California Reduces PG&E and Edison Profits to Boost Grid Investments
California regulators have taken a significant step to address the rising electricity bills faced by consumers by reducing the profit margins that utilities can earn on their infrastructure investments. This decision, made by the California Public Utilities Commission (CPUC), reflects the state’s ongoing struggle to balance the need for a robust power grid with the financial burden placed on residents and businesses.
Related: Massive Wildfire Liabilities Push Utilities to Use AI to Stop Blazes
The CPUC’s recent move highlights the conflicting policy objectives that California faces. On one hand, the state is eager for power providers to enhance the grid, especially in light of the catastrophic wildfires that have plagued the region. However, the costs associated with these improvements can reach billions of dollars, which are often passed on to consumers by major utility companies such as PG&E Corp., Edison International, and Sempra. At the same time, regulators are keen to prevent further inflation of utility bills, making this a complex issue.
Related: PG&E Investing $73B in Capital Spending Through 2030 to Harden System
In a decisive 4-1 vote, the CPUC set the allowable returns for California’s primary investor-owned utilities—PG&E, Southern California Edison, and San Diego Gas & Electric—within a range of 9.78% to 10.03%. This is notably higher than the national average of approximately 9.72%. Utilities had initially requested higher returns, with PG&E seeking 11.3%, SoCal Edison aiming for 11.75%, and SDG&E proposing 11.25%.
Copyright 2025 Bloomberg.
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Profit Loss
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California regulators have taken a significant step to address the rising electricity bills faced by consumers by reducing the profit margins that utilities can earn on their infrastructure investments. This decision, made by the California Public Utilities Commission (CPUC), reflects the state’s ongoing struggle to balance the need for a robust power grid with the financial burden placed on residents and businesses.
Related: Massive Wildfire Liabilities Push Utilities to Use AI to Stop Blazes
The CPUC’s recent move highlights the conflicting policy objectives that California faces. On one hand, the state is eager for power providers to enhance the grid, especially in light of the catastrophic wildfires that have plagued the region. However, the costs associated with these improvements can reach billions of dollars, which are often passed on to consumers by major utility companies such as PG&E Corp., Edison International, and Sempra. At the same time, regulators are keen to prevent further inflation of utility bills, making this a complex issue.
Related: PG&E Investing $73B in Capital Spending Through 2030 to Harden System
In a decisive 4-1 vote, the CPUC set the allowable returns for California’s primary investor-owned utilities—PG&E, Southern California Edison, and San Diego Gas & Electric—within a range of 9.78% to 10.03%. This is notably higher than the national average of approximately 9.72%. Utilities had initially requested higher returns, with PG&E seeking 11.3%, SoCal Edison aiming for 11.75%, and SDG&E proposing 11.25%.
Copyright 2025 Bloomberg.
Topics
California
Profit Loss
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