A host of global factors are affecting local power pricing, REU says
Redding Electric Utility has proposed a series of 4.5% annual hikes in electric bills over the next four years. The city-owned utility hosted two public forums for residents yesterday to explain the factors behind price hikes.
Earlier this month, Redding Electric Utility announced that it is proposing an approximately 4.5% hike in electric bills each year for four consecutive years. The municipal energy provider said the increase in billing is needed due to a number of factors, including infrastructure maintenance, the rising cost of power resources, and requirements to transition to more carbon neutral energy sources under state policy.
On March 3, the Redding City Council will vote on whether to approve REU’s proposed pricing increase. Ahead of next week’s meeting, the city utility held two public workshops at City Hall yesterday to provide the public with information on what’s driving the rate changes.
Joseph Bowers, REU’s Assistant Director of Resources, spoke at the workshops, explaining how the cost of a local Redding bill is influenced by multiple global factors — including America’s foreign and domestic policy.
“Transformers in the last several years have increased by 100% in cost,” Bowers explained, noting that the price of copper has also increased, as he listed examples of how inflation is impacting operational costs at REU. The current federal matrix of tariffs contributes to that inflation while also playing a significant role in certain kinds of power pricing, Bowers said.
“We had a quote for solar at $37.50 a megawatt hour… and then the updated quotes that we were getting for solar are now $56 a megawatt hour,” Bowers continued, adding that most solar panels are made in other countries.
The fact that foreign markets are a major source of key green energy products like solar panels means that increased costs from tariffs are layered on top of California’s mandated transition away from fossil fuels.
“In the rest of the United States, they’re building gas generation, and there’s actual tax incentives for that right now, under the current [presidential administration],” Bowers said.
Redding’s current energy portfolio relies on a variety of other energy sources like hydroelectric, wind, and even nuclear.
There are also other market factors driving up power costs, REU says. One is the effect that the artificial intelligence industry is having on the energy market. AI requires an extraordinary amount of electricity to run data centers, which have bloated the pricing of electricity in certain states, as reflected in household utility bills. Municipal electric companies are now having to compete with data centers for buying access to energy sources, and in one case, Bowers recalled, a data center was able to outbid REU.
“The demand for energy is going bonkers,” Bowers emphasized.
And within a fire-prone state like California, costs associated with wildfire mitigation also mean increased investments in improving REU’s aging infrastructure.
Bowers also addressed common community concerns about the impact of labor costs.
“Labor is a component. It’s about 25% of our budget,” he said, noting that the percentage of the utility’s budget spent on staffing costs will not increase under the proposed rates, while adding that much of REU’s labor is provided by unionized contract workers at market-based rates that fluctuate with global and domestic factors.
Envisioning a scenario in which REU attempts to implement cost savings by cutting labor costs, Bowers said: “we just cut labor for a highly competitive market by 10% and what does that do for linemen and all the positions that you really want to recruit for, engineers, traders?”
Shown at the workshop were graphs documenting the utility’s current budget and its projected 2030 budget, an effort to document how quickly the utility is slated to run out of cash-on-hand without rate increases. According to REU’s calculations, without an increase in utility bills, REU’s savings will plummet to near nothing in the next five years.
The vast majority of people at the evening workshop were city employees; with less than ten local residents in attendance. One of those locals was David Hallagan, who’s lived in Redding for 27 years. He hoped to learn more about what’s driving up his bills. Before taking his time to analyze all of the information at the workshop, Hallagan questioned whether REU’s reference to PG&E’s pricing in comparison to its own — the privately-owned utility’s rates are far more expensive than REU’s — was really a useful datapoint.
He said he would like to see how Redding’s rates compare to other cities that own their own utilities. For comparison, the Sacramento Municipal Utility Department, which claims to be among the cheapest energy providers in California, estimates a monthly bill of about $149 for 750 kilowatt-hours of usage. Currently, REU charges around $159 per month for 800 kilowatt-hours of usage.
After the workshop, Hallagan told Shasta Scout by email that, “I think a lot of people take these services for granted. Yes — REU needs to continue to work on cost containment. But, I came away with a better understanding of what REU is up against.”
Regardless of whether the price increase is approved by the council next week, Bowers said he wanted the public to know about REU’s Residential Energy Discount program, which subsidizes monthly electricity bills for income-eligible homes. “By state law, we are required to spend 2.85% of our revenue on public benefit programs,” Bowers explained, saying the City of Redding elected to funnel the resources toward the residential energy discount, among other programs.
While some income-eligible residents may not be enrolled because not enough people know about the program, others may not take the step for other reasons. Bowers referred to an anecdote from his own life that may explain some community members’ hesitancy saying in the past his own father-in-law declined to sign up for the program despite his financial eligibility.
“He didn’t do it because he didn’t want a handout — there’s a culture in Redding of people wanting that pioneer spirit,” Bowers said. “A lot of people perceive it as a handout, even though we’d like to think of it as a hand up.”
2.27.2026 8:13 p.m.: We have updated this story with the correct name of the Residential Energy Discount program, which provides financial assistance for energy costs to income eligible households.
Do you have a correction to share? Email us: editor@shastascout.org.
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I watch electricity rates closely due to having an electric car. REU gives me very reliable power in Redding at $0.15/kWhr. It is rare to ever have a power outage for me in Redding. PGE gives my business unreliable power in Burney at $0.45/kWhr. We have 4 power outages in Burney/year on average—which already this year lost my business revenue. I’m installing solar with batteries to mitigate PGEs poor service and hopefully level out their ever-increasing costs. This rate hike in redding will increase our power costs to $0.17/kWhr. If it continues to give REU a hardened, reliable delivery of power to my home, I am willing to pay more. Thank you for REU for treating us right. Just wish I could have REU in Burney.
I don’t think most people realize how much the growth of AI demands the construction of more and more data centers, the huge amounts of electricity required to power those data centers, the ensuing competition for electricity by big tech, and how much that will continue to escalate costs unless we succeed in figuring out a way to harness nuclear fusion.
Also, Trump’s tariffs are royally screwing us.
Nicholas Zerrek, Director of Public Utility salary & benefits was $586,514.15 in 2024, Ted Miller, Ass’t. Director $542,177.50, Daniel Mathew’s, System Operator, $494,922.14, Lisa Bryan, Ass’t. Director $444,721.65. Need I say more?
4 years equals 18% increase.
Hope the City Council does a DOGE inspection of all expenses for the REU.
A DOGE inspection?!?! You mean firing qualified people and stealing your personal information. Fuck that noise.
So you think it’s okay to raise rates by 18% so the City Council can take more money away from REU because they lost the lost Measure A by 70/30% but need to cover their expenses without a third party audit.
You must work for the City!
When someone says that a DOGE audit met any reasonable standards of accounting I laugh at the two brain cells rubbed together for a spark.
I was part of that 70% because the city needs to resolve issues with spending.
A 4.5% compounded rate increase for 4 years running is a bit excessive so I hope the city council will consider costs are impacting not just REU but the entire community.
Let’s not forget who has caused the spike in costs of copper, steel etc that REU speaks of. The illegal tariffs brought on by the orange pedi file in chief.
I would like to know more about how Ca state policies are increasing our utility rates, specifically the ‘California’s Net Zero Plan (2022)’. If the Net Zero Plan is boosting the cost of electricty how much does REU predict this boost is?
President Trump has taken many actions to reduce energy costs. Two of those actions are requiring tech firms to self-fund power and deregulation and increased fossil/nuclear production. I want to know if these will be beneficial to us in Redding or if California Net Zero plan will mean we cannot benefit from those positive changes?
I expect some cost increases due to tariffs but is REU able to make reductions in projected revenues needed if costs decline?
Interesting take on Trump there, Stewart. A poll taken just before trump’s recent war shows over 80% of Americans say affordability has not improved under President Trump, with nearly half (47%) saying it has worsened — particularly for groceries, insurance, rent, and homeownership.
Nearly half say affordability has gotten worse since trump took office for his second term and a third say they are not as well off as they were in January 2025.
A slim 53% majority say they have “just enough to maintain” their standard of living.
Residential electricity bills have increased by approximately 13% since President Trump took office in January 2025.
Natural Gas: Prices for natural gas rose by 10.8% over the past year.
Gasoline was down by about 20%. But today, the price of oil and gas jumped when markets opened as Trump’s war widened across the Middle East.
Trump’s second term (beginning January 2025), federal data indicate that overall food costs have continued to rise, though the rate of increase varies by item.
A January 2026 report issued befor trump’s new war found that in 2025, the average family spent over $320 more on housing costs, part of a $1,625 total increase in annual household spending due to inflation.
I have very specific questions. Unfortunately, I cannot attend any of the community events to discuss the cost increases.
Our utility bills should be a non partisan issue, however, the state of Ca. has some of the highest costs in the nation along with Hi.
I’d like to know why, as well as how much Ca. policies are driving it in the opinion of REU.
Maybe stop glazing trump for things he didn’t do, and realize all energy companies are for-profit with shareholders.
Learn how the world works
Uh….wrong.
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REU and SMUD are both community-owned, not-for-profit organizations.
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PG&E—my provider—is an investor-owned, for-profit corporation. If REU provides your electricity and think the private sector magically provides more efficiency and lower costs, I invite you to trade electric bills with me this summer. Similarly, nearly every western democracy provides socialized medicine with better outcomes and patient satisfaction at about half the per-capita cost. We pay through the nose for sub-par care so that insurance companies can bleed us white, and their bean counters (rather than doctors) decide what kind of care we get.
.
Learn how the world works.
The “average” rate comparison of SMUD and REU in this article is highly misleading.
SMUD offers customers a variety of rate plans:
https://www.smud.org/Rate-Information/Residential-rates
Many REU ratepayers would see monthly bill reductions of 25% or more by choosing their lowest cost time-of-use SMUD plan, when compared to the increased REU rates.
The real “handout” REU has always provided is to high-cost peak energy users, mostly those with large or otherwise inefficient homes, who crank up the AC in Summer on power supplied to them at a fraction of REU’s actual cost.
Like everything else now, energy is no longer a local issue. Trumpian policies cause market volatility, tariffs on infrastructure equipment, stalled renewable projects, support for costly and polluting power plants, and climate change, contributing to higher energy costs. And yes, Redding REU relies on gas for a significant portion of its electricity generation.
Americans have the strength, knowledge, and ability to overcome the energy crisis if we tackle it like a modern-day Manhattan Project. Instead, Trump targets Iran.
MAGA and Trump, who has personally pocketed over a hundred million in support from the oil and gas industry, love costly and dirty energy because, like the taxpayer-subsidized military-industrial complex, the subsidized energy complex is run by corporatists who buy off our political system. Meanwhile, anti-union Trump and his MAGA try to blame it on the workers who produce our power.
Meanwhile, national and international economists report that Trump’s attack on Iran will significantly drive up global (yes, global means Redding, Ca) energy costs.
Cool eh? The corporatists will be making a killing off it, in more ways than one!
So happy Trump is taking out the trash. Venezuela and Iran. Who wants some?!
And an administration that cannot enunciate why exactly we are now in a war with Iran. Trumps says “we can fight a forever war”. Rubio has come up with a new argument on the daily with the latest “ US struck Iran fearing it would retaliate for Israeli attack”. Hegseth has described as emblems of the “modern-day American
Christian crusade.” These are lunatics and you’re not even seeing the smokescreen from the Epstein files driven by the GOP pedo’s.