For Immediate Release From The Utility Reform Network

TURN said today that a CPUC decision lowering utility profit rates, as TURN had urged, means lower bills statewide. TURN and other consumer advocates and customer representatives had urged to Commission to put a stop to inflated utility profits awarded by the CPUC and paid by customers. The four large energy utilities collect about $3 billion in profits from ratepayer customers each year.

Utility companies have been collecting over 11% return on capital investments, including power plants, electric wires, office buildings, smart meters, and gas pipelines that they borrow money to finance. In addition to paying the principal and interest over many years, customers pay the utilities a profit on all shareholder funds that are invested in capital projects.

TURN alleged that California utilities were collecting higher profits than their counterparts elsewhere U.S., even though they faced lower risks. Rather than set a rate of return based on the low risks California utilities face, the CPUC has kept profits unnecessarily high.

“The Commission was spoiling the utilities, awarding them windfall profits for no good reason” said TURN executive director Mark Toney.

“Reducing utility profits means money in every customers’ pocket, with no impact on safety or customer service,” Toney added. “The reductions customers will see in their monthly bills will make it clear how much inflated profits were driving bills up."

Every single customer of PG&E, SCE, SDG&E and SoCal Gas will pay lower bills as a result of TURN’s advocacy.