State regulators vote to keep utility profits high, angering customers across California

"Despite complaints from customers about rising electric bills, the California Public Utilities Commission voted 4 to 1 on Thursday to keep profits at Southern California Edison and the state's other big investor-owned utilities at a level that consumer groups say has long been inflated. The commission vote will slightly decrease the profit margins of Edison and three other big utilities beginning next year. Edison's rate will fall to 10.03% from 10.3%."

"Customers will see little impact in their bills from the decision. Because the utilities are continuing to spend more on wires and other infrastructure - capital costs that they earn profit on - that portion of customer bills is expected to continue to rise. The vote angered consumer groups that had detailed in filings and hearings at the commission how the utilities' return on equity - which sets the profit rate that the companies' shareholders receive - had long been too high."

"Among those testifying on behalf of consumers was Mark Ellis, the former chief economist for Sempra, the parent company of San Diego Gas & Electric and Southern California Gas. Ellis estimated that the companies' profit margin should be closer to 6%. He argued in a filing that the California commission had for years authorized the utilities to earn an excessive return on equity, resulting in an "unnecessary and unearned wealth transfer" from customers to the companies."

The California Public Utilities Commission voted 4-1 to retain profit returns for Southern California Edison and other major investor-owned utilities near 10%, with Edison’s return falling to 10.03% from 10.3%. Electric rates in California have surged over 40% in three years, making them second-highest nationally after Hawaii. The decision will have little immediate impact on bills because rising utility capital spending on wires and infrastructure, which earn profit, will continue to push that portion of bills upward. Consumer groups protested, arguing returns have been excessive and that lowering them toward 6% would save customers significant sums.

Read at Los Angeles Times