The answer depends on who provides your power.
If you are served by PG&E, Southern California Edison, or SDG&E, your regulator is the California Public Utilities Commission (CPUC). It consists of five commissioners appointed by the governor to six-year terms. The CPUC approves what investor-owned utilities may charge and what additional costs of service they may build into rates, including wildfire hardening, transmission, and rooftop solar compensation.
If you are served by a municipal utility, such as LADWP or SMUD, your electricity service falls outside CPUC jurisdiction. Your rates are set by local boards and are generally lower, which fuels debate regarding CPUC-regulated electricity providers.
Who is responsible for gasoline prices?
No single regulator has jurisdiction over gasoline, which is why the answer varies.
On the market side, a handful of in-state refineries produce fuel that meets California’s state-specific standards. Notably, two in-state refineries recently closed.
In addition, state excise taxes, cap-and-invest compliance costs, and the low carbon fuel standard (LCFS) are all embedded in pump prices. These are set by the Legislature and the California Air Resources Board (CARB).
CARB’s board members are mostly appointed by the governor and confirmed by the California State Senate, with a few additional board positions reserved for legislative appointment. CARB’s cost estimates are contested, and the Legislature’s oversight of those embedded costs is the central accountability question in the gas-price debate.
What do CARB, the CEC, and CAISO each do?
CARB sets climate- and air-quality rules, including vehicle standards, the low carbon fuel standard, and cap-and-invest emissions requirements. Its decisions affect fuel prices and compliance costs statewide.
The California Energy Commission (CEC) forecasts energy demand, licenses thermal power plants, and sets building energy efficiency requirements.
The California Independent System Operator (CAISO) operates the wholesale electricity grid and energy transmission planning for most of the state, balancing supply versus demand in real time. CAISO’s planning of transmission lines is the intended target of 2026’s Proposition 45: Expedited Environmental Review Process for Certain Projects Initiative.
When you also account for the layer of federal oversight by the Federal Energy Regulatory Commission (FERC), which has regulatory power over wholesale energy markets and interstate transmission, the question of “Who is in charge of energy?” has at least five answers even before it reaches your city’s electrical grid.
Why are California electricity rates among the nation’s highest?
The costs imposed by multiple layers of administration and regulation stack up, especially when each layer is supported by a vocal constituency arguing for the regulator to do more. These layers include:
- Wildfire liabilities and grid hardening, including the AB 1054 framework socializing some costs.
- The clean-energy buildout mandated by SB 100, which mandates that utilities provide electricity from only renewable or zero-carbon resources by 2045.
- State mandates that subsidize rooftop solar, which shift project costs onto other customers through increased transmission fees and utility profits, as approved by the CPUC.
Reasonable experts will apportion blame differently, but no serious analysis finds a single villain.
In conclusion, most of the increases to energy cost were approved deliberately, by appointed bodies, but in proceedings which few voters pay attention to.
What should a voter take away?
Energy prices are mostly policy outputs, not market accidents. In many cases these decisions are made by policymakers who are appointed rather than elected.
Ongoing questions for reform regard whether CARB’s embedded fuel costs should require legislative votes, whether CPUC decisions should face more direct oversight, and whether the state’s mandate-and-litigate model delivers the intended energy buildout that would satisfy its climate policy intentions.
