Public Investment in Infrastructure is a Promising Option to Support California’s Energy Transition and Reduce Ratepayer Costs

Overview

Public investments in new electric infrastructure can yield significant ratepayer savings because projects may attract lower interest rates, eliminate payments to utility shareholders (return on equity), and realize tax advantages unavailable to private companies. Any of these savings could then be directly passed on and minimize effective costs to ratepayers. In a representative analysis from the Public Advocates Office, a new transmission line that monetizes these savings reduces net costs to ratepayers by about one-quarter compared to the current rate recovery process. Due to the scale of investments to support California’s energy transition, realizing even a fraction of these estimated benefits could translate to billions of dollars in ratepayer savings over the long-term.

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