What Chris Wright gets wrong about California

Capitol Weekly welcomes Opinions on California public policy or politics. Please read our guidelines for opinion pieces before submitting an Op-Ed.

OPINION – No state has been derided more by President Donald Trump and top officials in his administration than California. Last month Chris Wright, the secretary of the Department of Energy, added to that onslaught.

During an interview with David Gelles of The New York Times, Wright observed that “California had electricity prices only about 10 percent higher than Florida’s 20 years ago,” before the two states went in “different directions.” Florida invested heavily in electricity from natural gas generation – the “cheapest source of electricity” Wright proclaimed — while California officials ill-advisedly proceeded to “shut down” as many of its natural gas plants as they could in favor of renewable energy. “Today, California’s electricity prices are twice Florida’s.”

While Wright’s contentions are generally correct on their surface, a deeper dive reveals much more than his comments suggest. It’s true that, 20 years ago, California’s electricity rates were much closer to Florida’s (and the national average). Ironically, that was due primarily to the electricity contracts that Gov. Gray Davis’s administration signed in 2001 during state’s catastrophic electricity crisis. Though much maligned at the time, those contracts – many of which were renegotiated after the crisis – had locked in natural gas costs that were much cheaper than the market price after Hurricane Katrina seriously disrupted natural gas production and infrastructure at a key hub in southern Louisiana in 2005. Katrina helped set off a natural gas price-spike that lasted into 2009 and increased electricity prices in states that had not hedged their natural gas costs like California.

Then came the oil and gas “fracking revolution.” Fracking, which is a process that extracts oil and gas through the high-pressure injection of sand, water, and chemicals into a rock formation, began shortly after World War II but was not optimized until the 21^st century. Between 2007 and 2012 fracking helped increase U.S. shale gas production by more than 50 percent per year, and the price of natural gas dropped accordingly.

At that time, large-scale wind, and especially solar, were not cost competitive with combined-cycle natural gas plants. However, in the decade after the fracking revolution, innovations in wind and solar power drove costs down to parity with new gas plants, and just slightly more than that when combined with battery storage to cover renewable power intermittency.

Therefore, Wright is wrong in targeting the addition of “a lot of wind and solar” in California as the key factor in the state’s high electricity rates. Indeed, the cost of wholesale electricity, as recent research has shown, is not driving the higher cost in California, nor is the integration of renewable energy, new high-voltage transmission lines, or grid operations. In addition, it’s not, as Wright has contended, due to the fact that California imports a portion of its electricity from other states, which it has done for decades. Many of those imports are from cheap hydroelectric generation in the Pacific Northwest.

What, then, are the drivers of the higher rates? As is the case in many other regions of the country, utility infrastructure is old, especially electricity distribution lines and substations, and upgrades are expensive. Moreover, the demand for electricity is increasing rapidly in conjunction with the propagation of power-hungry data centers. And, yes, California’s climate-change mitigation policies do add to the cost, and wildfire destruction and grid “hardening” costs are unfortunately growing. Gov. Gavin Newsom and the legislature tried to grab the climate/wildfire policy bull by the horns last session, and the outcome of that effort (and those to follow) remains to be determined.

In his conversation with the NYT, Wright concluded his comments about California by maintaining that, due to the state’s expensive electricity, “no one manufactures anything in California anymore.” Though it is true that manufacturers in the Golden State have been relocating their operations since the 1970s, that trend spread to other states as much U.S. manufacturing moved to other countries. However, California still leads the nation in manufacturing, which, according to the Newsom Administration, accounts for “nearly 10% of the state’s GDP – more than any other state in the nation.”

Wright also complained to the NYT that “people have simplified views of energy that have been destructive.” That includes his own.

Kurt Schuparra is the author of How the California Electricity Crisis Generated a Green Wave: An Insider’s Account (Routledge, January 2025).