Molly Ayala
California is home to several dozen major electric companies that provide services to end users. The most famous of these are Pacific Gas & Electric Company (PG&E), PacifiCorp, Silicon Valley Power, and Bear Valley Electric Service. PG&E is the largest integrated utility company in California, and its electricity rates are among the highest in the United States. The company generates 60% of its electricity from third-party generators and 40% from nuclear, fossil fuel, and hydroelectric power plants. California's electricity market is regulated by the California Public Utility Commission (CPUC), which ensures that residents receive reliable and affordable service.
| Characteristics | Values |
|---|---|
| Number of Electric Companies | Several dozen major electric companies |
| Types of Electric Companies | Investor-Owned Utilities (IOUs) and Publicly Owned Utilities (POUs) |
| Company Regulating Bodies | California Public Utility Commission (CPUC) |
| Company Monitoring Bodies | California ISO |
| Examples of Electric Companies | Pacific Gas & Electric Company (PG&E), PacifiCorp, Silicon Valley Power, Bear Valley Electric Service, Liberty Utilities, Southern California Edison (SCE), San Diego Gas & Electric (SDG&E) |
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What You'll Learn
Pacific Gas & Electric Company (PG&E)
The Pacific Gas and Electric Company (PG&E) is an American investor-owned utility company. PG&E is headquartered at the Kaiser Center in Oakland, California. The company provides natural gas and electricity to 5.2 million households in the northern two-thirds of California, from Bakersfield and northern Santa Barbara County up to the Oregon and Nevada state lines. PG&E is overseen by the California Public Utilities Commission and is the leading subsidiary of the holding company PG&E Corporation, which has a market capitalization of $34.9 billion as of March 10, 2025.
PG&E was established on October 10, 1905, through the merger and consolidation of various predecessor utility companies. By 1914, PG&E had become the largest integrated utility system on the Pacific Coast, handling 26% of the electric and gas business in California across 37,000 square miles and 30 counties. The company continued to expand in the 1920s through strategic acquisitions, including the California Telephone and Light Company, the Western States Gas and Electric Company, and the Sierra and San Francisco Power Company. By 1984, PG&E had become the largest electric utility business in the United States.
In addition to its core business, PG&E has also ventured into other areas. For example, in 1906, PG&E purchased the Sacramento Electric, Gas and Railway Company and entered the railway business in and around Sacramento. The company's expansion and diversification continued, and by 1931, its Sacramento Street Railway Division was operating 75 streetcars on 47 miles of track. However, in 1943, PG&E sold the rail service, and it eventually transitioned to bus service.
Despite its success, PG&E has faced financial challenges. In April 2004, the company emerged from bankruptcy after paying $10.2 billion to its creditors. Unfortunately, the company faced further financial troubles due to liabilities from multiple wildfires between 2015 and 2018, leading to another bankruptcy filing in January 2019.
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San Diego Gas & Electric (SDG&E)
The company was previously known as San Diego Gas and Electric Company, ending corporate ownership and making its stock available to the public in 1940 to comply with federal law. In the 1950s, SDG&E began research into nuclear power and, in 1961, it agreed to participate in a 350,000-kilowatt nuclear power plant with Southern California Edison, known as the San Onofre Nuclear Generating Station (SONGS). The plant, located in San Onofre, California, became operational in 1967, with SDG&E owning 20% and SoCal Edison owning 80%.
In the 1970s, SDG&E expanded its operations by acquiring the Mountain Empire Rural Electric Co-op, which served eastern San Diego County. The company has also been involved in projects like the South Bay power plant, with the first of four oil fuel-burning units coming online in 1960, providing much-needed electricity for the region's economic growth.
SDG&E offers assistance programs like CARE and FERA, providing monthly discounts on energy bills. Additionally, they have invested $10 million in charitable grants to local nonprofits, focusing on housing stability, food security, and access to public assistance programs.
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Southern California Edison (SCE)
SCE owns all of its electrical transmission facilities and equipment, including hydroelectric plants totalling about 1,200 MW, and a 75% share of the 2,150-MW San Onofre Nuclear Generating Station, which is currently being decommissioned. In addition to its electric business, SCE also operates the sole gas and water utilities on Santa Catalina Island.
SCE has taken steps to increase its use of renewable energy sources. In 2006, the company planned to secure 1,500 megawatts or more of power from wind farms in the Tehachapi region, and in 2008, it announced an $875 million project to build a network of 250 megawatts of photovoltaic solar power generation. As a result of these initiatives, by 2016, 28.2% of SCE's power sources were renewable. SCE also offers customers the option to obtain their electricity entirely from renewable sources through a "green rate" subscription.
SCE provides rebates and incentives for lighting, food service technology, HVAC, air conditioning, and related electric appliances and systems to help manage electricity costs. The company is committed to making clean energy more accessible and reliable for all its customers and is taking action to reduce wildfire threats and improve safety throughout Southern California.
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Los Angeles Department of Water & Power (LADWP)
The Los Angeles Department of Water and Power (LADWP) is the largest municipal utility in the United States. It has a capacity of 8,100 megawatts of electric generation (2021-2022) and delivers an average of 435 million gallons of water per day to over four million residents and businesses in Los Angeles and the surrounding areas in southwestern Los Angeles County.
LADWP was founded in 1902 to supply water to the city of Los Angeles and began delivering electricity to parts of the city in 1917. In 1922, the Los Angeles Bureau of Power and Light, which administered the city's electrical system, purchased the distribution system of Southern California Edison. In 1937, the bureau merged with the Bureau of Water Works and Supply to become the LADWP. In 1939, it became the sole electricity provider for the city.
LADWP operates four natural gas-fired generating stations within the city, which, along with other natural gas sources, account for 24% of its capacity. It also receives electricity from coal-fired plants in Utah and Arizona (21%), nuclear power from the Palo Verde Nuclear Generating Station in Arizona (14%), and hydropower from the Hoover Dam and the Los Angeles Aqueduct system (2%). The utility company has plans to transition away from coal by 2025.
LADWP offers various programs to support its customers and the community. These include the EZ-SAVE Program, which helps income-qualified customers save on their utility bills, and the Lifeline Rate Program, which offers senior and disabled citizens exemptions on their utility bills. The company also provides rebates of up to $4,000 for qualifying used electric vehicles purchased within 12 months of application.
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California's electricity-buying business
California's electricity market is a complex and dynamic sector, featuring a mix of investor-owned utilities (IOUs) and publicly-owned utilities (POUs). The state is home to several dozen major electric companies, with the most prominent ones being Pacific Gas & Electric Company (PG&E), PacifiCorp, Silicon Valley Power, and Bear Valley Electric Service. PG&E, in particular, has a long history in the state, dating back to its early involvement in the hydroelectric industry and the development of natural gas supplies.
The California Public Utilities Commission (CPUC) plays a crucial role in regulating the electricity sector. It monitors privately-owned utility companies and ensures that residents receive reliable and affordable service. The CPUC also regulates natural gas, water, telecommunications, and rail transit companies. One of the key challenges faced by the CPUC is maintaining a balance between the state's climate change goals and the need to ensure a stable and affordable electricity supply for residents. California has set an ambitious mandate of achieving 100% climate-friendly electricity by 2045, which will require a significant shift away from gas-fired power plants and towards clean energy alternatives.
The electricity market in California is also characterised by the presence of Electric Load-Serving Entities (LSEs). These entities include both private and public utilities that are responsible for supplying electricity to customers within their service territories. Examples of LSEs include Liberty Utilities, San Diego Gas & Electric (SDG&E), Southern California Edison (SCE), and Los Angeles Department of Water & Power (LADWP). LSEs have been facing increasing competition from Community Choice Aggregators (CCAs), who advocate for local communities' power to choose their energy supplies.
In recent years, there has been a shift away from traditional power providers like SCE, PG&E, and SDG&E. This shift has led to concerns about the potential unintended consequences of changing the state's main power providers. Additionally, California's electricity-buying business is influenced by the need to purchase emergency power supplies and the challenges posed by artificial shortages created by out-of-state suppliers. The state has also experienced challenges due to the high maintenance costs associated with ageing hydroelectric power infrastructure.
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Frequently asked questions
There are several dozen major electric companies in California, including Pacific Gas & Electric Company (PG&E), PacifiCorp, Silicon Valley Power, and Bear Valley Electric Service.
PG&E is the Pacific Gas and Electric Company. It is one of the most famous and main power providers in California. PG&E electricity rates are among the highest in the United States.
Some regulators worry about the shift away from the main power providers in California, such as PG&E, towards a more distributed energy system. Additionally, California has a mandate of 100% climate-friendly electricity by 2045, which will be challenging to achieve as gas-fired power plants are shut down.
