State Regulator Recommends Smaller Profit Rate for SDG&E

Source: The San Diego Union-Tribune  |  By Rob Nikolewski

Investor-owned utilities in California — including San Diego Gas & Electric — will earn smaller rates of profit on their infrastructure projects next year under a proposed decision that will soon go before the five voting members of the California Public Utilities Commission. In SDG&E’s case, what’s called the utility’s “return on equity” would drop from 10.23% in 2026 to 9.88% under the figures released late last week. It’s difficult to say what the lower rate would mean for the monthly bills that SDG&E customers pay, but the pending vote comes at a time when high rates have become a major concern across California and in the San Diego area in particular.

“We do think (reducing the return from 10.23% to 9.88% is) a step in the right direction, but so much more needs to be done in terms of affordability,” said Mark Toney, executive director at The Utility Reform Network (TURN),  the Oakland-based organization that frequently weighs in on CPUC matters. TURN called for a return on equity of 9.5% for SDG&E.Toney emphasized that while the percentages that utilities earn are important, another crucial factor is the accumulated costs that power companies spend on expensive projects that get passed to ratepayers. And the the CPUC has final approval on whether those projects get the green light.