Sierra Club Secures Energy Affordability Win for Californians

On December 18, 2025, the California Public Utilities Commission (CPUC) voted to approve the lowest profits for California utilities since 2006. Every three years, the CPUC sets the rates of return that California’s investor-owned utilities are guaranteed on their capital investments—returns that are automatically built into electric bills and paid by millions of households. In the most recent of these proceedings, utilities sought higher guaranteed returns despite record profits and soaring energy bills. Approving utilities’ requests would have locked in hundreds of millions of dollars in additional shareholder payouts at the direct expense of ratepayers during a worsening affordability crisis. As California energy bills rise, affordability is increasingly weaponized against clean energy investment, and Sierra Club is stepping into these fights to make sure utility profits—not clean energy—are where regulators apply the brakes.

Sierra Club mounted a coordinated legal and public-pressure campaign that fundamentally shifted the proceeding toward the true market cost of raising capital for utilities. Sierra Club attorney Katie Ramsey retained a former utility executive as an expert witness whose analysis—based on utilities’ own financial data—showed that the market cost of capital was roughly half what utilities claimed, with the potential to save customers an estimated $6.1 billion annually. Sierra Club’s filings challenged utility use of financial models widely rejected by other agencies and dismantled the utilities’ contradictory claims that California is both uniquely risky and one of the most profitable places to invest. 

Alongside this legal strategy, Sierra Club’s organizing and communications work educated coalition partners, mobilized thousands of public comments, and forced unprecedented public scrutiny onto utilities that should be held accountable to their ratepayers. 

In a 4–1 vote, the CPUC approved the lowest utility returns on equity (ROE) since 2006 and modest reductions to authorized rates of return—a meaningful departure from past practice, though still far short of what ratepayers deserve. The decision notably declined to fully interrogate utilities’ cost-of-capital claims, with the CPUC stating it would not “litigate the specific mechanics” of financial models. One Commissioner dissented, echoing Sierra Club’s position that the decision failed to adequately protect consumers.

While these reductions alone will not solve California’s affordability crisis, they will save ratepayers hundreds of millions of dollars each year and mark a critical turning point. Sierra Club has helped establish affordability as a central battleground in utility regulation—ensuring that the clean energy transition delivers affordable clean energy, not guaranteed excess profits.