The Brief

With California electric rates stuck at nearly the highest in the nation, the state’s utility regulator is poised to lower the payout shareholders can receive from California’s three large investor-owned power companies.

In a proposed decision, the California Public Utilities Commission recommended dropping the “return on equity” by 0.35% each for Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. If approved, shareholders of all three companies would see a potential return next year of just under 10%. Such returns for PG&E and Edison haven’t dipped below double digits in at least 20 years.

Utilities said the decline would affect their ability to bring in needed investment for their work. Critics of the decision said that the decline is too small to meaningfully impact ratepayers’ bills, even if it’s a step in the right direction.

“California and other [public utility commissions] authorize rates of return that are far in excess of the statutory requirement,” said Mark Ellis, former chief economist at Sempra, which owns San Diego Gas & Electric.

The California Public Utility Commission is expected to vote on the decision in December.

Californians pay the second-highest electric rates in the U.S. after Hawaii, according to the most recent figures from the U.S. Energy Information Administration. A number of factors go into those rates, including wildfire mitigation costs. PG&E in particular has attracted the ire of California customers for its frequent rate hikes within the last year.

Baked into those bills is the return on equity, money meant to compensate shareholders for the risk of doing business. These shareholder return rates are set by each state’s utility regulators and hover nationally around 10%. If approved, PG&E’s rate would be 9.93% (down from 10.28%), Edison would be 9.98% (down from 10.33%), and San Diego Gas & Electric would be 9.88% (down from 10.23%). These rates are not automatically guaranteed — utilities can fall short of this return if they don’t keep down costs, such as project overruns or unexpected lawsuit fees.

A small change in this rate can be a difference of millions of dollars for ratepayers. The return is a percentage of the rate base, the total value of a utility’s assets it can earn a return on; this includes projects such as building a new power plant, for example. The rate bases for California’s three large investor-owned utilities have steadily grown each year as they add new customers and projects, increasing the amount that shareholders can receive.

PG&E, for example, had a 10% shareholder return in 2023, a possible return of about $125 million. Had it been 1% lower, the potential return would have been $12.5 million less.

“The proposed cost of capital decision needs refinement to better reflect California’s unique risks and market realities,” said Edison spokesperson Jeff Monford. “Making those refinements in the final decision will enhance SCE’s ability to finance essential infrastructure projects for a more reliable, resilient and ready electric grid.”

PG&E spokesperson Jennifer Robison echoed this sentiment, saying the decision “fails to acknowledge current elevated risks to help attract the needed investment for California’s energy systems.”

Anthony Wagner, spokesperson at San Diego Gas & Electric, said, “A decision that accurately reflects these realities is essential to enabling investments that reduce wildfire risk, strengthen reliability, replace aging infrastructure and advance California’s clean energy transition for the benefit of the communities we serve.”

Utilities routinely request these rates be pushed higher because they are a key part of what goes into utilities’ credit rating, affecting the interest they pay on loans for infrastructure investments. But in recent years, experts and consumer advocates point to a mismatch — the utility industry is typically considered low-risk, but critics say the shareholder return rates don’t reflect that. Rates for U.S. 10-year treasury bonds, which are considered the benchmark for a risk-free investment, are about half of the national average for approved utility shareholder return rates. And it’s costing utility ratepayers across the country as much as $7 billion annually, according to academics.

Ellis, the former Sempra economist, said there is a way to lower shareholder returns while keeping customer bills in check and maintaining credit ratings that the commission has not yet explored — changing the balance of debt and equity each utility has.

“You really need to understand credit,” he said. “This is where they’re going to get you.”

The commission is allowed to set the debt-equity balance when it determines shareholder returns, but it left this unchanged for all three utilities in its proposed decision for 2026. Keeping shareholder return rates high as the main means for keeping credit ratings up, Ellis said, unnecessarily burdens ratepayers.

LAX officials are considering a proposal Tuesday to increase the fees rideshare companies are charged to access the airport.

Currently, rideshare companies like Uber and Lyft generally pass a $4 to $5 airport fee along to their customers. You might see this listed as a line item on your receipt as an “LAX Airport Surcharge.”

But the Los Angeles World Airports Board of Commissioners could vote to increase that fee by as much as $2 to $8 depending on where the rideshare picks you up or drops you off.

The idea behind the proposal is to encourage the use of the long-awaited, much-delayed and over-budget Automated People Mover once it opens and decrease congestion in the central terminal area, the area of the airport that’s also known as the horseshoe.

David Reich, a deputy executive director for the city agency that manages the airport, told LAist that if the proposal is approved, LAX doesn’t plan on increasing the fee until after the Automated People Mover opens, which could be later this year.

The proposed increases

When the Automated People Mover opens, there will be new curb space for drop-off and pick-up. Known as the “ground transport center,” this new curb space will be a 4-minute trip from the terminal area via the Automated People Mover, according to Reich.

LAX-it will shut down as a rideshare and taxi lot once the train opens, Reich said.

If the proposal is approved, getting an Uber or Lyft to and from the ground transport center will come with a $6 airport fee.

Even once the Automated People Mover opens, you will still be able to get rides directly to and from the curbs along the horseshoe, but they will come with a $12 fee.

The proposed increases would also apply to taxi and limousine services, which currently operate under a slightly different fee structure than rideshare companies.

The increased fees are expected to generate as much as $100 million in the first year the Automated People Mover is usable, according to a report to the board.

Why the different fees for the different locations?

In a report to the board, Reich said the Automated People Mover represents a "significant investment” that aims to “fundamentally reshape how vehicles move through the airport.”

The idea behind having a higher fee for direct access to the curbs along the horseshoe is to encourage “use of new, high-capacity infrastructure” and preserve central terminal access for trips “that most require it.”

Uber is trying to fight the increases

Uber is trying to mobilize the public to fight the proposed fee increases.

“Raising the LAX rideshare fee from $5 to $12 at the curb would punish travelers, working families, and seniors who depend on affordable, reliable transportation,” Danielle Lam, the head of local California policy for Uber, said in a statement.

On Monday, Uber sent an email to passengers who recently used the rideshare service, urging them to write to city officials to “stop this massive fee hike.”

Lyft has not responded to a request for comment.

Ten state lawmakers who are members of the L.A. County delegation sent a letter on Monday to the board expressing their “strong opposition” to the proposed increases.

“Many Angelenos rely on a mix of options, including rideshare services and friends or family dropping off loved ones,” the legislators wrote in the letter. “Managing congestion cannot realistically rely on steep fee increases for certain transportation options.”

Eight of the 10 legislators who signed the letter have received campaign contributions from Uber or Lyft, according to an LAist analysis of state campaign contribution data.

Other ways to access the airport

Now is probably a good time to remind folks that there are other ways to get to the airport that don’t involve rideshares, taxis or even lifts from families and friends.

The FlyAway bus offers regularly scheduled rides from the airport to Union Station in downtown L.A. and Van Nuys. You can see the schedules here. 

Last year, the countywide transportation agency unveiled the LAX/Metro Transit center, which is accessible from the C and K rail lines and several bus routes. For now, an LAX shuttle is bringing travelers from the station to the airport. It will be one of the stops on the Automated People Mover once it opens.

The Newport Beach City Council is considering demolishing part of its quirky, beloved sculpture garden in Civic Center Park to make way for a new police station.

The city has been trying to figure out how to replace its aging police headquarters for years. It bought a property in 2022 with that intent. But an ad hoc City Council committee decided, controversially, it might be better to instead build a new station on the parkland next to city hall.

What’s so great about the sculpture garden?

The sculpture garden is a “museum without walls” treasured by art and nature lovers alike. It houses the quirky and once-controversial “Bunnyhenge,” included on the popular Atlas Obscura travel guide. Opponents of putting a new police headquarters on park grounds say it would compromise the environment, and decimate the sculpture garden.

What do supporters of the new station idea say?

Supporters say the current police station, built in 1973, is long overdue for an upgrade, and that the police force needs more space for things like servers to store digital evidence. The council ad hoc committee that studied the issue says the Civic Center parkland makes the most sense for a new building because the city already owns the land, and it would consolidate the city’s main services in one place.

Is it a done deal?

Far from it. The City Council is holding a study session Tuesday to present the plan publicly and gather input. If the council decides to go forward, the next step would be to hire a consultant to design the building and get started on an environmental impact report.

Here’s how to learn more and weigh in:

A new exhibit in L.A. — Vehicles of Expression: The Craft of the Skateboard — arrives this weekend, highlighting the cultural impact, history and artistry of handmade skateboards.

It’s the latest exhibit at Craft in America Center, a museum and library that highlights handcrafted artwork.

Todd Huber, skateboard historian and founder of the Skateboarding Hall of Fame, said before 1962, it wasn’t possible to buy a skateboard in a store.

“Skateboarding started as a craft,” Huber said on AirTalk, LAst 89.3’s daily news program. “Somewhere in the 50s until 1962, if you wanted to sidewalk surf, as they called it, you had to make your own out of roller skates.”

What to expect

Emily Zaiden, the director and lead curator of the Craft in America Center based in Los Angeles, told LAist’s AirTalk the exhibit was tricky to curate.

“What we wanted to do was focus on both the history and then expand into how this has been an object that people have interpreted in so many different ways since the very beginning,” Zaiden said.

Artists who craft skateboards not only think of design, but also of the features that give riders the ability to do tricks, such as wheelies and kickflips.

“The ways that people have constructed boards, engineered boards, design boards … people are really renegade, which I think is really the spirit of skateboarding overall,” Zaiden said. “This very independent, out-of-the-box approach and making boards that allow them to do all kinds of wacky tricks and do all kinds of things that no one imagined possible physically with their body, but through the object of the board.”

Know before you go

The exhibit at Craft in America Center opens to the public on Saturday. Admission is free. The museum is open from noon to 6 p.m., Tuesday through Saturday.