3 Ways to Fix California’s Utility Spending Problem — If Lawmakers Act

Source:Canary Media (external link, opens in a new tab)|By

California lawmakers are once again contending with how to curb the state’s high energy costs as they hurtle toward the end of this year’s legislative session on Aug. 31. So what’s on the table for utility rate reform in the final stretch?  Enter sEnate Bill 905, a complicated package of proposals that are likely to face intense opposition from utilities, which tend to reflexively resist rules that could crimp their profits.

SB 905 represents an important, if somewhat incremental, next step on those efforts, said Matthew Freedman, senior staff attorney at The Utility Reform Network (TURN) one of the state’s most vocal utility ratepayer advocacy groups and a sponsor of the bill. Among the bill’s provisions, a ​“lower return on equity is a pretty big one,” he said.  Utilities earn guaranteed rates of profit on capital investments, which puts upward pressure on customer rates. Anything that can reduce that rate of ​“return on equity,” or ROE, could help limit those increases, he said.

 
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