CA To Cut Power Company Profits, But You Won't See Much of a Change
12/20/2025 | 2mVideo has Closed Captions
Regulators propose a modest cut to utility profit margins.
State regulators recommended lowering the shareholder return for California’s biggest electric utilities, a move critics say is too small to noticeably reduce bills. Even with the cut, Californians would still pay among the highest electricity rates in the nation.
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SoCal Matters is a local public television program presented by PBS SoCal
CA To Cut Power Company Profits, But You Won't See Much of a Change
12/20/2025 | 2mVideo has Closed Captions
State regulators recommended lowering the shareholder return for California’s biggest electric utilities, a move critics say is too small to noticeably reduce bills. Even with the cut, Californians would still pay among the highest electricity rates in the nation.
Problems playing video? | Closed Captioning Feedback
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Learn Moreabout PBS online sponsorshipIn a proposed decision, the California Public Utilities Commission recommended dropping the return on equity by 0.35% each for Pacific Gas and Electric Southern California Edison and San Diego Gas Electric.
It's the lowest profit margin in 20 years for PGE and Southern California Edison, but will be hard to notice in your payments if approved.
Shareholders of all three companies would see a potential return next year of just under 10%.
Critics of the decision said that the decline is too small to meaningfully impact rate payers bills, even if it's a step in the right direction.
Californians pay the second highest electricity rates in the country, after Hawaii, according to the most recent figures from the U.S.
Energy Information Administration.
A number of factors go into these rates, including wildfire mitigation costs.
PG&E, in particular, has attracted the ire of California customers for its frequent rate hikes.
Baked into those bills is a return on equity.
Money meant to.. shareholders for the risk of doing business.
Utilities routinely request that these rates be pushed higher, because they're a key part of what goes in the utility's credit ratings, affecting the interest they pay on loans for infrastructure investments.
Rates for U.S.
ten-year Treasury bonds, which are considered the benchmark for risk reinvestment, are about half the national average for approved utility shareholder return rates, and it's costing utility ratepayers across the country as much as $7 billion annually, according to academics.
The commission is allowed to set the debt equity balance when it determines shareholder returns, but it left this unchanged for all three utilities in this proposed decision.
For 2026.
Mark Ellis, former chief economist at Sempra, which owns San Diego Gas and Electric, said keeping shareholder return rates high as the main means for keeping credit ratings up unnecessarily burdens ratepayers.
The California Public Utility Commission is expected to vote on the decision at the end of the year.
For CalMatters, I'm Malena Carollo.
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SoCal Matters is a local public television program presented by PBS SoCal