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California 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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9 Articles
9 Articles
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...
·San Francisco, United States
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California is considering cutting power company profits to historic lows, but bills will barely drop
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.
·United States
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California to cut power company profits but your bill will barely drop
California utilities regulators are bringing down “return on equity” payments to power company shareholders. It’s the lowest profit margin in 20 years for PG&E and Southern California Edison, but will be hard to notice in your payments.
·Palm Springs, United States
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Coverage Details
Total News Sources9
Leaning Left4Leaning Right0Center2Last UpdatedBias Distribution67% Left
Bias Distribution
- 67% of the sources lean Left
67% Left
L 67%
C 33%
Factuality
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