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Southern California Edison lineman works on a repair. (Don Kelsen / Los Angeles Times) LOS ANGELES, CA-SEPGTEMBER 25, 2014: Melody Petersen By Melody Petersen Staff Writer Follow Dec. 18, 2025 5:33 PM PT * * 10 * 6 min Click here to listen to this article * Share via Close extra sharing options + Email + Facebook + X + LinkedIn + Threads + Reddit + WhatsApp + Copy Link URL Copied! + Print 0:00 [0 ] 0:00 [100 ] 1x This is read by an automated voice. Please report any issues or inconsistencies here. * California regulators voted to keep utility profit margins near 10%, despite calls to cut them to 6% and save customers billions annually. * Edison's electric rates have surged more than 40% in three years, pushing California to the nation's second-highest rates after Hawaii. * Regulators approved slightly lower profit margins amid complaints from customers about rising electric bills. Despite complaints from customers about rising electric bills, the California Public Utilities Commission voted 4 to 1 on Thursday to keep profits at Southern California Edison and the state's other big investor-owned utilities at a level that consumer groups say has long been inflated. The commission vote will slightly decrease the profit margins of Edison and three other big utilities beginning next year. Edison's rate will fall to 10.03% from 10.3%. Customers will see little impact in their bills from the decision. Because the utilities are continuing to spend more on wires and other infrastructure -- capital costs that they earn profit on -- that portion of customer bills is expected to continue to rise. Advertisement Altadena, CA - February 11: Investigators view the Edison electrical lines, transmission towers and surrounding area, which is a location that is being investigated as the possible origin of the Eaton fire in Eaton Canyon in Altadena Tuesday, Feb. 11, 2025. (Allen J. Schaben / Los Angeles Times) Climate & Environment Edison neglected maintenance of its aging transmission lines before the Jan. 7 fires. Now it's trying to catch up Southern California Edison began charging customers for hundreds of millions of dollars of maintenance on its aging transmission lines that regulators approved but it did not actually do in the four years before the Eaton fire, according to state documents. Dec. 17, 2025 The vote angered consumer groups that had detailed in filings and hearings at the commission how the utilities' return on equity -- which sets the profit rate that the companies' shareholders receive -- had long been too high. Among those testifying on behalf of consumers was Mark Ellis, the former chief economist for Sempra, the parent company of San Diego Gas & Electric and Southern California Gas. Ellis estimated that the companies' profit margin should be closer to 6%. He argued in a filing that the California commission had for years authorized the utilities to earn an excessive return on equity, resulting in an "unnecessary and unearned wealth transfer" from customers to the companies. Cutting the return on equity to a little more than 6% would give Edison, Pacific Gas & Electric, SDG&E and SoCalGas a fair return, Ellis said, while saving their customers $6.1 billion a year. The four commissioners who voted to keep the return on equity at about 10% -- the percentage varies slightly for each company -- said they believed they had found a balance between the 11% or higher rate that the four utilities had requested and the affordability concerns of utility customers. Alice Reynolds, the commission's president, said before the vote that she believed the decision "accurately reflects the evidence." Advertisement Commissioner Darcie Houck disagreed and voted against the proposal. In her remarks, she detailed how California ratepayers were struggling to pay their bills. "We have a duty to consider the consumer interest in determining what is a just and reasonable rate," she said. Consumer groups criticized the commission's vote. "For too long, utility companies have been extracting unreasonable profits from Californians just trying to heat or cool their homes or keep the lights on," said Jenn Engstrom at CALPIRG. "As long as CPUC allows such lofty rates of return, it incentivizes power companies to overspend, increasing energy bills for everyone." California now has the nation's second-highest electric rates after Hawaii. Altadena, CA - February 11: Investigators view the Edison electrical lines, transmission towers and surrounding area, which is a location that is being investigated as the possible origin of the Eaton fire in Eaton Canyon in Altadena Tuesday, Feb. 11, 2025. (Allen J. Schaben / Los Angeles Times) Climate & Environment 'This fire could have been prevented': How utilities fought removal of old power lines Regulators wanted Southern California Edison and other utilities to remove abandoned power lines -- such as the one suspected of igniting the Eaton fire -- but backed down amid utility opposition. Aug. 1, 2025 Edison's electric rates have risen by more than 40% in the last three years, according to a November analysis by the commission's Public Advocates Office. More than 830,000 Edison customers are behind in paying their electric bills, the office said, each owing a balance of $835 on average. The commission's vote Thursday was in response to a March request from Edison and the three other big for-profit utilities. The companies pointed to the January wildfires in Los Angeles County, saying they needed to provide their shareholders with more profit to get them to continue to invest in their stock because of the threat of utility-caused fires in California. In its filing, Edison asked for a return on equity of 11.75%, saying that it faced "elevated business risks," including "the risk of extreme wildfires." Advertisement The company told the commission that its stock had declined after the Jan. 7 Eaton fire and it needed the higher return on equity to attract investors to provide it with money for "wildfire mitigation and supporting California's clean energy transition." Edison is facing hundreds of lawsuits filed by victims of the fire, which killed 19 people and destroyed thousands of homes in Altadena. The company has said the fire may have been sparked by its 100-year-old transmission line in Eaton Canyon, which it kept in place even though it hadn't served customers since 1971. ALTADENA, CA - JANUARY 15, 2025 - - Workers with Southern California Edison attach lines to a telephone pole among the ruins of a structure destroyed by the Eaton fire in Altadena on January 15, 2025. (Genaro Molina/Los Angeles Times) Climate & Environment Edison electric bills set to rise 10% under state plan. More hikes coming soon The California Public Utilities Commission is set to allow Southern California Edison to increase customer bills by nearly 10% on Oct. 1 -- just one of multiple rate hikes expected in the coming year. Sept. 15, 2025 Return on equity is crucial for utilities because it determines how much they and their shareholders earn each year on the electric lines, substations, pipelines and the rest of the system they build to serve customers. Under the state's system for setting electric rates, investors provide part of the money needed to build the infrastructure and then earn an annual return on that investment over the assets' life, which can be 30 or 40 years. In a January report, state legislative analyst Gabriel Petek detailed how electric rates at Edison and the state's two other biggest investor-owned electric utilities were 50% higher than those charged by public utilities such as the Los Angeles Department of Water and Power. The public utilities don't have investors or charge customers extra for profit. Before the vote, dozens of utility customers from across the state wrote to the commission's five members, who were appointed by Gov. Gavin Newsom, asking them to lower the utilities' return on equity. Advertisement "A profit margin of 10% on infrastructure improvements is far too high and will only continue to increase the cost of living in California," wrote James Ward, a Rancho Santa Margarita resident. "I just wish I could get a guaranteed profit margin of 10% on my investments." More to Read * California Gov. Gavin Newsom signs a slew of climate initiative bills at the Academy of Sciences, Friday, Sept. 19, 2025 in San Francisco. (AP Photo/Camille Cohen) For Subscribers 'It's effectively a bailout': Edison benefits from fine print in Newsom's last-minute utility legislation Oct. 18, 2025 * FILE - The Salesforce Tower and skyline are shown behind the gasoline price board at a gas station in San Francisco, July 20, 2022. (AP Photo/Jeff Chiu, File) California energy regulators pause efforts to penalize oil companies for high profits Aug. 30, 2025 * LOS ANGELES, CA - JUNE 18: Juan Alcantara, left, intern/trainee, Sal Miranda, supervisor, and Lee Kwok, solar installer supervisor, of GRID Alternatives, a nonprofit, install solar panels that will generate 5 kilowatts of energy at a low-income home in Watts on Friday, June 18, 2021 in Los Angeles, CA. A total of 15 327 watt panels were placed on the roof. (Gary Coronado / Los Angeles Times) California Supreme Court sides with environmental groups in rooftop solar case Aug. 7, 2025 Show Comments Climate & EnvironmentBusinessCaliforniaPoliticsFiresThe Latest [] Melody Petersen Follow Us * X * Email Melody Petersen is an investigative reporter covering healthcare and business for the Los Angeles Times. Send her tips securely on Signal at (213) 327-8634. More From the Los Angeles Times * Tony Hawk in a white shirt and dark pants doing a one-handed handstand in a skate park. Entertainment & Arts Tony Hawk skates his way into 'Nutcracker' for San Diego show: 'You just have to say yes' * MONTEREY, CA -- TUESDAY, AUGUST 2, 2016: Tourists explore on the coast of Pacific Grove section of the Monterey Bay coastline on a summer day in Monterey. Steve Lopez takes a California coastal tour marking the 40th anniversary of the Coastal Act in California, CA, on Aug. 2, 2016. (Allen J. 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