The Brief

NPR's series Cost of Living: The Price We Pay is examining what's driving price increases and how people are coping after years of stubborn inflation. How are higher prices changing the way you live? Fill out this form to share your story with NPR.

What's the item?
Electricity

How has the price changed since before the pandemic?
Electricity prices have jumped 40% since February 2020, according to the Bureau of Labor Statistics. That's a bigger jump than the 26% increase in the overall cost of living.

Why have prices gone up?
Demand for electricity has increased in recent years, partly because of all of the new data centers that are popping up to serve the artificial intelligence boom. Some old power plants have been retired, and utilities are scrambling to add new electric generation, while also making the power grid more resilient. Also, the price of natural gas used to generate electricity has increased.

Now that fall is here, Kathy Letourneau no longer has to run her air conditioner around the clock. But the Fort Walton Beach, Fla., resident also relies on electric heat to stay warm in the winter. Letourneau, who is 71, says her power bills run between $200 and $300 a month, all year round.

"When you're living on a fixed income, you feel it," she says. "There have been a few times we couldn't afford it. We've had our lights turned off before."

Residential electric rates in Florida have jumped more than 13% over the last year, according to the Energy Department. Letourneau and her husband are bracing for another increase next year.

"Florida is a lot of retired people on Social Security," Letourneau says. "I mean, it's hard."

Across the country, residential electric rates are climbing twice as fast as the overall rate of inflation. The high price of power became a flash point in this week's elections in both New Jersey and Virginia.

The rising costs are partly driven by the price of natural gas, used to generate electricity. Natural gas prices fluctuate with the weather and with the level of gas exports, which have been climbing.

Electricity demand has also soared

Electric bills are also going up because of increased power demand.

For the first two decades of this century, demand for electricity barely budged. But in the last few years, people and businesses have been plugging in more and more. The Energy Department expects demand to grow 2.2% this year and 2.4% next year.

"There's automobiles that have gone from gasoline-powered to electric vehicles," says Drew Maloney, president of the Edison Electric Institute, which represents power companies around the country. "You're also seeing stoves being replaced from gas to electric. And the AI data center growth."

Utilities are hustling to meet that demand by replacing old power plants that have gone out of service while adding new generating capacity from wind, solar, and natural gas.

"We support developing all energy sources," Maloney says. "We need as many electrons on the grid as possible to help keep the grid reliable and costs low."

Who pays for the electricity needed for AI?

Utilities say building new power supplies along with a more resilient electric grid will cost more than a trillion dollars over the next five years. The question facing regulators is, who's going to pay for that.

In theory, the new data centers springing up to support the artificial intelligence boom should cover their own power costs and at least a bit more, potentially lowering bills for nearby residential customers.

"That doesn't seem that hard to do," says Severin Borenstein, faculty director of the Energy Institute at U.C. Berkeley's Haas School of Business. "But you'd be surprised how many politicians and regulators say, 'Well, this is an economic development opportunity. We should give them a great rate.' And in their enthusiasm, they'll end up charging rates that don't even cover the incremental cost."

If data centers are given a break on prices, residential customers could end up saddled with some of their costs. Across the country, residential customers typically pay higher rates than commercial or industrial power users, according to the Energy Department.

There are ways to reduce the nation's overall power bill, by adjusting when and where electricity is consumed. By far, the most expensive time to use power is when demand is at its peak — typically on the hottest days of summer when air conditioners are working hardest.

"If you could get these data centers to get off the grid, say 50-60 hours a year, they really wouldn't create any cost pressure at all," Borenstein says.

Data centers could do that by temporarily switching to backup power, or re-routing their data traffic to cooler parts of the country. Borenstein suggests regulators could require that. Electric vehicle owners also have considerable flexibility in deciding when to plug in and charge.

While demand for electricity is growing faster now than it was a few years ago, that increase is hardly unprecedented. Borenstein says electric demand grew more than twice as fast in the 1960s. That's when air conditioning was going mainstream, making it comfortable for retirees like Letourneau to live in places like Florida.
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Voters in November will decide whether to make a sales tax increase, geared toward funding public safety, maintenance and youth programs, permanent.

In 2018, voters approved a 1.5% sales tax increase — dubbed Measure X. That rate was designed to decrease to 1% in 2029 before being eliminated in 2039. The tax provides more than $80 million in annual revenue. City officials said the tax dollars account for about 20% of the general fund.

LAist breaks down where those dollars have gone so far.

How much money has come in through the tax? 

The city has received nearly $500 million from the sales tax so far.

A large portion of the Measure X money — $166 million — went to “unrestricted” general revenue purposes. This is anything from building repairs and city events to arts programs and City Council aides.

The second-highest expense — sitting at nearly $123 million — went to public safety, which includes retaining firefighters and police officers.

Nearly $69 million falls under the third category called “Maintain Effective 9-1-1 Response,” and most of those dollars went to the Santa Ana Police Department.

About $57 million went toward addressing homelessness since 2019. Records show a large share of that money went to police response — about $48 million.

In the other categories, $14 million went to fix streets, $39 million to park maintenance and $12 million went to youth services.

You can find the full breakdown of Measure X dollars here.

General spending is the largest pot of money

Tim Johnson, chair of the Measure X Citizen Oversight Committee, said the tricky part of the sales tax is that it is general-purpose, unrestricted revenue, meaning the city can spend it however it sees best for residents.

“I don't know that all the voters understood that this truly is unrestricted revenue that's coming in though, and that's kind of probably the biggest issue,” Johnson told LAist. “The city, I think, is trying to do our best to let our residents know where the dollars are being spent. But it's a virtually impossible task to be able to track every single dollar that comes in and where it exactly is going because of this unrestricted general revenue.”

It’s especially an issue considering the ballot language led with firefighters, police, homelessness and youth — all categories that mean a lot to Santa Ana residents, Johnson added.

“That is the category that gets the bulk of this funding, and yet it was at probably the back end of most of our voters' [minds] when they were casting their ballot,” Johnson said. “And probably the same thing with the upcoming election. It's important to understand that this truly is unrestricted revenue.”

With this tax, he said, residents are putting a lot of trust in the City Council, city manager and finance department to be good fiduciaries of these funds.

“We're not only voting for the additional tax on ourselves, but we're voting to put our trust in the City Council that they're going to spend it wisely,” Johnson added.

Why it matters

Before the sales tax was approved in 2018, the city adopted a budget that required a $10 million dip in its reserves to maintain city services. At the time, the city was facing a growing structural deficit that, if ignored, could have ballooned to more than $30 million by 2020, according to city records.

Despite revenue generated from Measure X, the city has faced multimillion-dollar budget deficits in recent years.

This year, the city managed to close a $13 million deficit by making cuts across several departments, including police, public works, and parks and recreation.

Without the sales tax dollars, officials have warned that the city will have deeper cuts to make.

“The residents of Santa Ana have come to expect a certain level of service from the city that is largely dependent on Measure X dollars,” Mai Do, a Santa Ana resident and member of the Measure X Citizen Oversight Committee, told LAist. “So many of the services that we depend on and enjoy, including community improvements to parks and also library personnel, are funded through Measure X.”

Other cities, including Orange and San Clemente, are looking to voters for approval of their own sales tax measures to help bolster city coffers. Do said Santa Ana luckily is not panicking as much as other cities.

“Folks are expecting more from their local governments … in terms of providing services to everyone,” Do said. “When there's an expectation of having these services, cities need to be able to figure out how to actually meet that demand.”

What’s next? 

Santa Ana voters will be asked in November to make the sales tax permanent. If the measure fails, the tax rate will drop to 1% in 2029 as originally planned, meaning the city could miss out on about $30 million in revenue.

An astronaut who made news piloting a NASA spacecraft around the moon earlier this year is now planting his feet on the ground on the Central Coast.

Victor Glover is joining the executive staff at his alma mater, Cal Poly San Luis Obispo. He’ll serve as an advisor to the university’s president and help shape research programs.

Glover graduated from Cal Poly in 1999 with an engineering degree. He was also on the football and wrestling teams.

Glover also met his wife, Dionna, while attending the school. All four of their daughters graduated from, or are currently attending, Cal Poly.

Glover was a Navy fighter pilot who became an important part of America’s modern-day space program. He lived on the International Space Station for 168 days, flew the SpaceX Crew Dragon, and piloted NASA’s Artemis II lunar orbit mission earlier this year.

Glover recently retired from the Navy and NASA.

This story was originally published by CalMatters. Sign up for their newsletters.

California regulators ordered Health Net to fix how it’s handling the termination of assisted living services for low-income residents after the insurer’s abrupt decision left patients and providers scrambling. The state’s corrective action plan requires Health Net to extend services for all members until the end of the year, rather than stopping some as soon as October.

Health Net, one of the largest Medicaid insurers in the country, notified providers several months ago that it was ending its assisted living and home care services contracts. The services are optional under Medi-Cal — California’s version of Medicaid — meaning an insurer can decide annually whether it will continue coverage. Providers and family members said they got little or no warning, leaving them confused and panicked about finding other arrangements.

In an August letter to Health Net, the Department of Health Care Services cited eight deficiencies in the insurer’s handling of the change, including failure to submit transition plans for members, failure to move members to other medically appropriate care, and denying services to members. Regulators wrote that violations “jeopardize member safety, disrupt continuity of care, and endanger medically vulnerable members.”

If Health Net does not extend benefits and create individualized transition plans for each affected member, the state may fine them $25,000 per member per day of violation, the letter states.

Advocates and providers estimate about 3,500 Medi-Cal patients rely on Health Net to pay for assisted living costs. Most are elderly, and many have cognitive issues like dementia. Health Net operates Medi-Cal plans in 10 counties: Amador, Calaveras, Fresno, Inyo, Los Angeles, Mono, Sacramento, San Joaquin, Stanislaus and Tulare.

In a statement to CalMatters, Health Net spokesperson Beatriz Lopez said the company still plans to end the services next year, but will now cover all members through the end of the year.

“Health Net and DHCS share a commitment to advancing the health and well-being of Medi-Cal members,” Lopez said.

Health Net has previously told CalMatters the assisted living benefit “has not led to better care” in terms of fewer emergency room visits or days hospitalized. The benefit is part of CalAIM, a broad state initiative to improve Medi-Cal services and save money by stabilizing high-cost users who frequently end up in emergency rooms. Lopez said Health Net would continue analyzing data and supporting services that result in better health outcomes.

Providers confirmed to CalMatters that their contracts would run through the end of the year.

Thousands still face January deadline

Hagar Dickman, director of long-term services and supports at Justice In Aging, said the state’s corrective action plan resolves the immediate crisis but fails to address the long-term problem: “Thousands of older Californians are still set to lose their housing on January 1st.”

Allowing health insurers to cancel housing-related benefits creates problems, Dickman said, because most assisted living residents have no other home to return to. Additionally, the Department of Health Care Services has stated that if a member moves to another insurer that still covers assisted living, continuity of care protections would no longer apply, meaning the new insurer might not approve the member's assisted living costs.

"It’s disingenuous to say there are protections and then say the protections don’t apply,” Dickman said. "So the option is skilled nursing or homelessness.”

Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, agreed that state protections are inadequate.

“It doesn’t sound like we found a solution to help pay for these people to remain where they are,” Shatara said.

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

This story first appeared on Long Beach Post.

Long Beach will make a slew of parking tickets more expensive and charge higher cannabis taxes to avoid cutting library hours and some specialized police officers. The last-minute change, proposed hours before a City Council vote, reversed a controversial plan city leaders laid out in June to lay off nearly a dozen library employees to help balance its budget.

Facing a $58 million shortfall, the city will still lay off roughly 180 other employees and cut hundreds more vacant positions. But it will spare library staffing and hours, after the original budget — which would have cut Monday hours at five city libraries, the only ones open that day — prompted fierce public backlash.

Long Beach City Council members voted 7 to 2 on Tuesday for the revised $4-billion city budget.

Councilmember Cindy Allen, who objected, called the increased parking fines “predatory fees,” arguing that library funding shouldn’t come at the expense of unfairly targeting people already struggling financially. Allen represents a district that includes the densely populated Alamitos Beach and Rose Park neighborhoods, where parking is already scarce. “We don’t have driveways,” she said.

Kristina Duggan, who represents southeast Long Beach neighborhoods like Belmont Shore, also voted against the budget because it cut Fire Engine 14 near Colorado Lagoon, a move that’s expected to save $3.88 million but drive up response times.

Duggan and Allen both tried but failed to delay the budget vote, with Allen saying the changes were put together in a “slapdash manner” without a chance for the public to weigh in.

She warned her colleagues before the vote that if they approved the budget “without substantial discussion” then they were “complicit in rubber-stamping” a plan that would “affect people’s livelihoods.”

Under the plan, 18 categories of parking citations — including for blocking bike lanes, hydrants, double parking and crosswalks — will rise to a flat $100, up from $74 or $90, to generate $1.5 million. Street sweeping tickets would also get a $5 bump, to $80 — a difference that raises $700,000 in revenue.

In the last fiscal year, which ran Oct. 1 to Sept. 30, the city issued more than 100,000 parking citations and 201,000 street-sweeping tickets, Public Works Director Josh Hickman said. More than a fifth of street-sweeping tickets were written in Allen’s district, and more than half of all parking tickets citywide were issued in the first two council districts, which include downtown and Alamitos Beach.

John Edmond, a local lobbyist who sits on the board for the Library Foundation and spoke in support of the plan, said the $100 rates are on par with cities like San Francisco ($108), Oakland ($110), San Diego ($117). He argued this applies to the “most serious parking violations.”

“We can’t say we’re serious about pedestrian and bicycle safety without accountability,” he said.

The budget also raises the city’s cannabis retail tax from 7% to 8% and increases the cultivation tax to more than $15 per square foot, changes expected to bring in roughly $1.15 million.

The proposals came from Councilmember Joni Ricks-Oddie, who chairs the city’s Budget Oversight Committee. Ricks-Oddie said earlier Tuesday she had spent weeks preparing these and dozens of other recommendations in concert with city staff, continuously updating them to accommodate new requests that came in from the public and fellow council members.

“If we can’t do this … then we can’t fund the libraries,” Ricks-Oddie said in response to Allen’s concerns about pricier parking citations. “If we reject that, we’re saying no to our library hours on a Monday.”

The budget also sets aside $1 million for the city’s immigration legal defense fund, the Long Beach Justice Fund. That’s well short of the $2.2 million immigration attorneys and local immigrant rights groups say is needed to sustain it amid rising caseloads. Gina Amato Lough of Public Counsel’s Immigrants’ Rights Project said “the need has never been greater,” citing prolonged detentions, warrantless raids and difficulty accessing counsel.

Since Public Counsel’s $919,000, one-year contract to provide legal services began in November, the group has taken on more than 55 consultations and 46 full-scope cases through the Justice Fund.

After hearing repeated pleas for more money Tuesday, Allen proposed reallocating all the funding for Long Beach’s new Vibe City marketing campaign — which some have derided as a waste of money — to the Justice Fund. She was quickly shot down, with a representative from the City Attorney’s office saying they’re not sure that would be legal, considering the Vibe City campaign is funded by tax revenue earmarked for advertising and promoting the city.

City Council leaders called the budget cuts a necessary, if painful, step toward stabilizing Long Beach’s finances after years of instability papered over with one-time cash — a bet that higher fees now will spare deeper cuts later.

“It’s hard, and it’s personal for everyone, and it will be really difficult on families across this community,” said Councilmember Megan Kerr.