California utility regulator takes a swipe at shareholder profits

By Wes Venteicher | 10/18/2024 06:26 AM EDT

The California Public Utilities Commission’s change is expected to save ratepayers $360 million.

Central Maine Power transmission lines stretch above the treetops.

The California Public Utilities Commission made a change to the way utilities’ investment returns are adjusted Oct. 17. Robert F. Bukaty/AP

SACRAMENTO, California — The California Public Utilities Commission took a nibble out of utility shareholders’ profits for next year and handed it to ratepayers with a tweak to an earnings formula Thursday.

The commission approved a proposal to shrink utilities’ return-on-equity Jan. 1, a year earlier than the reduction would otherwise have occurred. The Utility Reform Network, which advocated for the change, estimates it will save ratepayers $360 million. (The CPUC itself declined to provide an estimate.)

While it’s a small amount of money relative to utilities’ overall spending (the state’s three big investor-owned utilities were authorized to collect a combined total of roughly $35 billion from ratepayers in 2022 to cover costs), the change reflects the pressure on the CPUC to find ratepayer savings amid a rising affordability crisis.

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Driven primarily by wildfire spending and infrastructure investments, California utility bills have shot up as much as 110 percent over the last decade. The state’s residents are increasingly calling in to legislators’ offices — and to CPUC hearings — to express their anger over the rising bills.

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