Pacific Gas and Electric (PCG), Edison International's (EIX) Southern California Edison and Sempra's (SRE) San Diego Gas & Electric and Southern California Gas were authorized by regulators Thursday to keep profit margins next year at around 10%, the California Public Utilities Commission said.
The commission's decision on how much utilities could charge consumers in returns on equity to modernize infrastructure will decrease the profit margins of the utilities by 30 basis points, with Southern California Edison lowered to 10.03% from 10.33%, while that of Southern California Gas lowered to 9.78% from 10.08%, San Diego Gas & Electric's lowered to 9.93% from 10.23%, and Pacific Gas and Electric's lowered to 9.98% from 10.28%, the regulator said.
The 4-1 vote in favor of the rates angered consumer groups which have complained the rates were too high and demanded margins be set at around 6%, the Los Angeles Times reported.
The commission said that "setting returns on equity too low may result in the market expecting higher interest rates from utilities, which can translate into higher borrowing costs that remain in utility rates for many years."
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