Pacific Gas and Electric (PG&E) is asking California regulators to raise its rates in order to pay more money back to the utility’s investors.
PG&E submitted its 2026 Cost of Capital application to the California Public Utilities Commission (CPUC) on Thursday to raise rates starting next year.
Driving the news: Utilities in California submit their Cost of Capital applications to the CPUC every three years.
- The Cost of Capital is the cost of what a utility has used to finance capital investments.
- Investors, who provide money up-front to PG&E, are able to make more profit through the Cost of Capital increases.
The big picture: PG&E has requested an increase of around $5.50 per month for residential customers.
- That would set an 11.3% return on equity for investors.
- The rate increase, if approved, would start on Jan. 1, 2026.
- PG&E said it pays the lowest dividend in the utility industry and reinvests 97% of what it earns back into the company.
The other side: The Utility Reform Network (TURN), a consumer advocacy group, is pushing back against PG&E and urging the state to reject the request for an increase.
- TURN is asking the CPUC to decrease the 10.6% rate of profit that California utilities are currently receiving.
- TURN is also asking the CPUC to stop approving costly infrastructure projects that inflate rates and is urging the Legislature to change the system to eliminate profits from essential infrastructure investments.
- “California utilities are driving an affordability crisis, with families paying billions in excessive costs while investor profits soar,” said TURN communications director Lee Trotman. “As PG&E, SoCal Edison, and SDG&E submit their cost of capital proposals today, the California Public Utilities Commission must take bold action to lower bills by tackling the root cause of skyrocketing rates: guaranteed profits that reward utilities for spending more, not spending wisely.”
