3 ms·

Why wouldn't the right thing to do be giving it back to the ratepayers through reduced rates or credits? If the utility underestimated the cost of providing se

Why wouldn't the right thing to do be giving it back to the ratepayers through reduced rates or credits? If the utility underestimated the cost of providing service, they'll petition the PUC to raise rates, so if they overestimated the cost of providing service, why shouldn't they give it back rather than treating it as a windfall to be distributed to investors? I'm fine with a public utility getting a reasonable regulated profit, but if they collect more money than they needed to cover expenses, it should go back to the ratepayers. Otherwise the company is just being rewarded for overestimating expenses.

sokoloff 3y ago
> reasonable regulated profit, but if they collect more money than they needed to cover expenses I’m not seeing a categorical difference between these two things, assuming the utility tariffs are subject to approval. The money they receive that is more than their expenses is their profit. Over time, you tweak the rate increases to get the same outcome as “reasonable profit”
- Johnny555 3y ago
  What's why I said "regulated profit" -- if they get to keep all money received above expenses, then they'll do what PG&E did and ask the PUC to set rates to include money for pipeline improvements or tree trimming, but then not actually spend the money and instead return it to investors.
  - mistrial9 3y ago
    when Enron took advantage of California market deregulation, and the consumer power market actually failed.. a scramble ensued in Sacramento and elsewhere.. many rocks were turned over in short order. It was discovered that, despite countless regulations, full-time oversight and public review, the upper management at PG&E had found a way to transfer real assets to the books of a second groups of companies, and expanded that to purchase power generation facilities across the US. It was expressly forbidden at every step, and it was discovered because the de-regulation failures had made an actual panic situation. The "left" press in San Francisco had run accusatory media stories for thirty years, but yet management was able to do this. source- attorney involved in private hearings in Sacramento on the PG&E company structure
    - sidewndr46 3y ago
      can you disclose any of the case numbers about this? It sounds really interesting.

sokoloff 3y ago

> reasonable regulated profit, but if they collect more money than they needed to cover expenses I’m not seeing a categorical difference between these two things, assuming the utility tariffs are subject to approval. The money they receive that is more than their expenses is their profit. Over time, you tweak the rate increases to get the same outcome as “reasonable profit”

Johnny555 3y ago
What's why I said "regulated profit" -- if they get to keep all money received above expenses, then they'll do what PG&E did and ask the PUC to set rates to include money for pipeline improvements or tree trimming, but then not actually spend the money and instead return it to investors.
- mistrial9 3y ago
  when Enron took advantage of California market deregulation, and the consumer power market actually failed.. a scramble ensued in Sacramento and elsewhere.. many rocks were turned over in short order. It was discovered that, despite countless regulations, full-time oversight and public review, the upper management at PG&E had found a way to transfer real assets to the books of a second groups of companies, and expanded that to purchase power generation facilities across the US. It was expressly forbidden at every step, and it was discovered because the de-regulation failures had made an actual panic situation. The "left" press in San Francisco had run accusatory media stories for thirty years, but yet management was able to do this. source- attorney involved in private hearings in Sacramento on the PG&E company structure
  - sidewndr46 3y ago
    can you disclose any of the case numbers about this? It sounds really interesting.