4 ms·

difficult to find the reasoning behind the 10% being considered "reasonable" from the article. It sounds like Edison has a lot of risk mitigation of wildfires,

by fusslo 10mo ago

difficult to find the reasoning behind the 10% being considered "reasonable" from the article. It sounds like Edison has a lot of risk mitigation of wildfires, and is dealing wit a lot of litigation. Is part of the 10% profit going to these costs? Or since they're an expense it's not apart of the 10% profit?

vkou 10mo ago
Pussyfooting around this issue is the worst of both worlds. 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?
- roenxi 10mo ago
  > Why on earth is a government-protected monopoly entitled to 10% margins? 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.
- skybrian 10mo ago
  It’s certainly not risk-free. PG&E went bankrupt twice. There will be more wildfires. It could happen again. Also, much of the point of having shareholders is that they take the risk. If something goes wrong, they lose their money first.
  - vkou 10mo ago
    Except that the state of California ended up on the hook for the first bankruptcy. The shareholders were the only ones who came out fine. The customers and the state got stuck with the bill. 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.
    - AJ007 10mo ago
      Just had to look this one up. PG&E's first bankruptcy was April 6, 2001. Based on the stock price decline prior to that, it looks like their shareholders thought everything was ok in November of 2000 and the stock was $27 (it bottomed out at $8.97 in April of 2001.) As of today, the stock is worth $15.97. 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.
      - vkou 10mo ago
        1. The stock recovered within 2 years and then shot to the moon. 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.
- CaptainNegative 10mo ago
  Capping margins at a percentage also directly breeds inefficiencies. If you could spend $10M to fix a problem that costs you $4M/yr, you're effectively paying $10M now to lose $400k in annual profit potential.
autoexec 10mo ago
> It sounds like Edison has a lot of risk mitigation of wildfires, and is dealing wit a lot of litigation. They made their own bed. https://www.latimes.com/environment/story/2025-12-17/edison-neglected-maintenance-of-its-aging-transmission-lines-before-jan-7-fires-now-its-trying-to-catch-up 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.

by fusslo 10mo ago

vkou 10mo ago

Pussyfooting around this issue is the worst of both worlds. 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?

roenxi 10mo ago
> Why on earth is a government-protected monopoly entitled to 10% margins? 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.
skybrian 10mo ago
It’s certainly not risk-free. PG&E went bankrupt twice. There will be more wildfires. It could happen again. Also, much of the point of having shareholders is that they take the risk. If something goes wrong, they lose their money first.
- vkou 10mo ago
  Except that the state of California ended up on the hook for the first bankruptcy. The shareholders were the only ones who came out fine. The customers and the state got stuck with the bill. 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.
  - AJ007 10mo ago
    Just had to look this one up. PG&E's first bankruptcy was April 6, 2001. Based on the stock price decline prior to that, it looks like their shareholders thought everything was ok in November of 2000 and the stock was $27 (it bottomed out at $8.97 in April of 2001.) As of today, the stock is worth $15.97. 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.
    - vkou 10mo ago
      1. The stock recovered within 2 years and then shot to the moon. 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.
CaptainNegative 10mo ago
Capping margins at a percentage also directly breeds inefficiencies. If you could spend $10M to fix a problem that costs you $4M/yr, you're effectively paying $10M now to lose $400k in annual profit potential.

autoexec 10mo ago

> It sounds like Edison has a lot of risk mitigation of wildfires, and is dealing wit a lot of litigation. They made their own bed. https://www.latimes.com/environment/story/2025-12-17/edison-neglected-maintenance-of-its-aging-transmission-lines-before-jan-7-fires-now-its-trying-to-catch-up 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.