Many customers are unaware that a portion of their monthly utility bill compensates shareholders through a mechanism called return on equity. This return is determined by state regulators and often exceeds common economic benchmarks, resulting in significant costs for consumers. In California, approved rates hover around 10%, which critics argue are excessive. These rates contribute to a substantial cost burden for customers, amounting to hundreds of millions annually. Experts emphasize the need to consider the broader implications of these rates, suggesting they may be exaggerated by utility companies.
"It's easy to look at a single utility and go, 'well this rate makes sense for this utility' and miss the broader implications(but)... It's kind of like missing the forest for the trees."
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