State Regulators Cut Utility Companies' Profits — But By Less Than Proposed

This article was first published by the nonprofit newsroom LAist on December 18, 2025 and is republished here with permission.

Topline: California regulators voted to lower how much profit the state’s big four investor-owned utilities can make — but only slightly.

The proposal: The decision lowers the maximum allowed profits for the state’s four investor-owned utilities — Southern California Edison, So Cal Gas, San Diego Gas & Electric and Pacific Gas & Electric — by about 0.3%. That’s less than the 0.35% reduction originally proposed.

The vote: In a 4-1 decision, the state’s five governor-appointed commissioners approved the proposal to lower the payout to shareholders from the state’s major utility companies. They argued the decision strikes a balance between the effort to lower energy bills with the need to keep the utilities financially stable, especially as they work to harden an aging power grid against worsening wildfire conditions. Commissioner Darcie L. Houck was the sole no vote.

The response: Critics say the reduction should go further to meaningfully reduce energy bills, pointing out that the companies have reported record or near-record profits in recent years. The utility companies argued that lowering their returns on equity too far below national averages would hurt shareholder investment and their credit, driving up customer costs over time.

Go deeper: Will California OK lower utility company profits? How a pending vote could affect your electric bill