California's average residential electricity rate is almost twice the US average (32 cents vs 18 cents) despite being in a state with abundant energy resources.
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.
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 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.
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 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.
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.
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.
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.
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.
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.
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
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?
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?
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.
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.
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.
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.
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%
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.
benced|2 months ago
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...
refurb|2 months ago
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.
nebula8804|2 months ago
fulafel|2 months ago
autoexec|2 months ago
ursAxZA|2 months ago
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.
themafia|2 months ago
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.
nospice|2 months ago
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.
labcomputer|2 months ago
unknown|2 months ago
[deleted]
refurb|2 months ago
Today if I build a cabin somewhere I might decide not to electrify if it costs me $50 per month. But at $10? Sure!
aidenn0|2 months ago
amanaplanacanal|2 months ago
ar0b|2 months ago
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|2 months ago
Rebelgecko|2 months ago
RheingoldRiver|2 months ago
fusslo|2 months ago
Is part of the 10% profit going to these costs? Or since they're an expense it's not apart of the 10% profit?
autoexec|2 months ago
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.
vkou|2 months ago
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?
frugalmail|2 months ago
pclmulqdq|2 months ago
kelnos|2 months ago
JumpCrisscross|2 months ago
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.
jeffbee|2 months ago
youarentrightjr|2 months ago
I have a hard time believing this; in the Bay Area, the privilege of simply having a 200A connection is $130/month.
orthecreedence|2 months ago
This comes off very much as "stop being poor lol." Was that your intent?
dragonwriter|2 months ago
Because California (whether residential or overall) uses very little electricity per capita (only Hawai'i uses less.
kelnos|2 months ago
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.
aschobel|2 months ago
https://www.pge.com/en/newsroom/currents/energy-savings/pg-e...
shrug they claim prices re going down?
flave|2 months ago
>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?
unknown|2 months ago
[deleted]
doctorpangloss|2 months ago
the best escape valve against PG&E and Edison is installing solar panels and a battery.
JohnMakin|2 months ago
kelnos|2 months ago
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.