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Soaring utility bills push some low-income Californians to the financial brink

MICHEL MARTIN, HOST:

California has some of the highest energy costs in the country. Electricity rates there have nearly doubled over the past decade. And millions of residents are facing another major rate hike starting January 1, in part to deal with the risks of wildfires. From member station KQED in San Francisco, Vanessa Rancano reports on how soaring utility bills are pushing some low-income Californians to the financial brink.

VANESSA RANCANO, BYLINE: This time of year, Michael Yamamura and his family have strategies for keeping their energy bills down.

MICHAEL YAMAMURA: We can put on a sweater, use some blankets. Worst comes to worst, we're cold. It's not that bad.

RANCANO: What Yamamura really worries about is the summertime, when energy bills are at their highest. He shares an apartment in Fresno with his brother and their mom, who has a lot of health problems. Because of that, AC is a must. So when temperatures hit triple digits, their monthly bills top $500. That makes it hard to keep up on rent.

YAMAMURA: Sometimes, I don't pay it until they give me the three-day notice.

RANCANO: The 20-year-old has reason to worry about getting evicted. His family was homeless a few years ago when he was in junior high. His mom can't work because of her health, so now he and his brother, who's 23, are trying to support the family.

YAMAMURA: I've been pretty terrified of ending up out on the street again.

RANCANO: Utility costs will swallow an even bigger portion of their budget when Pacific Gas & Electric, the state's biggest utility, hikes rates in January. The increase will pay for over 1,200 miles of power lines to be buried for wildfire prevention. PG&E, which has been sued for starting fires with its equipment, has spent billions on upgrades. And that cost gets passed along to customers. Almost a third of California households report struggling to pay energy bills, what researchers call energy insecurity.

DIANA HERNANDEZ: The heat or eat dilemma.

RANCANO: Diana Hernandez is a Columbia University professor who studies this. She says wildfire-related expenses and the growing energy demands that come with climate change are colliding with California's housing crisis.

HERNANDEZ: Today's unpaid energy bill is tomorrow's eviction notice. And that cycle is a very real one.

RANCANO: California has programs designed to help subsidize bills and manage debt, but advocates say they're not enough. California has been ahead of other states when it comes to these soaring utility costs, according to energy experts. But it's expected to be an increasing issue for other states, as well. Severin Borenstein is a UC Berkeley energy economist.

SEVERIN BORENSTEIN: We are just seeing the beginning of this, I fear.

RANCANO: He expects other wildfire-prone states to see utility costs spike in the near future.

BORENSTEIN: The big question is, will they also try to pay for them by raising electricity rates? Or will they cover them through the state budget or through other taxes? California so far has paid for them by raising electricity rates.

RANCANO: And his research has found that puts a disproportionate burden on low-income customers like Yamamura and his family.

YAMAMURA: You know, I'd like to pay rent on time. I'd like to have bills paid and not be hours away from getting an eviction notice. But that's where I've been at for the past few years.

RANCANO: By this fall, Yamamura's family owed PG&E $1,300, including overdue charges. As new rate hikes go into effect, they and other customers can expect to pay around 30 to $40 more each month. And the utility is already pushing for another increase later in the year.

For NPR News, I'm Vanessa Rancano.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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