4 ms·

Is there any evidence for how they’re wasting such a huge amount of money year after year?

sb057 2y ago
The fact that they charge significantly more money than virtually every other utility company in the country (and indeed, within California) with comparable margins is pretty good evidence I feel.
- MichaelZuo 2y ago
  How is that evidence? The expectations, regulations, and imposed demands, are not 100% identical across all utilities. So any combination of factors could lead to higher prices.
_heimdall 2y ago
Maybe I'm naive here, but isn't any company at a similar scale regularly finding ways to reduce profits on paper? Taxes add up fast when you don't have expenses to write off, and my understanding was that most effective ways to reduce tax liability would also reduce profit margins.
- MichaelZuo 2y ago
  Why are you asking me when their financial statements are available online for you to read? I don’t have some special insider scoop to know whether the numbers listed in the statements are real or fake.
  - _heimdall 2y ago
    Well to be clear, my question there was more broad than any one company's financial statements. I was asking a general question of the motivation for large corporations to avoid having profits on paper. I asked the question rather than claiming it as a statement because I am less confident in the details and want to raise the issue without presuming that I know exactly what I'm talking about on the topic.
    - MichaelZuo 2y ago
      The same applies to every public company’s financial statements…? That is assuming you’ve taken the effort to read the filings. If your lookkng for easy generalizations that applies to all public companies then no it doesn’t exist. You have to put in the effort to read each individual statement.
      - _heimdall 2y ago
        Feel free to not respond if you don't think my question was interesting enough to answer, or if you think I can do the research. Its worth noting that reading financials still doesn't make me an expert in the area and I'd still be making a mistake to assume that means I understand well enough the games or motivations behind the numbers on a page.
- lotsofpulp 2y ago
  One hint is that all the businesses that have the highest market capitalization earn the highest profit margins and profits. Dividends and share buybacks happen with those profits. If profits are less, then dividends and share buybacks are less, which means less money for shareholders. It makes no sense to forego $0.80 in your pocket because you do not want the government to get $0.20.
  - lostlogin 2y ago
    > One hint is that all the businesses that have the highest market capitalization earn the highest profit margins and profits. I’m far from expert here, but is that too simplistic? Where does perceived future value come into this? I’m thinking of companies like Amazon, which kept profit margins low while obviously having their shit together.
    - lotsofpulp 2y ago
      Actual results > perceived future profit margins > consistently low profit margins. https://companiesmarketcap.com/ https://companiesmarketcap.com/ Amazon clearly has a mix of a high profit margin business (AWS and other services) with a low profit margin business (retail). You will notice that most the top businesses are pretty much high profit margin tech and pharmaceutical businesses. Some oil and finance after that. And there are a few lower profit margin, but still large profit since the business is so large, but obviously, high profit margins and high profit is better than low profit margin and high profit.

The fact that they charge significantly more money than virtually every other utility company in the country (and indeed, within California) with comparable margins is pretty good evidence I feel.

MichaelZuo 2y ago
How is that evidence? The expectations, regulations, and imposed demands, are not 100% identical across all utilities. So any combination of factors could lead to higher prices.

_heimdall 2y ago

Maybe I'm naive here, but isn't any company at a similar scale regularly finding ways to reduce profits on paper? Taxes add up fast when you don't have expenses to write off, and my understanding was that most effective ways to reduce tax liability would also reduce profit margins.

MichaelZuo 2y ago
Why are you asking me when their financial statements are available online for you to read? I don’t have some special insider scoop to know whether the numbers listed in the statements are real or fake.
- _heimdall 2y ago
  Well to be clear, my question there was more broad than any one company's financial statements. I was asking a general question of the motivation for large corporations to avoid having profits on paper. I asked the question rather than claiming it as a statement because I am less confident in the details and want to raise the issue without presuming that I know exactly what I'm talking about on the topic.
  - MichaelZuo 2y ago
    The same applies to every public company’s financial statements…? That is assuming you’ve taken the effort to read the filings. If your lookkng for easy generalizations that applies to all public companies then no it doesn’t exist. You have to put in the effort to read each individual statement.
    - _heimdall 2y ago
      Feel free to not respond if you don't think my question was interesting enough to answer, or if you think I can do the research. Its worth noting that reading financials still doesn't make me an expert in the area and I'd still be making a mistake to assume that means I understand well enough the games or motivations behind the numbers on a page.
lotsofpulp 2y ago
One hint is that all the businesses that have the highest market capitalization earn the highest profit margins and profits. Dividends and share buybacks happen with those profits. If profits are less, then dividends and share buybacks are less, which means less money for shareholders. It makes no sense to forego $0.80 in your pocket because you do not want the government to get $0.20.
- lostlogin 2y ago
  > One hint is that all the businesses that have the highest market capitalization earn the highest profit margins and profits. I’m far from expert here, but is that too simplistic? Where does perceived future value come into this? I’m thinking of companies like Amazon, which kept profit margins low while obviously having their shit together.
  - lotsofpulp 2y ago
    Actual results > perceived future profit margins > consistently low profit margins. https://companiesmarketcap.com/ https://companiesmarketcap.com/ Amazon clearly has a mix of a high profit margin business (AWS and other services) with a low profit margin business (retail). You will notice that most the top businesses are pretty much high profit margin tech and pharmaceutical businesses. Some oil and finance after that. And there are a few lower profit margin, but still large profit since the business is so large, but obviously, high profit margins and high profit is better than low profit margin and high profit.