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California proposal rejects wildfire premium in PG&E, other utilities’ ROE

December 4, 2019

The CPUC’s proposed decision maintains the utilities’ test-year 2020 ROE at 2018 values: 10.3% for Southern California Edison, down from the requested 11.45%; 10.25% for PG&E, down from the 12% it applied for; and 10.2% for SDG&E, compared to the 12.38% it requested.

California’s utilities filed their cost-of-capital applications with the commission in April, requesting significant increases to their ROE — the rate of authorized shareholder profit — to counter risks from wildfires. PG&E initially requested a 16% ROE, about a $1.2 billion increase in customer costs, which the utility said would allow it to access the capital required to invest in wildfire safety measures.

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