”

The study finds that states that have embraced market-based energy policies have been more effective than California in reducing emissions.  Since 2007, emissions have fallen 14 percent nationwide versus 9.3 percent in California.

If policymakers acted to reduce the unique energy burdens they have imposed on families and businesses, Californians could see:

Lower Gas Prices:  Before the COVID-19 pandemic, California drivers paid a 37 percent premium for gasoline versus the national average.  With the collapse in gas prices, state drivers paid 55 percent more versus the national average (as of April 24).  Easing these mandates could, over time and depending on consumption, save Californians up to $9.6 billion annually (based on 2019 prices) or up to $11 billion (based on April 24 prices).

Lower Electricity Prices:  California energy mandates have, as of 2018, driven up residential electricity prices by 46 percent versus the national average, and business electricity prices by 69 percent.  Eliminating inefficiencies could generate annual average savings between $5.3 billion and $15.7 billion, depending on the scenario.

Increased Economic Growth:  Lower energy prices could bring a badly-needed boost to the economy and generate new job opportunities and tax revenues amidst a deep recession and severe state and local budget crises.  Eliminating these excessive costs could increase average annual real state GDP growth by up to 3.3 percent. Over 10 years, this could increase the size of California’s economy, adjusted for inflation, by up to $223.4 billion.

“Embracing free-market energy policies could put real money into the pockets of Californians who are struggling to make ends meet due to the coronavirus-fueled recession,” said Daniel Turner, Power the Future founder and executive director.  “It would be the equivalent of a major tax cut for hard-working Californians – while still enabling the state to achieve its lower emissions goals.”


Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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