Why Does California Pay Arizona to Take Our Clean Energy?

My electricity rates are four times the national average. This summer I stared at my bill in disbelief. It was another $500 to Pacific Gas & Electric for a household of two.

For years I accepted high rates as the cost of living here. I told myself I was paying to help reduce emissions. I thought I was helping us lead the nation in clean energy. But electric bills are up over 100 percent in the last decade. The idea that I am paying a fair share is gone. It feels like robbery.

While utility monopolies bleed us dry, California squanders its own resources. Last year the sun was shining, but our grid was full on 179 separate days. We forced solar farms to idle. We lacked the batteries to store the power. We lacked the wires to move it.

The scale of this waste is staggering. In 2024 alone, California curtailed over 3.4 million megawatt-hours of wind and solar energy. That is enough electricity to power 500,000 California homes for an entire year. We paid to build this infrastructure. Then we threw the power away.

But for the power we don't switch off, the economics are even more insulting. We literally pay our neighbors to take it.

In 2024, our grid operators paid Arizona utilities $69 million to accept our excess electricity. We are paying to air condition Phoenix while millions of California families struggle to keep the lights on. It is a wealth transfer from our pockets to theirs. It is engineered by our failure to build infrastructure.

Compare this to Texas. They are not just beating us. They are embarrassing us. In 2024, Texas generated 169,000 gigawatt-hours of wind and solar energy compared to our 92,000. They produced nearly double the clean power we did.

Yet the price difference is humiliating. The average residential rate in Texas is roughly 16 cents per kilowatt-hour. Meanwhile, peak summer rates for PG&E customers now approach 60 cents. We are paying nearly four times what families in Texas pay for the same commodity.

How did they do it? They built the wires. Decades ago, Texas launched the CREZ project and rapidly built 3,600 miles of transmission lines to connect windy West Texas to their cities. They built the grid first. We built the solar farms and forgot the plug.

The betrayal hits closer to home too. While we pay Arizona to lower their bills, we have stopped paying our own residents for the solar energy they produce. This is the result of Net Energy Metering 3.0.

Under this new scheme, the math is predatory. If my neighbor generates excess solar at noon, the utility pays him pennies. Sometimes they pay less than one cent. At that exact second, they sell that same power to me for 60 cents per kilowatt-hour. They provide neither generation nor storage. They simply let it flow fifty feet down the wire and charge a 6,000% markup.

This was a regulatory bait-and-switch. The state crushed the market for installing solar on existing homes. Killing that demand wiped out 17,000 high-wage jobs. This decision rests with commissioners who are appointed by the Governor. They answer to him. They do not answer to the voters.

Integrating renewable energy is an engineering challenge. But these failures were not inevitable. As other states modernize, they must ensure the growing pains of this transition do not crush the residents paying the bills.

To an outsider, the fact that California pays Arizona $69 million to take our electricity might sound like a joke. But for the households struggling with soaring bills, nobody is laughing.