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PG&E is an investor-owned regulated monopoly. Other utilities in California are publicly owned (either government, or non-profit. For example, LADWP, SMUD, Palo Alto, Turlock and many, many more). Those publicly owned utilities have much lower rates. PG&E has a "revenue requirement" which is the amount it needs to bring in to cover operating, energy procurement, construction, and profit. At the most simplistic level, rates ($/kWh) are set by dividing the revenue requirement by the anticipated quantity of electricity sold. The amount of profit it is allowed to make it determined primarily by how much it has invested to safely and reliably deliver electricity. Some of that is regulated by the Federal Energy Regulatory Commission (FERC). Something like a 9% return on equity for investment. This creates a misalignment of incentives: PG&E would rather spend CapEx than OpEx. This is the market failure (of the natural monopoly) that the regulator is supposed to address. However, PG&E's lack of maintainence on a metal hook (over > 80 years) which eventually failed caused the Camp Fire. Instead of replacing all of the hooks (a relatively inexpensive OpEx), PG&E proposed, and the CPUC blessed, an incredibly expensive effort to underground transmission lines. [0] This is a windfall for PG&E's investors and organized labor in California. But a huge headwind to the economy of California, and California's efforts to electrify. As others have noted, PG&E's rates are now so expensive that driving an EV doesn't save materially (or at all) over gasoline (even with California's relatively high gasoline prices). [0] https://www.wsj.com/us-news/climate-environment/pg-e-wins-ap... |