[HN Gopher] State regulators vote to keep utility profits high a...
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State regulators vote to keep utility profits high angering
customers across CA
Author : connor11528
Score : 62 points
Date : 2025-12-22 19:06 UTC (3 hours ago)
(HTM) web link (www.latimes.com)
(TXT) w3m dump (www.latimes.com)
| RheingoldRiver wrote:
| Archive link: https://archive.is/LkHqZ
| fusslo wrote:
| difficult to find the reasoning behind the 10% being considered
| "reasonable" from the article. It sounds like Edison has a lot of
| risk mitigation of wildfires, and is dealing wit a lot of
| litigation.
|
| Is part of the 10% profit going to these costs? Or since they're
| an expense it's not apart of the 10% profit?
| vkou wrote:
| Pussyfooting around this issue is the worst of both worlds.
|
| Why on earth is a government-protected monopoly entitled to 10%
| margins? Or even 6% margins? It's risk-free money with a
| captive market.
|
| What is the point of all this bullshit? Why not just call it a
| day, and run it as a crown corporation?
|
| > 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.
|
| What utter nonsense. The shareholders need nothing. Take out a
| bloody loan.
|
| The firm's _entire_ concern, as reflected in the article - is
| it 's stock price.
|
| > 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.
|
| Wait, why is this financed by _investors_ and not _lenders_ ,
| like it is in the rest of the civilized world? Is this some
| kind of novel California-specific innovation, and if it is,
| what value has it produced for the world?
| roenxi wrote:
| > Why on earth is a government-protected monopoly entitled to
| 10% margins?
|
| Indeed, how do they pick any margin? If higher is better, why
| not pick 1000%? If lower is better, why not pick 0%? If we
| want something reasonable, why not make it market based to
| figure out what people think when they have to stump up real
| resources themselves? Once profit margins are set by
| committee decision there is little point trying to claim that
| the concern is profit motivated. The profits aren't doing
| much useful signalling. It just sounds stupid.
| doctorpangloss wrote:
| california has its minuses - wildfires, nimbys - but also its
| plusses: solar makes sense for the SFH community people want.
|
| the best escape valve against PG&E and Edison is installing solar
| panels and a battery.
| JohnMakin wrote:
| sure, if you're not in the majority of the population that
| rents instead of owns a home.
| Rebelgecko wrote:
| Hopefully California hops on the balcony plug-in solar train
| in the coming years
| aidenn0 wrote:
| So they are limited in their RoR on capital expenditures. Are
| they limited in their capital expenditures in the first place?
| That is, if they overspend on everything they build, do they make
| more profit than if they engineered things more carefully? I
| assume there must be some limitation here or they would use gold
| instead of copper in their MV transmission lines...
| jeffbee wrote:
| No, that is the obvious problem and it happens right out in
| front of everyone.
| Rebelgecko wrote:
| I think technically CPUC approves at least a subset of
| expenditures, but yes there's the weird incentive where wasting
| money can actually increase profits
| aidenn0 wrote:
| If the government has to approve expenditures and profit
| margins, there seems to be little reason for a private
| utility to exist?
| amanaplanacanal wrote:
| It sounds similar to the insurance industry. The more they pay
| for medical expenses, the more profit they are allowed to keep.
| Bad incentives all around.
| ar0b wrote:
| https://legalclarity.org/what-is-a-rate-case-and-how-does-it...
|
| This comes down to having quality regulators on your public
| utility commission which is heavily state dependent.
|
| https://www.multistate.us/insider/2025/10/27/nine-states-fac...
| jeffbee wrote:
| People are mad about this but, in the end, not really mad enough
| to do anything. California has high volumetric, margin rates for
| electricity but the typical monthly electric bill just isn't that
| high, because we don't need that much of it. The median bill is
| estimated to be $135 - $165/month, that's in the middle of the
| pack for the 50 states. Moreover, the people who can effectively
| get mad about this -- rich people and retirees -- don't suffer
| from it because they are protected by rooftop solar, special
| rates for seniors, etc. The people most exposed to the marginal
| prices are the ones renting old, inefficient dwellings, and they
| don't get a voice.
| youarentrightjr wrote:
| > The median bill is estimated to be $135 - $165/month
|
| I have a hard time believing this; in the Bay Area, the
| privilege of simply _having a 200A connection_ is $130 /month.
| verteu wrote:
| FWIW, one source is https://www.eia.gov/electricity/sales_rev
| enue_price/pdf/tabl...
| labcomputer wrote:
| That includes government-run utilities, like LADWP, Silicon
| Valley Power, and SMUD, which have much lower rates than
| private utilities (And, no, the rate difference is not made
| up by taxpayer subsidies. They're just run more
| efficiently).
| orthecreedence wrote:
| > The people most exposed to the marginal prices are the ones
| renting old, inefficient dwellings, and they don't get a voice.
|
| This comes off very much as "stop being poor lol." Was that
| your intent?
| ursAxZA wrote:
| It's strange that in 2025 we still don't have even a minimal,
| per-capita baseline tier for electricity.
|
| If a household uses less than the monthly per-capita average, why
| not cap that baseline at something like $10?
|
| Yes -- that gap would need to be subsidized, probably through
| taxes. But that's already how grid maintenance works: we
| socialize the fixed costs while pretending rates are purely
| volumetric.(and I might be overstating this slightly).
|
| Right now we punish low-usage consumers and reward structural
| inefficiency. A baseline tier would at least make the incentives
| coherent.
| labcomputer wrote:
| So PG&E already has something like this. It's called either E-1
| or TOU-C, depending on whether time-of-use billing applies. The
| price for the baseline tier is higher than you'd expect,
| though.
| frugalmail wrote:
| Just purchased a replacement gas stove/oven because electricity
| prices in LA are INSANE.
| pclmulqdq wrote:
| People don't realize how much electric heating costs in
| comparison to the fossil fuel alternatives. Gas so much cheaper
| per joule it more than makes up for the efficiency losses. This
| is true even without California's insane electricity economy.
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