California Slashes Utility Profits To Record Lows: But Customers See Almost No Savings

The California Public Utilities Commission is on the brink of reducing power companies’ return on equity rates to unprecedented lows. This adjustment will be minimal, likely going unnoticed in consumers' utility bills. A recent proposal suggests lowering the “return on equity” by 0.35% for the major investor-owned utilities: Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. If ratified, shareholders’ returns could drop to just below 10%, marking the first time in over two decades that such rates for PG&E and Edison have dipped below double digits. Utility companies argue that this decrease will hinder their ability to attract vital investments. However, critics maintain the adjustment is too slight to significantly impact customers. As Californians currently face the second-highest electric rates in the U.S., careful scrutiny of these rates and their implications on service and reliability remains paramount. The commission is set to decide on this matter in December.