California utility regulators on Friday recommended trimming investor-owned utilities’ profit margins, in a proposal that split the difference between utilities’ and ratepayer advocates’ requests.
What happened: The California Public Utilities Commission’s proposed decision would allow Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to recoup less than 10 percent returns on equity.
The proposal from CPUC Administrative Law Judge Jonathan Lakey recommended returns on equity of between 9.73 and 9.98 percent for the three utilities. That’s more than a full percentage point lower than what the utilities had asked — but also at least half a percentage point higher than what ratepayer advocates and environmental groups had argued.
Why it matters: The number is a bit of a proxy battle over California’s energy future; broadly, ratepayer advocates have zeroed in on lowering the number as a way to keep politically toxic monthly electric bills in check, but utilities say they need a higher number to be able to make needed investments in wildfire protection and renewable energy.
