If a household uses less than the monthly per-capita average, why not cap that baseline at something like $10?
Yes — that gap would need to be subsidized, probably through taxes. But that’s already how grid maintenance works: we socialize the fixed costs while pretending rates are purely volumetric.(and I might be overstating this slightly).
Right now we punish low-usage consumers and reward structural inefficiency. A baseline tier would at least make the incentives coherent.
Then we should socialize that infrastructure as well. Otherwise if we're merely _amortizing_ the costs then a total capacity metric should apply to each user.
A private company shouldn't be allowed to socialize important shared infrastructure simply because a weak PUC pretends to engage in oversight.
A layered mix — county-level public utilities, some private operators, and some hybrid/municipal entities — might be closer to a resilient structure.
Not clean or elegant, but fault-tolerant.
That’s why I offered one possible implementation as a hypothesis, not as a law of nature.
If you have a better non-ideal, real-world design in mind, I’d be interested to hear it — it makes the discussion much easier.
The problem with PG&E isn't the rate structure, which isn't all that different from utilities anywhere else in the world. It's that their costs are exceedingly high, through a combination of regulatory pressures and grift. This is exacerbated by municipal and state regulators who are pushing consumers to be more reliant on electric power (bans on gas appliances in new construction, pushes toward EVs, etc).
There are vast swathes of the country where people pay 5-10x less for electricity.
If the floor is gentle, people can actually reduce usage without feeling punished for doing the right thing.
At the moment the baseline tier feels… maybe a “C-rating” version of what a real baseline could be?
The effective income tax rate for many SF Bay Area techies is around 50%. Do we jack it up to 65% so that PG&E bills can go down from $400 to $100, like almost everywhere else in the country?
At that point the debate isn’t about pricing — it’s about survival of the system.
I could outline the full methodology behind this view, but that would turn the thread into a private seminar — and that’s not what comment sections are for.
We’ve become an incredibly selfish nation on average, and until these systems collapse and people get to feel the hot stove, they aren’t going to change their minds about keeping any sort of system or infrastructure in place
If we treat baseline access as a kind of ‘civilization tax,’ the pricing shouldn’t feel punitive for low-usage households.
Today if I build a cabin somewhere I might decide not to electrify if it costs me $50 per month. But at $10? Sure!
It's a feature, not a bug.
Even if advocates got everything they wanted here (6% margin vs 10% margin), that would lower rates by... 1.2 cents. PG&E desperately needs to be reformed into a competent organization, something that nobody in (Newsom) or adjacent to (these advocates) power in California seems to want to do.
https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...
Recall that it was so important for Newsom to attend that dinner at the height of COVID because it was Jason Kinney's 50th birthday party, a PG&E lobbyist and close advisor to Newsom.
The CA Governor is the one who selects the people on the committee that regulate PG&E.
And the same committee approves PG&E’s budget and rate each year, all the way down to the fine details such as repairing an electrical fence at a substation.
This problem is entirely under the control of Newsom and the CA legislature yet they seem completely uninterested in fixing it.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
- Upton Sinclair, I, Candidate for Governor: And How I Got Licked (1935)
Ironically that quote came from a book about Sinclair's failed bid to win the CA governorship...
This comes down to having quality regulators on your public utility commission which is heavily state dependent.
https://www.multistate.us/insider/2025/10/27/nine-states-fac...
The regulator gets down to relatively minor capital investments like fence replacement at substations.
Is part of the 10% profit going to these costs? Or since they're an expense it's not apart of the 10% profit?
They made their own bed. https://www.latimes.com/environment/story/2025-12-17/edison-...
Seems like it's unfair to ask the public to foot the bill for problems they caused in part because they wanted to stuff their pockets with cash instead of investing money in keeping their services up.
Why on earth is a government-protected monopoly entitled to 10% margins? Or even 6% margins? It's risk-free money with a captive market.
What is the point of all this bullshit? Why not just call it a day, and run it as a crown corporation?
> The companies pointed to the January wildfires in Los Angeles County, saying they needed to provide their shareholders with more profit to get them to continue to invest in their stock because of the threat of utility-caused fires in California.
What utter nonsense. The shareholders need nothing. Take out a bloody loan.
The firm's entire concern, as reflected in the article - is it's stock price.
> Under the state’s system for setting electric rates, investors provide part of the money needed to build the infrastructure and then earn an annual return on that investment over the assets’ life, which can be 30 or 40 years.
Wait, why is this financed by investors and not lenders, like it is in the rest of the civilized world? Is this some kind of novel California-specific innovation, and if it is, what value has it produced for the world?
Indeed, how do they pick any margin? If higher is better, why not pick 1000%? If lower is better, why not pick 0%? If we want something reasonable, why not make it market based to figure out what people think when they have to stump up real resources themselves? Once profit margins are set by committee decision there is little point trying to claim that the concern is profit motivated. The profits aren't doing much useful signalling. It just sounds stupid.
Also, much of the point of having shareholders is that they take the risk. If something goes wrong, they lose their money first.
https://www.sfchronicle.com/california/article/pge-ceo-pay-p...
The best case for Californians overall would have been PG&E's debt and equity to go as close to 0 as possible, and all that extra debt have been used to actually upgrade the aging electricity infrastructure. Instead you are paying interest on past fire damage claims.
In 2018 PG&E had about $18b of long term debt, they now have just under $59b. Their outstanding shares also quadrupled. The bankruptcy didn't wipe out the equity, but investors got f'd hard if they thought they were acting conservatively. Would you accept a 1.25%ish dividend with the prospects of the stock going to 0 higher than it doubling in the next 10 years?
For all of the whiners about how utility investors shouldn't make any money, and possibly earn below their cost of capital, -- I spent some time looking at the utility industry over the last few years (including PG&E.) These are basically money pits which more money goes in than comes out over decades.
The other layer here is if the billions of dollars being borrowed are to build new infrastructure results in billions more in future liabilities to maintain everything. The first layer looked so bad I didn't go any further.
The petty dividend payouts utilities make just keep the equity investors from examining what they really own. Higher equity valuations let utilities borrow money cheaper than they really should be able to.
Functionally the whole thing looks like a ponzi scheme that perhaps could only happen with the 40 year run of ever shrinking interest rates. If the bond bull market is over then this utility ponzi scheme is going to blow too.
Bottom line, if investors were paying attention, your utility bills would be a lot higher. If utilities ever have a big problem getting Wall Street to keep funding their debt ponzi, they will be.
The alternative is the state owns the utility. Given how ugly the math is for utilities right now, I doubt it would be cheaper.
On the other hand, if the US is going 100% EV (AI datacenters or not), then there trillions of federal dollars are inbound and maybe utilities will be ok. One thing is for certain, the utilities, their investors (debt & equity) their customers, and the US states don't have the money to pay for all that has to be built.
Exactly what risk did they take on? A few missed dividends, and two years for the stock price to recover?
As for the second bankruptcy, the main result of that was that their customers ended up paying the bill for other customers whose houses were destroyed. But you are partially correct, the shareholders did take a haircut of a few percentage points from stock dilution. I wouldn't be too upset for them, the stock's now double what it was before the bankruptcy.[1]
California's cities wanted them to take a haircut of 100 percentage points, but that clearly didn't happen.
[1] For some reason, the wise stewardship of the shareholders and the board did nothing to mitigate the crisis that caused the company to get sued for 50 billion dollars. They were too busy squeezing dividends out of it to worry about liabilities. [2]
[2] And why should they? They aren't personally liable.
If we go back 30 years to 1995 -- and you invested $10,000 in PG&E and $10,000 in the S&P500, and reinvested the dividends -- today the PG&E investment would be worth $11,708. The S&P investment would be worth $201,420.
To put it in simpler terms, the PG&E investors look like gullible fools.
2. You're not counting all the dividends they've siphoned out.
3. The reason it's at $16 today is because the company destroyed its own value... By prioritizing dividends over maintenance. Which killed a lot of people, destroyed a ton of property, with the damages exceeding the value of the firm. Yet, instead of being zeroed out, the shareholders are still there, still collecting dividends, and in a few years of guaranteed 10% margins, I'm sure the stock will recover.
There's half of the major problems. If I walked around covered in gasoline every day and eventually walked past someone smoking, not a lot of people would blame the smoker for me getting engulfed in flames.
Yet build a wood house in a forest maintained for thousands of years by American Indians with fire, require universal electricity supply, and suddenly it's not the homeowner's fault at all. Everyone else should bail them out over and over again.
It didn't quite manage to blame the smoker, but it did get everyone else to foot the bill for the burn ward and the hospital stay.
In decent weather, one should not use resistive electric heat — one should use a heat pump. In decent weather, a COP of 4 is about par for the course, making electric heat a bit cheaper. So I don’t believe your assertion that “gas is so much cheaper per joule”.
Obviously this varies by what you do with your heat and the conditions. Gas stoves are wildly inefficient, but induction can exceed a COP of 100%. In very very cold weather, heat pump COP drops, so gas will win. Gas tankless water heaters are reasonably priced and can reach well over 90% efficiency, whereas heat pump water heaters need a tank, which is somewhat lossy.
But gas has a major downside (aside from CO2 and other emissions): you need to pipe the stuff to the endpoint, and a lot of communities, especially new developments, have decided that this is not worth the expense or danger.
[0] September 2025: https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...
I think heat pumps make sense to use when available, but that's kind of separate from electric heat sources. If you actually have to source your heat from the power source itself, it's cheaper to get it cookies.
I have a heat pump on my house, but there's also a high-efficiency furnace and its COP is over 90% combusting gas.
https://www.pge.com/en/newsroom/currents/energy-savings/pg-e...
shrug they claim prices re going down?
>be freedom-loving capitalist America >be freedom-loving state of California and electrical engineering centre of the world >the government tells utility companies exactly how much yield they can make >down to a tenth of a percent >don’t worry bro this is about protecting_customers >the yield is on infrastructure and is extremely non-cyclical and effectively backstopped by the state of California. It’s a 30y investment at a time when 30y t bills are at ~5% >sets the yield at 10.3%
What am I missing?
the best escape valve against PG&E and Edison is installing solar panels and a battery.
Because California (whether residential or overall) uses very little electricity per capita (only Hawai'i uses less.
I have a hard time believing this; in the Bay Area, the privilege of simply having a 200A connection is $130/month.
I have a hard time believing that; that's not how PUC-regulated electric rates work in California (neither the old system nor the new system has a panel capacity component.)
https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED...
You pay $0.40317/day for the connection but you get back $58.23 twice per year. That’s $30.70 per year.
It’s the price of the electricity that’s ridiculous in PG&E territory, not the price of the connection.
Note that many commercial users have a very different structure and pay monthly for their peak usage, measured over a 15 minute interval, and separately for their actual energy usage. So if you get a commercial 200A connection, max it out for 15 minutes, and then leave it idle for the rest of the month, you may pay something silly.
This comes off very much as "stop being poor lol." Was that your intent?
Some people can't afford a $38k car, heck, for some even $10k for a car is out of reach. There are people who have no choice but to buy a 20 year old ICE vehicle and pray it doesn't die. These same folks suffer due to the regressive nature of fuel tax.
That's what did it. I initially interpreted it s "and their opinion shouldn't be counted" where I think you were saying "and they have little to no influence."