In a move that underscores the ongoing turmoil in California’s energy sector, state regulators have slashed the profits that major utilities like PG&E Corp. and Edison International can earn on critical grid investments.
The California Public Utilities Commission (CPUC) made this decision to curb skyrocketing electricity bills, attempting to strike a balance between hardening the grid against wildfires and preventing further bill hikes for consumers.
Billions in infrastructure costs from utilities owned by PG&E, Edison, and Sempra are typically passed directly to households and businesses, exacerbating the state’s already burdensome energy expenses.
But this short-term fix ignores the root causes: decades of misguided policies under Governor Gavin Newsom and Democratic leadership that have driven up costs, stifled industry, and compromised energy reliability—potentially turning California into a national security liability.
The Broader Trend: Blue States and Sky-High Energy Prices
California’s woes are emblematic of a nationwide pattern in which Democrat-controlled states consistently face higher electricity and energy prices than their Republican counterparts. On average, blue states pay 37% more for electricity than red states, with data showing that 86% of continental U.S. states with prices above the national average are reliably Democratic.
This disparity stems from excessive taxes, stringent regulations, and aggressive pushes to phase out fossil fuels like oil and gas, which inflate costs without delivering proportional benefits.
In blue strongholds, renewable energy mandates have led to soaring rates, as utilities grapple with the intermittency and higher upfront costs of wind and solar, often relying on expensive natural gas backups or imports during shortages.
A state-by-state analysis reveals that Democratic governors oversee regions with elevated rates, driven by policies that prioritize environmental goals over affordability.
For instance, California and Hawaii top the charts, with residents paying over 20 cents per kilowatt-hour—far above the national average.
These increases aren’t isolated; they’ve become a political flashpoint, with U.S. power prices rising at the fastest pace in over a decade, hitting blue states hardest.
Such trends contribute to deindustrialization, as businesses flee high-cost environments, eroding economic bases and jobs.
Deindustrialization in Action: Companies Fleeing California’s Hostile Environment
Under Newsom’s watch, California’s combination of high energy costs, punitive taxes, and overregulation has triggered an exodus of major companies, accelerating deindustrialization and weakening the state’s industrial backbone. Iconic firms like Chevron have relocated their headquarters out of California, citing the burdensome regulatory landscape and escalating operational expenses.
Tesla, led by Elon Musk, followed suit, moving to Texas amid frustrations with California’s policies.
Oil giants like Phillips 66 have ceased or scaled back operations, while refineries shut down, pushing gas prices even higher.
This isn’t limited to energy firms. A wave of departures includes McKesson Corp., Oracle, CBRE, Charles Schwab, and Hewlett Packard Enterprise, all driven by the same factors: soaring costs of living and doing business, including energy bills that make manufacturing and operations unviable.
ExxonMobil and other oil companies have also reduced their footprints, as policies force out fossil fuel operations.
While Ford isn’t prominently listed in recent exits, the pattern holds for automotive and tech sectors, with Valero—though headquartered in Texas—facing similar pressures on any California assets due to the state’s anti-oil stance. Overall, these relocations hit state tax revenues and employment, as businesses seek friendlier climates in red states like Texas.
The result? A hollowing out of California’s economy, with lost jobs and reduced innovation in key sectors. This deindustrialization not only hampers growth but raises national security concerns: a weakened manufacturing base means greater reliance on foreign supply chains for critical goods, including energy technologies, at a time when global tensions demand domestic resilience.
History of California Power Blackouts
California has a long history of power blackouts, often tied to a mix of environmental factors, infrastructure challenges, policy decisions, and market dynamics. Major events highlight recurring issues like supply shortages, extreme weather, and wildfire risks. Below is a chronological overview of key incidents:1948 Blackouts: Following post-World War II growth and an extended drought, Northern California experienced a series of blackouts due to insufficient hydroelectric supply from low reservoir levels.
1996 Western Blackout: This regional event affected multiple Western states, including California. It was caused by inadequate maintenance of power lines and cost-cutting measures amid increasing energy industry competition, leading to cascading failures in the grid.
2000-2001 California Electricity Crisis: One of the most infamous periods, marked by widespread rolling blackouts affecting millions. Deregulation of the energy market in the late 1990s led to market manipulation (e.g., by Enron), skyrocketing wholesale prices, and supply shortages. On June 14, 2000, multiple rolling blackouts occurred due to power plant outages and extreme heat (nearly 40°C). In March 2001, the state suffered its first statewide rolling blackouts. The crisis resulted in billions in economic losses and prompted utility bankruptcies like PG&E’s.
2005 Blackout: A transmission line failure caused a significant outage, though details were limited in scale compared to prior crises.
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2019 Public Safety Power Shutoffs (PSPS): Utilities like PG&E implemented intentional blackouts to prevent wildfires, affecting 28.4 million customers across 25,281 events—a 23% increase in events and 50% jump in affected customers from 2018. These were driven by high wildfire risks from dry conditions and winds.
2020 Rolling Blackouts: Amid a massive heat storm (the worst since 2006), California experienced rolling outages due to surging demand, strained regional supply, and intermittent renewable energy sources. Factors included reduced hydroelectric output from drought and reliance on imports that fell short.
What Are Public Safety Power Shutoffs (PSPS)?
PSPS are temporary, intentional power outages by utilities to mitigate wildfire risks from electric infrastructure. Authorized by the California Public Utilities Commission (CPUC) since 2012 under Public Utilities Code Sections 451 and 399.2(a), they are a last-resort measure when strong winds, low humidity, or vegetation issues pose an imminent threat of igniting fires via power lines. While utility infrastructure causes less than 10% of reported wildfires, it accounts for about half of California’s most destructive ones (e.g., 2017 fires by PG&E, 2018 Woolsey Fire by Edison). Utilities must notify customers, public safety partners, and local governments in advance, provide post-event reports within 10 days, and mitigate impacts through Community Resource Centers (CRCs) and resilience planning for critical systems like water, transportation, and communications.
Regulations have evolved in phases: Phase 1 (2019) focused on notifications; Phase 2 (2020) on exercises and restoration; Phase 3 (2021) on outreach and mitigation. A 2022 compendium organizes guidelines, and a 2023 citation program enforces compliance with penalties (e.g., $2.3M fine on Edison and $1.75M on PG&E in 2024 for 2021 violations). In 2025, an interagency briefing assessed PSPS updates, and CPUC issued concerns to Southern California Edison (SCE) about program execution.
Recent Details: 2025 Blackouts and Shutoffs
As of December 20, 2025, California has seen a sharp rise in PSPS events, driven by below-average rainfall, prolonged high winds, and heightened fire risks. Key statistics and events:
Overall Increase: PSPS jumped 145% from 2024, affecting over 594,000 customers (up from 244,000). Triggers include red flag warnings, humidity below critical levels, sustained winds over 25 mph, and gusts.
Edison’s Record Shutoffs: Southern California Edison blacked out 534,000 customers in 2025—nearly four times the 137,000 in 2024. This followed the deadly Eaton Fire (January 2025, 19 deaths) under an Edison line, prompting lowered wind thresholds and expanded high-risk zones. Outages lasted up to 15 days, de-energizing over 10,000 critical facilities like hospitals. Despite billions invested in upgrades (e.g., insulated wires), Edison predicted 20-40% more outages.
Current Outage (December 20, 2025): A major PG&E blackout in San Francisco affected nearly 130,000 customers (one-third of the city’s PG&E users). It started on the West Side and spread to areas like Inner Sunset, Forest Hill, Presidio, Richmond, Sunset, Hayes Valley, parts of the Mission, and Alamo Square. A fire at a PG&E substation at 8th and Mission streets (extinguished by 6 p.m.) triggered some outages, with others unexplained. No restoration timeline was available by 5:30 p.m.
Broader trends show shutoffs colliding with grid reliability needs, exacerbated by climate goals and demand pressures.
Forcing Renewables: Why PG&E Chases Expensive Green Energy Despite the Costs
So why does PG&E continue pouring resources into renewables, even as they drive up costs for everyone? The answer lies in heavy-handed regulation. California’s Renewables Portfolio Standard (RPS) mandates that utilities like PG&E procure escalating shares of electricity from renewable sources: 60% by 2030 and 100% clean energy by 2045.
These requirements, enacted through laws like SB 350 and SB 100, force investor-owned utilities, electric service providers, and community aggregators to comply, regardless of expense.
Despite renewables often being more costly upfront—due to intermittency requiring backups and grid upgrades—utilities have no choice but to invest.
Critics argue this approach has backfired, locking in high-priced contracts from when solar and wind were pricier, contributing to rate hikes alongside wildfire mitigation efforts.
Proponents claim long-term savings, but the evidence points to immediate pain for consumers and businesses, with California’s rates among the nation’s highest.
This regulatory straitjacket exemplifies how Newsom’s policies prioritize ideology over practicality, risking blackouts and grid instability that could cascade into national vulnerabilities during crises.
A National Security Wake-Up Call
California’s energy fiasco isn’t just a state issue—it’s a national security risk. With frequent blackouts, dependence on intermittent renewables, and the flight of energy producers, the state jeopardizes U.S. energy independence. As deindustrialization spreads, America’s ability to produce essential goods domestically erodes, leaving us exposed to geopolitical threats. It’s time for a policy rethink: prioritize affordable, reliable energy over virtue-signaling mandates. Otherwise, Newsom’s California could drag the nation down with it.
If renewable wind and solar are so cheap, why can’t they make it work? And no wonder so many jobs and taxpayers are leaving the state. The California Energy Committees and leadership in the Governor’s office are not addressing the root cause of the problem.
Sources: reddit.com, reddit.com, insideclimatenews.org, cpuc.ca.gov, jkempenergy.com, energybadboys.substack.com.
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