Tom Steyer wants to make California electricity cheaper by doing what every insurgent gubernatorial candidate does: break the “monopoly,” add competition, and let technology do the rest. It’s a clean pitch—especially in a state where everything costs more, including what you need to run the air conditioner during fire season.

Steyer’s pitch is compelling: elect him and he’ll slash voters’ power bills by at least 25%, revise state rules to allow for retail competition and for property owners to generate and sell power to the public themselves.

The problem is that California’s power bills aren’t high mainly because the state lacks competition. They’re high because of a cluster of added fees — for wildfire mitigation and liabilities, major distribution-grid upgrades, and a stack of state-mandated programs financed through utility charges.

“Other states don't have legal monopolies. We have a legal monopoly, and so you can't compete,” Steyer, a cleantech investor and Democratic candidate for governor, told Forbes. “We need to introduce localized competition, making it possible for people to generate and do microgrids.”

He also thinks the state can squeeze more electricity out of existing powerlines with better tools, potentially a faster, cheaper option than heavy investment in grid upgrades. “The grid is maybe 35% efficient. And that's because of a whole bunch of rules designed to protect the grid for the highest one hour of the year, so we don't get a brownout or a blackout,” Steyer said. With some help from new real-time information technology and AI, he’s betting California could raise that to 60%. “That means you just found immense capacity on the grid, not for free, but at a fraction of the cost.”

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California residents are paying an average of 30.3 cents a kilowatt-hour, far above the national average of 17.45 cents/kWh, according to the Energy Information Administration. In Texas, which allows more competition in much of the state, residents pay just 15.7 cents. Only Hawaii, at 39.79 cents/kWh, charges its residents more.

“The biggest piece is energy distribution. Those costs have skyrocketed in the last decade, primarily due to investments being made to prevent wildfires and to pay for wildfires.”

“The biggest piece is energy distribution. Those costs have skyrocketed in the last........

© Forbes