The Truth Behind California’s High Electricity Rates: ROE, Not Renewables

Why California Utility Bills Keep Rising: The Real Cost Driver Behind California Electricity Rates

California doesn’t need another mysterious explanation for why utility bills keep blowing past inflation. The reason sits right there in plain view, wearing a suit and collecting guaranteed profits: Return on Equity.

ROE is the regulated profit margin utilities earn on capital spending. It’s been drifting upward for decades, and ratepayers are the ones stuck funding this quiet wealth redistribution.

ROE and Rising Electricity Rates in California

How Return on Equity Impacts Commercial Solar Projects and Energy Costs

The math is embarrassing. Back in the 1990s, utilities got a risk premium that made sense for a stable, low-risk business. Then regulators started approving higher ROEs.

The premium nearly tripled. Analysts estimate this inflated return drains more than $50 billion from U.S. customers each year.

That’s not investment… that’s extraction.

Why High ROE Discourages Affordable Renewable Energy and Commercial Solar Solutions

How Utility Incentives Undermine Solar PV and Solar Thermal Adoption

The incentives are even worse because utilities earn their highest profits on capital projects, a high ROE pushes them to build more stuff, bigger stuff, and sometimes pointless stuff.

When you’re guaranteed a double-digit return no matter how efficient the project is, why pick the cheapest solution?

Every new transformer, battery yard, or substation becomes a revenue engine. Customers pay for all of it.

What Lower ROE Could Mean for California Ratepayers and Commercial Energy Efficiency

How ROE Reform Could Reduce Commercial Utility Costs and Improve Solar ROI

Plenty of people have had enough. Consumer advocates and even former utility executives are telling the CPUC to stop gifting utilities a 10 percent return and drop it to something reasonable. Six percent fits the risk profile and is still generous.

It would save Californians more than $6 billion a year.

Utilities have been fighting it with the classic threat: “If you cut our returns, investors will flee and the grid will collapse.” Right, because a monopoly that cannot lose its customers is suddenly a fragile flower. Utilities have other options. They could reinvest profits instead of paying massive dividends. They could finance projects like every other stable infrastructure business. They could stop pretending they’re a tech startup living on venture capital fumes.

CPUC’s ROE Decision and the Future of California Commercial Energy Rates

Will California Choose Lower Energy Costs or Higher Shareholder Profits?

This isn’t a minor regulatory tweak. The CPUC is choosing whether California families get financial relief or whether investors keep enjoying profit margins that look nothing like a low-risk monopoly. The decision will show whether the commission works for ratepayers or shareholder expectations.

The California ROE won’t trend down by accident. It changes only if regulators stop rubber-stamping inflated returns and remember who pays the bills every month.

Ratepayers need a correction. The CPUC needs to make one.

Utility Bill ROE California