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Comment by os2warpman | Hacker News Reader

>Most people seem to blame price gouging from the electricity companies,

True or false: PSEG's annual profit every year for the last five years at a rate that greatly exceeds inflation while expenses are practically flat.

Their stock symbol is PEG, bee-tee-dubs.

There are very few theories of business and/or economics where profits increase while costs are steady where prices don't increase.

Are they (hold on a sec while I compose myself so I don't type a long string of obscenities) using that money to improve their service and keep rates steady or are they funneling everyone's money into the pockets of their investors and begging the state for free cash to maintain their infrastructure like they're some broke-ass bitches?

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https://www.alphaquery.com/stock/PEG/fundamentals/annual/pro... does not look like the profit margin has increased over the past 5 years.

Also their stock underperformed the S&P 500 over the past 5 years.

I'm not really a finance guy so probably I'm looking at it wrong, but that seems like some pretty bad price gouging.

>...does not look like the profit margin has increased over the past 5 years.

Just tripled over the last 20 years from 6% to 18%?

Only morons accuse NJ/NY utilities of price gouging. Both states heavily regulate their utilities. Utilities may get large rate increases approved, but it's after they submit substantial evidence of their finances for the next year. The profit margins are basically state controlled.

Regulatory control of margins just incentivizes companies to find loopholes.

Look at all the bullshit that passes for business as usual with Florida utilities -- political campaign donations, self-dealing, constructed overbilling by related subsidiaries, etc.

> There are very few theories of business and/or economics where profits increase while costs are steady where prices don't increase.

There is a very specific and relevant one: The one in which supply is inelastic. In other words, the one in which it's hard to build new power plants.

When that happens, the cost of operating existing power plants hasn't changed, but demand goes up. In normal economics, demand going up causes the price (and therefore profit) to go up, which in turn attracts more suppliers that increase supply and mitigate the amount the price can increase.

If the supply can't go up then price does. That's econ 101 and it's happening just as it's expected to -- it's simply what happens if you make it hard to increase supply.

Are you referring to PEG stock price or actual profit? Because their profits growth hasn’t really “greatly exceeded” inflation. Here is the last 30 years of profits[1] (you can change it to YoY to see how much their growth over the last 5 years is). They in fact posted a loss in 2021 and under performed 2022. They shot up in 2023 and then down to pre-pandemic levels in 2024.

They are not what I’d call a profitable company. I think their stock is reflecting the AI bubble as plenty of people are speculating on power companies

[1] https://www.roic.ai/quote/PEG/financials

2nd one, the investors. barely exceeding inflation is barely making a profit.

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