The commission that regulates California’s utilities just approved a lower investor return rate for the next two years. That can affect costs to customers, but it’s not clear if it will reduce their monthly bills.
Pacific Gas and Electric, or PG&E, will have to compensate investors for infrastructure projects at this new, lower rate. It’s now set to just under 10% — lower than what PG&E requested, and the lowest rate since 2006.
The California Public Utilities Commission, or CPUC, voted on the decision December 18.
The commission released a statement that said a lower rate doesn’t necessarily lower costs for customers.
“...[A]ctual bill impacts depend on what investments utilities make and what future infrastructure projects the CPUC approves in separate proceedings,” the statement said.
Mark Toney is the executive director of The Utility Reform Network. He said the new rate is only a little higher than what he had hoped, but that rate decrease is negligible next to the amount spent on expensive projects like PG&E burying their power lines. Toney still expects that customers’ monthly bills will continue to go up.
“One way to think about it is you're going to pay more monthly if you have a mortgage on a $2 million home than a $1 million home, even if you get a better interest rate for the larger home,” Toney said.
CPUC also set returns on equity for three other utilities: Southern California Gas Company, San Diego Gas & Electric and Southern California Edison.
