State regulators vote to keep utility profits high angering customers across CA(latimes.com)
latimes.com
State regulators vote to keep utility profits high angering customers across CA
https://www.latimes.com/environment/story/2025-12-18/state-regulators-vote-to-keep-utility-profits-high-angering-customers
105 comments
Indeed.
The CA Governor is the one who selects the people on the committee that regulate PG&E.
And the same committee approves PG&E’s budget and rate each year, all the way down to the fine details such as repairing an electrical fence at a substation.
This problem is entirely under the control of Newsom and the CA legislature yet they seem completely uninterested in fixing it.
The CA Governor is the one who selects the people on the committee that regulate PG&E.
And the same committee approves PG&E’s budget and rate each year, all the way down to the fine details such as repairing an electrical fence at a substation.
This problem is entirely under the control of Newsom and the CA legislature yet they seem completely uninterested in fixing it.
I think back to every ... overly enthused student council member or student council president or HOA president I've seen in my education, a microcosm of politics. These are people with a fire inside of them to seize these positions. Speaking with them, as they were my representative to the academic leadership, they would often hear my request and provide a explanation as to why that was not feasible. A naive assessment of their explanation - often at face value reasonable in the most simplistic of ways, a slightly deeper reflection would reveal it was a convenient excuse for the truth - they had a completely different motivation, usually self-interest in nature, but hidden behind the lie to hide the ugly truth.
The same is much true of California. So many strict laws and regulation. For the environment? For safety? Why I can't build a house? No, no - they don't want anyone building houses to keep the prices pumped up high. Same for many things. Keep PG&E rich, and PG&E will keep the people in power rich either directly or through the major supporters of said politicians
The same is much true of California. So many strict laws and regulation. For the environment? For safety? Why I can't build a house? No, no - they don't want anyone building houses to keep the prices pumped up high. Same for many things. Keep PG&E rich, and PG&E will keep the people in power rich either directly or through the major supporters of said politicians
A politician in the US requires immense resources to run any campaign. That means rich people control who gets to be a politician.
Fixing this would require both public funding of campaigns, and immense limits to campaigns. Certain people, ignorant or malicious, will pitch an insane fit about trying to do that.
It doesn't matter how much certain politicians "suck" because the way the system is built, your choices are a guy who is awful but will implement some of what you want, or a guy who is fucking bonkers and will destroy our country, and this is true regardless of your political affiliation.
Even Bernie sucks the political party money teat. Because being the most popular senator isn't a reliable enough way to get elected!
Our politicians spend more time on the job calling rich people and begging for cash than they do actually voting on or discussing legislation.
This will only continue to get worse because the rich people are fully in control, and it benefits them to keep pushing the cost of a campaign higher, as the richer of the rich benefit from boxing out the "just" very rich.
Any change requires serious moves to unseat the current supreme court.
Currently, populism is much more effective for extremely regressive and outright hateful politicians than extremely progressive ones though, so expect things to get much much worse.
FDR was only elected and provided the actual power to make changes after 30% of the country was jobless, and an entire generation had been raised in horrific fiscal policy, and lived in a world where a hard worker for 50 years died in the ditch because we had no retirement program or way of feeding people who no longer work.
If we do literally everything right and the very angry and stupid people suddenly put aside their hatred of "others" for long enough to actually vote for a good idea, we might see improvements in 30 years.
Fixing this would require both public funding of campaigns, and immense limits to campaigns. Certain people, ignorant or malicious, will pitch an insane fit about trying to do that.
It doesn't matter how much certain politicians "suck" because the way the system is built, your choices are a guy who is awful but will implement some of what you want, or a guy who is fucking bonkers and will destroy our country, and this is true regardless of your political affiliation.
Even Bernie sucks the political party money teat. Because being the most popular senator isn't a reliable enough way to get elected!
Our politicians spend more time on the job calling rich people and begging for cash than they do actually voting on or discussing legislation.
This will only continue to get worse because the rich people are fully in control, and it benefits them to keep pushing the cost of a campaign higher, as the richer of the rich benefit from boxing out the "just" very rich.
Any change requires serious moves to unseat the current supreme court.
Currently, populism is much more effective for extremely regressive and outright hateful politicians than extremely progressive ones though, so expect things to get much much worse.
FDR was only elected and provided the actual power to make changes after 30% of the country was jobless, and an entire generation had been raised in horrific fiscal policy, and lived in a world where a hard worker for 50 years died in the ditch because we had no retirement program or way of feeding people who no longer work.
If we do literally everything right and the very angry and stupid people suddenly put aside their hatred of "others" for long enough to actually vote for a good idea, we might see improvements in 30 years.
That's because our political system according to the Greeks is called an oligarchy.
https://en.wikipedia.org/wiki/Sortition
Most Athenians believed sortition, not elections, to be democratic[12][page needed] and used complex procedures with purpose-built allotment machines (kleroteria) to avoid the corrupt practices used by oligarchs to buy their way into office.
https://en.wikipedia.org/wiki/Sortition
Most Athenians believed sortition, not elections, to be democratic[12][page needed] and used complex procedures with purpose-built allotment machines (kleroteria) to avoid the corrupt practices used by oligarchs to buy their way into office.
PG&E are big campaign contributors to Newsom; he is expressly interested in not fixing it.
It's amazing that we had a governor recalled 20 years ago in no small part due to utility-related scandals, but these days, being a public servant in their pocket is just business as usual.
It's amazing that we had a governor recalled 20 years ago in no small part due to utility-related scandals, but these days, being a public servant in their pocket is just business as usual.
I’m whatever the opposite is of a devoted fan of Newsom, but I think describing the cause of this aggregate mess as PG&E buying politicians is well off the mark.
The problem is that PG&E is just one player in a system built up over decades. The system is built on the wrong set of premises, continues to evolve based on those premises, and can only be fixed by rejecting those premises.
This is becoming increasingly obvious, and a politician like Newsom is too smart to tie himself to the mast of a sinking ship.
The problem is that PG&E is just one player in a system built up over decades. The system is built on the wrong set of premises, continues to evolve based on those premises, and can only be fixed by rejecting those premises.
This is becoming increasingly obvious, and a politician like Newsom is too smart to tie himself to the mast of a sinking ship.
> This problem is entirely under the control of Newsom and the CA legislature yet they seem completely uninterested in fixing it.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
- Upton Sinclair, I, Candidate for Governor: And How I Got Licked (1935)
Ironically that quote came from a book about Sinclair's failed bid to win the CA governorship...
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
- Upton Sinclair, I, Candidate for Governor: And How I Got Licked (1935)
Ironically that quote came from a book about Sinclair's failed bid to win the CA governorship...
I guess we will have a total whitewashing effort for Newsom coming up in 2028. Same nonsense as Kamala. Its funny how we can now predict the controversies.
The redirect on the French Laundry thing is going to be epic.
It is, but you're really talking about the same thing: Gavin Newsom is corrupt and comfortably ensconced within the investor-owned utilities' pocket.
Recall that it was so important for Newsom to attend that dinner at the height of COVID because it was Jason Kinney's 50th birthday party, a PG&E lobbyist and close advisor to Newsom.
Recall that it was so important for Newsom to attend that dinner at the height of COVID because it was Jason Kinney's 50th birthday party, a PG&E lobbyist and close advisor to Newsom.
Ha! I totally forgot about that! The only saving grace is that in 2028 new media will have increased even further than in 2024 and it already played a significant role in that election. It will be interesting to see the tactics used to bury things like the French Laundry moment because the opponents have been learning all the tricks that the Democrats like to use and plan for them.
Fossil produced electricity is unsustainably cheap. According to https://lowcarbonpower.org/region/California only half of electricity is low-carbon there. It's imperative to ramp down fossils use and production to mitigate the climate disaster so we can't afford to believe there's "abundant energy resources" in a situation like this.
I was counting solar and offshore wind as abundant energy resources. Also, nuclear, though that’s not state specific.
I can only assume that they've been bribed not to reform PG&E. The real question becomes who is running for office that isn't willing to take bribes so that people who are willing can be voted out of office. If the answer is nobody, than nothing will ever change.
[deleted]
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.
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.
> we socialize the fixed costs
Then we should socialize that infrastructure as well. Otherwise if we're merely _amortizing_ the costs then a total capacity metric should apply to each user.
A private company shouldn't be allowed to socialize important shared infrastructure simply because a weak PUC pretends to engage in oversight.
Then we should socialize that infrastructure as well. Otherwise if we're merely _amortizing_ the costs then a total capacity metric should apply to each user.
A private company shouldn't be allowed to socialize important shared infrastructure simply because a weak PUC pretends to engage in oversight.
I get the intuition behind fully socializing it,
but I wouldn’t go that far.
Single-operator systems lose redundancy fast, and that’s dangerous for infrastructure.
A layered mix — county-level public utilities, some private operators, and some hybrid/municipal entities — might be closer to a resilient structure.
Not clean or elegant, but fault-tolerant.
A layered mix — county-level public utilities, some private operators, and some hybrid/municipal entities — might be closer to a resilient structure.
Not clean or elegant, but fault-tolerant.
You say this like it is a law of nature, but we can plan and build it directly if we want it. Redundancy is not something that only emerges from an indirect 4d-chess strategy of ownership mixes.
Good point. For example, the TVA and BPA are federal agencies that produce electricity. Clearly publicly owned utilities can be successful.
Exactly — if we want redundancy, we should plan and build it.
That’s why I offered one possible implementation as a hypothesis, not as a law of nature.
If you have a better non-ideal, real-world design in mind, I’d be interested to hear it — it makes the discussion much easier.
That’s why I offered one possible implementation as a hypothesis, not as a law of nature.
If you have a better non-ideal, real-world design in mind, I’d be interested to hear it — it makes the discussion much easier.
I live in a province in Canada where the electrical system is owned and operated by a crown corporation. They are mandated to maintain a very high uptime and they do through several means including redundancy. Our electrical bills are cheaper than much of the US. It certainly can be done; there are other means than competition to ensure adequate service.
It is essentially socialized. The government dictates the rates that utilities company is allowed to charge.
The reason we're all here is because the government currently is dictating those rates in representation of the utility companies needs and not the citizens. How this is essentially socialized is beyond me; yet, I do concede that the same rules applied differently would much more likely meet that standard.
We already have an independent systems operator (ISO) to match the amount of load on the grid with the amount of generator current supplying it. I think this model could be expanded to where the state could literally own the transmission lines and equipment and use various regional contractors which would be engaged to maintain it in coordination with the ISO.
Then we have stable infrastructure where generation _and_ maintenance are open markets which may allow customer rates to no longer be controlled by a utilities commission and instead be directly computed from the actual suppliers costs plus taxes. It may even allow for more regional electric companies to form to provide better service to peculiar areas of the state.
We already have an independent systems operator (ISO) to match the amount of load on the grid with the amount of generator current supplying it. I think this model could be expanded to where the state could literally own the transmission lines and equipment and use various regional contractors which would be engaged to maintain it in coordination with the ISO.
Then we have stable infrastructure where generation _and_ maintenance are open markets which may allow customer rates to no longer be controlled by a utilities commission and instead be directly computed from the actual suppliers costs plus taxes. It may even allow for more regional electric companies to form to provide better service to peculiar areas of the state.
Who owns Edison?
That's more or less the system that exists today? You pay a lower rate up to a certain threshold and then a higher rate kicks in.
The problem with PG&E isn't the rate structure, which isn't all that different from utilities anywhere else in the world. It's that their costs are exceedingly high, through a combination of regulatory pressures and grift. This is exacerbated by municipal and state regulators who are pushing consumers to be more reliant on electric power (bans on gas appliances in new construction, pushes toward EVs, etc).
There are vast swathes of the country where people pay 5-10x less for electricity.
The problem with PG&E isn't the rate structure, which isn't all that different from utilities anywhere else in the world. It's that their costs are exceedingly high, through a combination of regulatory pressures and grift. This is exacerbated by municipal and state regulators who are pushing consumers to be more reliant on electric power (bans on gas appliances in new construction, pushes toward EVs, etc).
There are vast swathes of the country where people pay 5-10x less for electricity.
My point was simply that electricity has a “civilization tax” aspect to it, and lower baseline access feels closer to the kind of future-proof system we should be aiming for.
If the floor is gentle, people can actually reduce usage without feeling punished for doing the right thing.
At the moment the baseline tier feels… maybe a “C-rating” version of what a real baseline could be?
If the floor is gentle, people can actually reduce usage without feeling punished for doing the right thing.
At the moment the baseline tier feels… maybe a “C-rating” version of what a real baseline could be?
So who pays the tax? I mean, California already has some of the highest income taxes, corporate taxes, extra capital gains taxes, sales taxes, etc, etc. If you want to lower the cost of electricity for tens of millions of people without addressing systemic problems that make it ridiculously expensive in the first place, you gotta tax someone.
The effective income tax rate for many SF Bay Area techies is around 50%. Do we jack it up to 65% so that PG&E bills can go down from $400 to $100, like almost everywhere else in the country?
The effective income tax rate for many SF Bay Area techies is around 50%. Do we jack it up to 65% so that PG&E bills can go down from $400 to $100, like almost everywhere else in the country?
The long version would take us far off-topic,
so here’s the short one:
if the tax-paying base collapses, none of this matters.
At that point the debate isn’t about pricing — it’s about survival of the system.
I could outline the full methodology behind this view, but that would turn the thread into a private seminar — and that’s not what comment sections are for.
At that point the debate isn’t about pricing — it’s about survival of the system.
I could outline the full methodology behind this view, but that would turn the thread into a private seminar — and that’s not what comment sections are for.
All the majority of people heard from you is “I pay more taxes”
We’ve become an incredibly selfish nation on average, and until these systems collapse and people get to feel the hot stove, they aren’t going to change their minds about keeping any sort of system or infrastructure in place
We’ve become an incredibly selfish nation on average, and until these systems collapse and people get to feel the hot stove, they aren’t going to change their minds about keeping any sort of system or infrastructure in place
Where do people pay 3-6 cents for electricity in the US?
which country, UAE? :)
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.
That makes sense — but it feels like the balance could be better.
If we treat baseline access as a kind of ‘civilization tax,’ the pricing shouldn’t feel punitive for low-usage households.
If we treat baseline access as a kind of ‘civilization tax,’ the pricing shouldn’t feel punitive for low-usage households.
[deleted]
I don't get it. A very cheap baseline tier would encourage consumption versus what we have today, not reduce it.
Today if I build a cabin somewhere I might decide not to electrify if it costs me $50 per month. But at $10? Sure!
Today if I build a cabin somewhere I might decide not to electrify if it costs me $50 per month. But at $10? Sure!
Then if you do electrify, you'll use electricity instead of less-efficient, more-polluting alternatives.
It's a feature, not a bug.
It's a feature, not a bug.
Not if you would have used solar otherwise, or just went without (like a hunting cabin which is often unheated).
Limit it to one use per SSN (dependents included).
I can only imagine the bureaucrats we could hire to manage it!
And why dependents included? Kids can’t move out? I already see ways to game it.
And why dependents included? Kids can’t move out? I already see ways to game it.
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...
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.
At least with health insurance most companies purchasing insurance for their employees have at least 2 companies to choose from, which gives some incentive to keep costs down. With power companies, there seems to be little market pressure, making any benefits of being privatized minimal at best.
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...
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...
No, that is the obvious problem and it happens right out in front of everyone.
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
All the CPUC rate setting committee discussion minutes are public. You can look up what is discussed.
The regulator gets down to relatively minor capital investments like fence replacement at substations.
The regulator gets down to relatively minor capital investments like fence replacement at substations.
If the government has to approve expenditures and profit margins, there seems to be little reason for a private utility to exist?
There is very little reason for private utilities to exist in California, especially PG&E (none of them are great, but PG*E is especially bad), which keeps funding lavishly to lobby against expansion of public utility coverage areas, committing homicide, and going bankrupt only to be resurrected in an endless cycle of nonsense.
Without the private sector utility company, there wouldn't be a mechanism to raise funds from and pay profits to shareholders.
Sure there would be; raise funds: tax, pay profits: reduce tax / tax breaks. The real differentiator is in the ability to choose who your shareholders are with less scrutiny.
I tend to agree, but that's a collective decision and action problem, which we have difficulty with as a society today.
Archive link: https://archive.is/LkHqZ
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?
Is part of the 10% profit going to these costs? Or since they're an expense it's not apart of the 10% profit?
> It sounds like Edison has a lot of risk mitigation of wildfires, and is dealing wit a lot of litigation.
They made their own bed. https://www.latimes.com/environment/story/2025-12-17/edison-...
Seems like it's unfair to ask the public to foot the bill for problems they caused in part because they wanted to stuff their pockets with cash instead of investing money in keeping their services up.
They made their own bed. https://www.latimes.com/environment/story/2025-12-17/edison-...
Seems like it's unfair to ask the public to foot the bill for problems they caused in part because they wanted to stuff their pockets with cash instead of investing money in keeping their services up.
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?
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?
> 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.
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.
It’s certainly not risk-free. PG&E went bankrupt twice. There will be more wildfires. It could happen again.
Also, much of the point of having shareholders is that they take the risk. If something goes wrong, they lose their money first.
Also, much of the point of having shareholders is that they take the risk. If something goes wrong, they lose their money first.
So what's the point of keeping them if they get to keep on going bankrupt while their CEO made $17 million in 2023?
https://www.sfchronicle.com/california/article/pge-ceo-pay-p...
https://www.sfchronicle.com/california/article/pge-ceo-pay-p...
The point of all this is that PG&E sometimes needs to raise money. They do get money from customers paying their bills, but they often to raise money many years sooner than that. Selling bonds and selling stock are two ways of doing it, with different tradeoffs for investors. Stock might sometimes pay a higher dividend, but dividends aren’t guaranteed.
After the last bankruptcy, PG&E suspended dividends for six years, from 2018 to 2023.
https://investor.pgecorp.com/shareholders/dividend-informati...
No matter how good or bad management is, they’re still going to need to raise money. Bad management means more mistakes and then more money needs to be raised.
Bad management might get fired, but they’re not going to pay for their mistakes. The money needs to come from somewhere else.
After the last bankruptcy, PG&E suspended dividends for six years, from 2018 to 2023.
https://investor.pgecorp.com/shareholders/dividend-informati...
No matter how good or bad management is, they’re still going to need to raise money. Bad management means more mistakes and then more money needs to be raised.
Bad management might get fired, but they’re not going to pay for their mistakes. The money needs to come from somewhere else.
Why should shareholders be taking on the risk of a city's power grid failing? Does packaging that risk as an investment opportunity somehow produce incentives to improve grid reliability and guide resources to be used efficiently?
PG&E emerged from their most recent bankruptcy with more debt than they entered with! This was largely because of the wildfire liabilities - $30 billion. In more direct terms, the lucky Californians are paying the unlucky Californians, and it was financed by bonds which used PG&E's existing assets as collateral (which for some reason weren't already collateralized.)
The best case for Californians overall would have been PG&E's debt and equity to go as close to 0 as possible, and all that extra debt have been used to actually upgrade the aging electricity infrastructure. Instead you are paying interest on past fire damage claims.
In 2018 PG&E had about $18b of long term debt, they now have just under $59b. Their outstanding shares also quadrupled. The bankruptcy didn't wipe out the equity, but investors got f'd hard if they thought they were acting conservatively. Would you accept a 1.25%ish dividend with the prospects of the stock going to 0 higher than it doubling in the next 10 years?
For all of the whiners about how utility investors shouldn't make any money, and possibly earn below their cost of capital, -- I spent some time looking at the utility industry over the last few years (including PG&E.) These are basically money pits which more money goes in than comes out over decades.
The other layer here is if the billions of dollars being borrowed are to build new infrastructure results in billions more in future liabilities to maintain everything. The first layer looked so bad I didn't go any further.
The petty dividend payouts utilities make just keep the equity investors from examining what they really own. Higher equity valuations let utilities borrow money cheaper than they really should be able to.
Functionally the whole thing looks like a ponzi scheme that perhaps could only happen with the 40 year run of ever shrinking interest rates. If the bond bull market is over then this utility ponzi scheme is going to blow too.
Bottom line, if investors were paying attention, your utility bills would be a lot higher. If utilities ever have a big problem getting Wall Street to keep funding their debt ponzi, they will be.
The alternative is the state owns the utility. Given how ugly the math is for utilities right now, I doubt it would be cheaper.
On the other hand, if the US is going 100% EV (AI datacenters or not), then there trillions of federal dollars are inbound and maybe utilities will be ok. One thing is for certain, the utilities, their investors (debt & equity) their customers, and the US states don't have the money to pay for all that has to be built.
The best case for Californians overall would have been PG&E's debt and equity to go as close to 0 as possible, and all that extra debt have been used to actually upgrade the aging electricity infrastructure. Instead you are paying interest on past fire damage claims.
In 2018 PG&E had about $18b of long term debt, they now have just under $59b. Their outstanding shares also quadrupled. The bankruptcy didn't wipe out the equity, but investors got f'd hard if they thought they were acting conservatively. Would you accept a 1.25%ish dividend with the prospects of the stock going to 0 higher than it doubling in the next 10 years?
For all of the whiners about how utility investors shouldn't make any money, and possibly earn below their cost of capital, -- I spent some time looking at the utility industry over the last few years (including PG&E.) These are basically money pits which more money goes in than comes out over decades.
The other layer here is if the billions of dollars being borrowed are to build new infrastructure results in billions more in future liabilities to maintain everything. The first layer looked so bad I didn't go any further.
The petty dividend payouts utilities make just keep the equity investors from examining what they really own. Higher equity valuations let utilities borrow money cheaper than they really should be able to.
Functionally the whole thing looks like a ponzi scheme that perhaps could only happen with the 40 year run of ever shrinking interest rates. If the bond bull market is over then this utility ponzi scheme is going to blow too.
Bottom line, if investors were paying attention, your utility bills would be a lot higher. If utilities ever have a big problem getting Wall Street to keep funding their debt ponzi, they will be.
The alternative is the state owns the utility. Given how ugly the math is for utilities right now, I doubt it would be cheaper.
On the other hand, if the US is going 100% EV (AI datacenters or not), then there trillions of federal dollars are inbound and maybe utilities will be ok. One thing is for certain, the utilities, their investors (debt & equity) their customers, and the US states don't have the money to pay for all that has to be built.
Except that the state of California ended up on the hook for the first bankruptcy. The shareholders were the only ones who came out fine. The customers and the state got stuck with the bill.
Exactly what risk did they take on? A few missed dividends, and two years for the stock price to recover?
As for the second bankruptcy, the main result of that was that their customers ended up paying the bill for other customers whose houses were destroyed. But you are partially correct, the shareholders did take a haircut of a few percentage points from stock dilution. I wouldn't be too upset for them, the stock's now double what it was before the bankruptcy.[1]
California's cities wanted them to take a haircut of 100 percentage points, but that clearly didn't happen.
[1] For some reason, the wise stewardship of the shareholders and the board did nothing to mitigate the crisis that caused the company to get sued for 50 billion dollars. They were too busy squeezing dividends out of it to worry about liabilities. [2]
[2] And why should they? They aren't personally liable.
Exactly what risk did they take on? A few missed dividends, and two years for the stock price to recover?
As for the second bankruptcy, the main result of that was that their customers ended up paying the bill for other customers whose houses were destroyed. But you are partially correct, the shareholders did take a haircut of a few percentage points from stock dilution. I wouldn't be too upset for them, the stock's now double what it was before the bankruptcy.[1]
California's cities wanted them to take a haircut of 100 percentage points, but that clearly didn't happen.
[1] For some reason, the wise stewardship of the shareholders and the board did nothing to mitigate the crisis that caused the company to get sued for 50 billion dollars. They were too busy squeezing dividends out of it to worry about liabilities. [2]
[2] And why should they? They aren't personally liable.
Just had to look this one up. PG&E's first bankruptcy was April 6, 2001. Based on the stock price decline prior to that, it looks like their shareholders thought everything was ok in November of 2000 and the stock was $27 (it bottomed out at $8.97 in April of 2001.) As of today, the stock is worth $15.97.
If we go back 30 years to 1995 -- and you invested $10,000 in PG&E and $10,000 in the S&P500, and reinvested the dividends -- today the PG&E investment would be worth $11,708. The S&P investment would be worth $201,420.
To put it in simpler terms, the PG&E investors look like gullible fools.
If we go back 30 years to 1995 -- and you invested $10,000 in PG&E and $10,000 in the S&P500, and reinvested the dividends -- today the PG&E investment would be worth $11,708. The S&P investment would be worth $201,420.
To put it in simpler terms, the PG&E investors look like gullible fools.
1. The stock recovered within 2 years and then shot to the moon.
2. You're not counting all the dividends they've siphoned out.
3. The reason it's at $16 today is because the company destroyed its own value... By prioritizing dividends over maintenance. Which killed a lot of people, destroyed a ton of property, with the damages exceeding the value of the firm. Yet, instead of being zeroed out, the shareholders are still there, still collecting dividends, and in a few years of guaranteed 10% margins, I'm sure the stock will recover.
2. You're not counting all the dividends they've siphoned out.
3. The reason it's at $16 today is because the company destroyed its own value... By prioritizing dividends over maintenance. Which killed a lot of people, destroyed a ton of property, with the damages exceeding the value of the firm. Yet, instead of being zeroed out, the shareholders are still there, still collecting dividends, and in a few years of guaranteed 10% margins, I'm sure the stock will recover.
> The stock recovered within 2 years and then shot to the moon
After the bankruptcy? Did the shareholders maintain their ownership through bankruptcy? Or were the creditors turned into shareholders?
After the bankruptcy? Did the shareholders maintain their ownership through bankruptcy? Or were the creditors turned into shareholders?
They did, through both bankruptcies.
They came out squeaky clean in 2001, keeping all their shares. (Major shout-out to the State of California for bailing them out, and shouldering all the subsequent liabilities from that adventure.)
The second one diluted them by 22%, by creating and giving new stock to the people who won lawsuits against the firm. The stock's up by more than 22% since the impact of the fires on the company was realized...
If they were zeroed out after either bankruptcy, I wouldn't be kvetching, but here we are...
They came out squeaky clean in 2001, keeping all their shares. (Major shout-out to the State of California for bailing them out, and shouldering all the subsequent liabilities from that adventure.)
The second one diluted them by 22%, by creating and giving new stock to the people who won lawsuits against the firm. The stock's up by more than 22% since the impact of the fires on the company was realized...
If they were zeroed out after either bankruptcy, I wouldn't be kvetching, but here we are...
> As for the second bankruptcy, the main result of that was that their customers ended up paying the bill for other customers whose houses were destroyed.
There's half of the major problems. If I walked around covered in gasoline every day and eventually walked past someone smoking, not a lot of people would blame the smoker for me getting engulfed in flames.
Yet build a wood house in a forest maintained for thousands of years by American Indians with fire, require universal electricity supply, and suddenly it's not the homeowner's fault at all. Everyone else should bail them out over and over again.
There's half of the major problems. If I walked around covered in gasoline every day and eventually walked past someone smoking, not a lot of people would blame the smoker for me getting engulfed in flames.
Yet build a wood house in a forest maintained for thousands of years by American Indians with fire, require universal electricity supply, and suddenly it's not the homeowner's fault at all. Everyone else should bail them out over and over again.
Capping margins at a percentage also directly breeds inefficiencies. If you could spend $10M to fix a problem that costs you $4M/yr, you're effectively paying $10M now to lose $400k in annual profit potential.
Just purchased a replacement gas stove/oven because electricity prices in LA are INSANE.
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.
The US average residential electricity price is 18.07 c/kWh [0]. Natural gas is $15.39/thousand cubic ft [1]. 1k cubic feet of gas is about 300kWh (this varies because natural gas is not always the same and because the higher heating value and lower heating value are different. So the US average is about 5c/kWh of natural gas.
In decent weather, one should not use resistive electric heat — one should use a heat pump. In decent weather, a COP of 4 is about par for the course, making electric heat a bit cheaper. So I don’t believe your assertion that “gas is so much cheaper per joule”.
Obviously this varies by what you do with your heat and the conditions. Gas stoves are wildly inefficient, but induction can exceed a COP of 100%. In very very cold weather, heat pump COP drops, so gas will win. Gas tankless water heaters are reasonably priced and can reach well over 90% efficiency, whereas heat pump water heaters need a tank, which is somewhat lossy.
But gas has a major downside (aside from CO2 and other emissions): you need to pipe the stuff to the endpoint, and a lot of communities, especially new developments, have decided that this is not worth the expense or danger.
[0] September 2025: https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...
[1] https://www.eia.gov/naturalgas/monthly/pdf/table_20.pdf
In decent weather, one should not use resistive electric heat — one should use a heat pump. In decent weather, a COP of 4 is about par for the course, making electric heat a bit cheaper. So I don’t believe your assertion that “gas is so much cheaper per joule”.
Obviously this varies by what you do with your heat and the conditions. Gas stoves are wildly inefficient, but induction can exceed a COP of 100%. In very very cold weather, heat pump COP drops, so gas will win. Gas tankless water heaters are reasonably priced and can reach well over 90% efficiency, whereas heat pump water heaters need a tank, which is somewhat lossy.
But gas has a major downside (aside from CO2 and other emissions): you need to pipe the stuff to the endpoint, and a lot of communities, especially new developments, have decided that this is not worth the expense or danger.
[0] September 2025: https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...
[1] https://www.eia.gov/naturalgas/monthly/pdf/table_20.pdf
I'm not sure what physics you're using to get a COP > 1 for an induction stove. I'm pretty sure you could put a Stirling engine on that stove and have a perpetual motion machine. Most of them run about 80-90% compared to 30-40% for gas equivalents, about 2-2.5x more efficient. And this is with expensive, high-end cooktops.
I think heat pumps make sense to use when available, but that's kind of separate from electric heat sources. If you actually have to source your heat from the power source itself, it's cheaper to get it cookies.
I have a heat pump on my house, but there's also a high-efficiency furnace and its COP is over 90% combusting gas.
I think heat pumps make sense to use when available, but that's kind of separate from electric heat sources. If you actually have to source your heat from the power source itself, it's cheaper to get it cookies.
I have a heat pump on my house, but there's also a high-efficiency furnace and its COP is over 90% combusting gas.
Whoops, that was a typo. Gas stoves really are kind of absurdly inefficient, though. You can buy silly pots with heat exchangers on the bottom that do better, though.
The utilities' profit margin should be 0%. There is absolutely no reason why they should be run as profit-seeking enterprises.
> The utilities' profit margin should be 0%
Yet much of America has utilities run for profit with far cheaper rates than California, where PG&E operates as a vertically-integrated regulated monopoly.
Yet much of America has utilities run for profit with far cheaper rates than California, where PG&E operates as a vertically-integrated regulated monopoly.
As a California resident, I'm well aware. But that doesn't change anything; I still believe utilities should be run as non-profits (or co-ops or even just as government agencies, depending on what works best for local conditions).
The real problem in CA is that our governor is in PG&E's pocket, and the body that regulates the utility (with members appointed by the governor) is a textbook example of regulatory capture. I'm not sure why the legislature hasn't done anything about this, but I assume it has something to do with money, there, as well.
At this point I want SF to own its own grid, like Santa Clara and Palo Alto do. Of course, PG&E refuses to play ball with any plan/offer the city has put forth.
The real problem in CA is that our governor is in PG&E's pocket, and the body that regulates the utility (with members appointed by the governor) is a textbook example of regulatory capture. I'm not sure why the legislature hasn't done anything about this, but I assume it has something to do with money, there, as well.
At this point I want SF to own its own grid, like Santa Clara and Palo Alto do. Of course, PG&E refuses to play ball with any plan/offer the city has put forth.
> that doesn't change anything; I still believe utilities should be run as non-profits
That's a valid position. My utility is a member-owned coöperative [1]. It pays me a dividend every year that I have the option of investing back into it for a return.
But that's not why its power is 10x cheaper than California's, despite my buying exclusively wind and hydro.
[1] https://www.lvenergy.com/my-account/unclaimed-patronage-capi...
That's a valid position. My utility is a member-owned coöperative [1]. It pays me a dividend every year that I have the option of investing back into it for a return.
But that's not why its power is 10x cheaper than California's, despite my buying exclusively wind and hydro.
[1] https://www.lvenergy.com/my-account/unclaimed-patronage-capi...
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.
> 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.
I have a hard time believing this; in the Bay Area, the privilege of simply having a 200A connection is $130/month.
> I have a hard time believing this; in the Bay Area, the privilege of simply having a 200A connection is $130/month.
I have a hard time believing that; that's not how PUC-regulated electric rates work in California (neither the old system nor the new system has a panel capacity component.)
I have a hard time believing that; that's not how PUC-regulated electric rates work in California (neither the old system nor the new system has a panel capacity component.)
FWIW, one source is https://www.eia.gov/electricity/sales_revenue_price/pdf/tabl...
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).
Where? My minimum delivery charge is $0.41 a day.
Do many people in the bay area have 200A service? In the past 21 years, everywhere I've lived here was 100A.
Excuse me? This is the basic rate:
https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED...
You pay $0.40317/day for the connection but you get back $58.23 twice per year. That’s $30.70 per year.
It’s the price of the electricity that’s ridiculous in PG&E territory, not the price of the connection.
Note that many commercial users have a very different structure and pay monthly for their peak usage, measured over a 15 minute interval, and separately for their actual energy usage. So if you get a commercial 200A connection, max it out for 15 minutes, and then leave it idle for the rest of the month, you may pay something silly.
https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED...
You pay $0.40317/day for the connection but you get back $58.23 twice per year. That’s $30.70 per year.
It’s the price of the electricity that’s ridiculous in PG&E territory, not the price of the connection.
Note that many commercial users have a very different structure and pay monthly for their peak usage, measured over a 15 minute interval, and separately for their actual energy usage. So if you get a commercial 200A connection, max it out for 15 minutes, and then leave it idle for the rest of the month, you may pay something silly.
> 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?
This comes off very much as "stop being poor lol." Was that your intent?
Not to pile on, but this is a similar vibe to people telling others to stop complaining about gas prices and just get an EV.
Some people can't afford a $38k car, heck, for some even $10k for a car is out of reach. There are people who have no choice but to buy a 20 year old ICE vehicle and pray it doesn't die. These same folks suffer due to the regressive nature of fuel tax.
Some people can't afford a $38k car, heck, for some even $10k for a car is out of reach. There are people who have no choice but to buy a 20 year old ICE vehicle and pray it doesn't die. These same folks suffer due to the regressive nature of fuel tax.
I don't see how you could have gotten that from actually reading what I wrote.
> and they don't get a voice.
That's what did it. I initially interpreted it s "and their opinion shouldn't be counted" where I think you were saying "and they have little to no influence."
That's what did it. I initially interpreted it s "and their opinion shouldn't be counted" where I think you were saying "and they have little to no influence."
> California has high volumetric, margin rates for electricity but the typical monthly electric bill just isn't that high,
Because California (whether residential or overall) uses very little electricity per capita (only Hawai'i uses less.
Because California (whether residential or overall) uses very little electricity per capita (only Hawai'i uses less.
You've been downvoted, but I think that's fairly true. My monthly bill is right around the high end of that median, and I expect a big driver of that is the year-round temperate climate. I don't run the heat much in the winter, and don't even have air conditioning for the summer (though lately I wish I did).
Rewind back to my childhood, living in NJ in the 80s and MD in the 90s. Our utility bill was significantly higher than what I pay now (inflation-adjusted) because the heat and a/c were on constantly for several months each out of the year.
Rewind back to my childhood, living in NJ in the 80s and MD in the 90s. Our utility bill was significantly higher than what I pay now (inflation-adjusted) because the heat and a/c were on constantly for several months each out of the year.
I logged into my PGE and saw this
https://www.pge.com/en/newsroom/currents/energy-savings/pg-e...
shrug they claim prices re going down?
https://www.pge.com/en/newsroom/currents/energy-savings/pg-e...
shrug they claim prices re going down?
American/California confuses my tiny English brain
>be freedom-loving capitalist America >be freedom-loving state of California and electrical engineering centre of the world >the government tells utility companies exactly how much yield they can make >down to a tenth of a percent >don’t worry bro this is about protecting_customers >the yield is on infrastructure and is extremely non-cyclical and effectively backstopped by the state of California. It’s a 30y investment at a time when 30y t bills are at ~5% >sets the yield at 10.3%
What am I missing?
>be freedom-loving capitalist America >be freedom-loving state of California and electrical engineering centre of the world >the government tells utility companies exactly how much yield they can make >down to a tenth of a percent >don’t worry bro this is about protecting_customers >the yield is on infrastructure and is extremely non-cyclical and effectively backstopped by the state of California. It’s a 30y investment at a time when 30y t bills are at ~5% >sets the yield at 10.3%
What am I missing?
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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.
the best escape valve against PG&E and Edison is installing solar panels and a battery.
sure, if you're not in the majority of the population that rents instead of owns a home.
[deleted]
Hopefully California hops on the balcony plug-in solar train in the coming years
I tried to do it a few years ago (condo building). Most installers wouldn't touch buildings with more than 2 floors (we have 5). I assume it's an insurance issue, but was super weird to me since SF has so many buildings (even SFHs) taller than 2 floors.
I did find an installer who claimed they'd do it, but after a site visit -- where the guy taking measurements said everything looked fine -- my sales rep emailed to say they were dropping me as a prospective client, and bizarrely refused to tell me why when I asked.
Then NEM3 took effect and solar-only (with no battery storage) became financially infeasible. I should look around again, probably, since battery prices have gone down... though I'll probably have to wait until reasonable people are in power again nationally, who restore financial incentives for this stuff.
I did find an installer who claimed they'd do it, but after a site visit -- where the guy taking measurements said everything looked fine -- my sales rep emailed to say they were dropping me as a prospective client, and bizarrely refused to tell me why when I asked.
Then NEM3 took effect and solar-only (with no battery storage) became financially infeasible. I should look around again, probably, since battery prices have gone down... though I'll probably have to wait until reasonable people are in power again nationally, who restore financial incentives for this stuff.
Even if advocates got everything they wanted here (6% margin vs 10% margin), that would lower rates by... 1.2 cents. PG&E desperately needs to be reformed into a competent organization, something that nobody in (Newsom) or adjacent to (these advocates) power in California seems to want to do.
https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...