Electrification Done Right Can Lower Costs for Californians

By: Cole Jermyn and Dakoury Godo-Solo

California’s energy debates rarely generate consensus. But recent analyses reveal a clear and important point of alignment across the state’s large electric utilities and the California Public Advocates Office, the state’s ratepayer advocate, with major implications for utility customers and California’s clean energy future.

Utilities and consumer advocates agree that smart growth in electricity use can lower costs for customers, even as the grid modernizes. Electric vehicles, especially when charging is managed well, are one of the most effective ways to turn grid investment into long-term savings for Californians.

When managed well, electric load growth can lower costs for ratepayers, and transportation electrification — particularly managed electric vehicle (EV) charging — is one of the most effective ways to deliver those benefits. This alignment should give regulators and policymakers confidence to stay the course on electric vehicles and strengthen the policies that make electrification work for Californians.

California is electrifying transportation and buildings to cut air pollution, reduce climate risk and improve public health. Doing so requires investment in the electric grid. That fact is often framed as a cost problem and sometimes as a reason to slow progress.

Load growth can reduce costs, not raise them

But the latest studies from PG&E, Southern California Edison, San Diego Gas & Electric and the Public Advocates Office tell a more complete story.

Yes, grid upgrades will require significant investment over the coming decades. At the same time, electrification increases electricity sales. When utilities connect new customers — such as electrified vehicle fleets — to the grid, they can spread grid investment costs across a larger base of customers, lowering the average cost of service for everyone.

Put simply, electrification done right can reduce electricity rates rather than raise them. This conclusion holds across multiple analyses, even though they rely on different assumptions and modeling approaches. While precise cost estimates vary, the direction is consistent: Managed load growth creates value for customers.

The details differ, but the takeaway is clear

Utilities and the Public Advocates Office do not model the grid in the same way, nor should they. Forecasting future grid needs involves uncertainty, particularly over long time horizons, and differences in assumptions naturally lead to different investment estimates.

What matters most is where the studies agree. They find that electrification can deliver significant benefits for customers and that adding flexible load is the most effective way to do so, with transportation electrification playing an outsized role. This convergence should give policymakers confidence that the case for electrification does not rest on any single model or set of assumptions but holds across perspectives.

Why electric vehicles matter so much

Electric vehicles stand out because of how and when they use electricity. Unlike some emerging large loads, such as data centers that often require round-the-clock power, most EV charging is flexible. Vehicles spend far more time parked than on the road. With the right rates, programs and infrastructure, charging can shift away from the most expensive and constrained hours on the grid.

That flexibility makes EVs uniquely valuable from a grid perspective. Every major study identifies EV charging behavior as a key driver of cost savings. Managed charging reduces peak demand, avoids unnecessary grid upgrades and makes better use of existing infrastructure.

In many cases, the savings are large enough to more than offset the costs of preparing the grid for electrification. The Public Advocates Office estimates that by 2040, managed EV charging could avoid between $5 billion and $18 billion in grid upgrade costs.

This is not a future promise. California already has time-of-use rates, managed charging programs and growing experience integrating EVs into grid planning. The studies confirm that these tools work and that scaling them will increase benefits for all customers.

What this means for California’s energy policy

This alignment across utilities and consumer advocates sends a clear message: California does not need to choose between affordability and electrification. It needs to execute electrification well.

As Environmental Defense Fund outlined in recent comments to the California Public Utilities Commission’s High DER proceeding, getting electrification right means accelerating electric vehicles and charging infrastructure while removing barriers that slow deployment and delay energization. It also means expanding managed charging and demand flexibility programs that make it easier for customers to charge at grid-supportive times, and planning proactively for electrification so investments are timely, targeted and cost-effective.

It also means recognizing that moving to electric vehicles is not just a climate strategy — it is a people strategy. When designed and managed thoughtfully, EV adoption can help stabilize rates, improve grid utilization and deliver broad public benefits, including cleaner air and lower household energy costs.

A moment to move forward with confidence

At a time when energy affordability remains a front-and-center issue in California, it is rare to see the state’s utilities and the Public Advocates Office in agreement. That convergence should build confidence, not caution.

Electrification is coming. The opportunity now is to capture its full value. By supporting smart load growth and continuing to accelerate electric vehicles, California can lower costs for ratepayers, strengthen the grid and stay on track to meet its clean energy goals. This is one of those moments when the analysis is clear — and the policy response should be, too.