[bryanlarsen]

It's not. California has the cheapest wholesale electricity prices in the country. It's the only place in the country with a wholesale rate below $100 / MWh, and California is way below $100.

https://cleantechnica.com/2026/05/30/california-lowest-whole...

Retail prices are of course super high in California, but that has nothing to do with generation.

[nonethewiser]

Actually, solar is a reason for both of these:

1. California wholesale prices are the lowest in the country

2. California consumer prices are the highest in the country

That's no coincidence. Solar credits in 1 and debits in 2, so to speak.

One reason wholesale electricity prices are so low is because there is an excess in solar. Rates go negative midday when demand is lower. That really brings down the average. But why are they negative? Oversupply. CAISO curtailed 3.4 million MWh in 2024 alone, up 29% from 2023, 93% of it solar. [0]

And how can CAISO deal with this?

Spend more money on the grid. Batteries and transmission infrastructure. The high transmission and delivery costs, which you identified as the reason for the disconnect, is partially the function of so much solar generation. You can't just separate the two.

Also, that Clean Technica source is shit. It's a solar advocacy group. They have completely withheld important context. And a simple average of prices is dumb.

Its not even clear if the price is from traded volume or listed price. Mark Jacobson (underlying BlueSky post) states its from the EIA but the EIA has both - trade price and list price by hour. Is it a simple average that includes a negative price that may not actually be traded? This would artificially lower the wholesale price.

A better metric would be load weighted price. What did energy cost when people consumed it?

[0] https://www.eia.gov/todayinenergy/detail.php?id=65364

[bryanlarsen]

The load weighted price would be lower. If they averaged across 24 hours, but load is higher in the daytime when the prices are lower.

> The high transmission and delivery costs, which you identified as the reason for the disconnect, is partially the function of so much solar generation

That correlation is very low. All new supply requires new grid connections, but that's the same whether it is natgas or solar. And generation interconnect is a fraction of grid costs -- last mile is the bulk.

P.S. your graph is also highly misleading since it doesn't include 2025. Battery supply increased substantially in 2025, and curtailment dropped in 2025.

[nonethewiser]

It's not my graph. It's the U.S. Energy Information Administration. There is no more official source.

[verdverm]

Why is there such a disconnect?

[epistasis]

Transmission and distribution costs: i.e. the grid.

California is a massive state, has very rugged terrain, and there's a ton of deferred maintenance on transmission lines that are more than 50 years old, that are at huge risk of causing massive wildfires that destroy entire towns.

This has been terribly mismanaged, because like most places with regulated monopoly utilities, the regulatory body is opaque and not very responsive to the needs of the public.

The utility doesn't make money on electricity generation costs, but it does get to take a fixed rate of profit from grid infrastructure costs. So the obvious game for a for-profit regulated monopoly utility is to jack up the grid costs as high as possible, try to snow the regulators to possible cheaper alternatives, and rake in more money.

I remember one case where PG&E got approval to charge for grid maintenance, spent hundreds of millions, had ~$100M leftover, then declared "oh we did it cheaper than we expected, executive bonuses all around the C-suite with the extra!" And then we had multi-billion dollar wildfires the following year.

Utilities are not normal businesses, they make more money by increasing their input costs. (See also the US healthcare system where incentives are similarly perverse... Insurance company profits are capped at a fixe percentage of health care expenditures, so the route to more profit is to increase health care expenditures.)

Of my decades in California, there's been a single gubernatorial candidate with deep knowledge of the grid and how to fix the regulatory structure, and it's the governor who actually appoints people to the regulatory board of the utilities, so the governor and their appointees have the power to fix this. That gubernatorial candidate was Tom Steyer, and he had/has fantastic plans, but I fear he just lost the primary:

https://www.volts.wtf/p/tom-steyer-wants-to-be-californias

[nonethewiser]

Solar is a contributing factor in the grid costs though. You cant say solar generation makes wholesale prices cheaper then completely exclude how an oversupply of solar and tons of curtailment drives grid costs up.

[epistasis]

No it really isn't much of a contributor to the current grid costs, which are nearly all maintenance and mismanagent.

Especially residential solar, which greatly lessens the need for distribution and transmission max capacity, therefore T&D costs, yet this is an area where the utility has been able to present very biased analyses that snow the regulators, because anything that lessens T&D need means that the utility makes less money and must be stopped.

There is not tons of curtailment of solar, it's a solved problem. Storage is now super super cheap. Grid maintenant is super expensive.

We have all the accounting right in front of us, and the answers are clear.

[nonethewiser]

It is a major factor. There is ton of curtailment which they are trying to address.

[zahlman]

> I remember one case where PG&E got approval to charge for grid maintenance, spent hundreds of millions, had ~$100M leftover, then declared "oh we did it cheaper than we expected, executive bonuses all around the C-suite with the extra!" And then we had multi-billion dollar wildfires the following year.

... Is PG&E also expected to do the forestry management? Or what other maintenance could they have done with the money?