Hacker News Reader

Comment by reverendsteveii | Hacker News Reader

>The new request comes after the California Public Utilities Commission, which Gov. Gavin Newsom's administration oversees, approved six rate increases for PG&E in 2024.

>PG&E also reported a record $2.47 billion in profits in 2024, which was an increase from an earlier record that was set in 2023.

Well that's all I needed to see. If an increase every two months and setting a new profit record every year isn't enough then maybe someone else should be in charge of this. Maybe the people who need this should be in charge of this, not someone whose sole purpose is to squeeze those people for as much as possible.

View on HN

>Well that's all I needed to see. If an increase every two months and setting a new profit record every year isn't enough then maybe someone else should be in charge of this.

Given inflation is a thing, wouldn't you expect "record profits" year after year, even if nothing else changed?

No. You _could_ argue that record _revenue_ could happen due to inflation, but that's not profit.

>but that's not profit.

Did you mean profit margins? OP mentioned profits in absolute dollar amounts, not in % terms. Otherwise it's absurd to claim that dollar profits should stay the same, even with inflation.

profit = revenue - cost

Revenue and cost both increase by 10% due to inflation

profit = 1.1 * revenue - 1.1 * cost

profit = 1.1 * (revenue - cost)

So profit also increased by 10 percent.

assuming inflation hits all saleable goods and services equally is a pretty huge assumption

It doesn't meaningfully change the conclusion, since we're talking about whether there will "record" profits year after year. The exact % rise of profits is irrelevant. In most circumstances there's no deflation happening, so even if inflation isn't the same for inputs and sales, profits in dollar terms will still go up.

profit = 1.3 * revenue - 1.1 * cost

and

profit = 1.1 * revenue - 1.3 * cost

are both possible. the first leads to record profits every year, the second doesn't. the exact % change in profits is relevant because it can be positive, negative or zero in an environment with uneven inflation. Reality, at the moment, is an environment with uneven inflation.

While the point here is generally true, investor owned utilities have revenues (i.e. electricity rates) that are tied to their expenses. That's the reason they have to ask for a rate increase; if the rate increase was designed to juice their profit margin to 30%, it would likely be denied (not guaranteed, but likely).

So this is one industry where you'd expect revenue to increase in proportion to expenses.

>> someone whose sole purpose is to squeeze those people for as much as possible

If you look at https://finance.yahoo.com/quote/PCG/ and select all data, it looks like PG&E's stock price is around the same as it was in 1985. That means that adjusted for inflation, it has lost most of its value over that time period. It pays a 0.58% dividend, which, as the article says, is "the lowest dividend in its industry".

Returning far worse profits than treasury bonds is not squeezing people for as much as possible.

You're talking about where the money is going. I'm talking about where the money is coming from. Regardless of what they're spending it on later the amount of money left after all expenses are paid is going up and that increase is coming from consumers.

I'm not a Californian, so I'm sure there's something I'm missing, but why haven't you guys recalled Newsom yet or at least primaried him out during the last election? Do typical Californians think he's doing a good job or is it just that the alternatives are always worse?

Reply on news.ycombinator.com