OAKLAND — State regulators Thursday reined within the revenue returns that shareholders of PG&E and different utility suppliers can harvest, a choice that didn’t quell a debate over whether or not clients can simply afford to pay their month-to-month electrical and gasoline payments.
The state Public Utilities Fee voted 4-1 to approve barely decrease charges of return for shareholders beginning in 2026 in comparison with present ranges.
“Today’s decision does not set rates, but it does affect customer bills over time,” PUC President and Commissioner Alice Reynolds mentioned earlier than voting to approve the brand new capital value and fee of return construction for PG&E, Southern California Edison, San Diego Gasoline & Electrical, and Southern California Gasoline Co.
Within the wake of the choice, PG&E mentioned month-to-month electrical energy payments are decrease than they had been in the beginning of 2024. The investor-owned utility predicted that prices for electrical energy clients would drift decrease in 2026 in comparison with now.
For PG&E, the brand new most return on fairness can be 9.98%, which is a bit decrease than the present 10.28% return on fairness, in line with the corporate and the PUC. This equates to a barely better curb on income.
PUC Commissioner Darcie Houck, who voted towards the brand new return on fairness, expressed concern that the fee’s motion doesn’t adequately defend ratepayers from future jumps in month-to-month payments.
“This decision does not quite strike the right balance in addressing customer costs,” Houck mentioned earlier than casting the only real no vote.
State regulators famous that PG&E and its utility siblings should be capable of provide shareholders and buyers a sufficiently strong fee of return to draw the capital the businesses have to finance an array of essential necessities.
“Energy service is capital-intensive,” PUC Commissioner John Reynolds mentioned earlier than voting sure. “Wires and poles, generators and transformers, pipelines and compressors, labor and equipment” are amongst these bills, he added.
A decrease fee of return reduces the income that utilities could make on their investments of their programs and operations, equivalent to mitigating wildfire dangers. The decrease return ranges can ease upward strain on future month-to-month payments.
The fee’s vote displeased each PG&E and shopper advocates.
“PG&E is disappointed that the final decision fails to acknowledge current elevated risks to help attract the needed investment for California’s energy systems,” PG&E mentioned in a press release. “We will keep working with regulators and state leaders to ensure adequate funding needs and reasonable long-term rates for customers so we can continue stabilizing our energy prices and funding critical energy system improvements for customers.”
The Utility Reform Community additionally disagreed with the choice — as a result of the PUC didn’t sufficiently cut back PG&E’s fee of return.
At one level, state regulators had been contemplating decreasing the return on fairness to someplace round 6% however then determined to lean extra towards the ten% stage of their ultimate determination, PUC observers have acknowledged.
“Revising the decision in favor of utility shareholders is more than just buckling under pressure from PG&E and other major utilities,” TURN Government Director Mark Toney mentioned. “It is part of a disturbing pattern of commissioners disregarding proposals to address the affordability crisis.”
Toney urged state politicians to step in and assist utility clients.
“This is a clear sign that the Legislature needs to take more action to address the affordability crisis, because the CPUC has failed to do so,” Toney mentioned.
Amid the controversy, PG&E acknowledged that the common residential buyer will proceed to expertise decrease month-to-month payments for electrical energy.
“We take our responsibility seriously, and we are working hard to lower our prices,” PG&E acknowledged. “We are making progress.”
PG&E’s month-to-month electrical invoice for a typical residential buyer who makes use of about 500 kilowatt hours is about $12 decrease than it was in January 2024, the utility estimated.
“Additionally, electric rates and bills for customers who receive energy supply and delivery from PG&E are expected to go down again in 2026,” PG&E acknowledged.
