US EditionCalifornia is considering cutting power company profits to historic lows, but bills will barely drop
The proposed 0.35 percentage point cut aims to reduce excessive utility shareholder payouts amid record-high electricity rates, but is unlikely to significantly lower customer bills.
- Next year, the California Public Utilities Commission proposed cutting the return on equity by 0.35% for Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, setting returns just under 10%.
- In recent years, experts and consumer advocates argue the utility sector is low-risk but shareholder returns stayed high, while academics estimate this costs ratepayers $7 billion annually.
- Financially, PG&E's 10% return in 2023 equated to about $125 million, and a 1% lower return would have cut $12.5 million from potential payouts for ratepayers.
- Critics warn the cut is too small to change bills because return on equity is baked into customer bills, limiting near-term relief for ratepayers.
- Amid rising infrastructure and wildfire costs, utilities say reducing returns would hinder investment and affect credit ratings, while utility spokespeople stress accurate returns are essential to finance wildfire mitigation and reliability as rate bases grow.
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California is about to cut power company profits to historic lows. Your bill will barely drop - inewsource
California Public Utilities Commission recommended dropping the “return on equity” by 0.35% each for San Diego Gas & Electric and others. This content California is about to cut power company profits to historic lows. Your bill will barely drop appeared first on inewsource.
California Is About to Cut Power Company Profits to Historic Lows; Your Bill Will Barely Drop
Noozhawk republishes news articles from CalMatters on state and local policy issues that affect Santa Barbara County readers. With California electric rates stuck at nearly the highest in the nation, the state’s utility regulator is poised to lower the payout shareholders can receive from California’s three large investor-owned power companies. In a proposed decision, the California Public Utilities Commission recommended dropping the “return …
California is considering cutting power company profits to historic lows, but bills will barely drop
With California's electric rates being the second-highest in the nation, the state's utility regulator is considering lowering the payout shareholders can receive from the state's three large...
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