Business
The Big Number: 2.7%
Productivity is usually measured as a simple ratio: the total amount of output an economy produces per hour worked by its labor force. When that ratio picks up, it can create a positive cascading effect.
Gains in productivity mean businesses can make more money per hour, reinvest it in their operations and, at least theoretically, pay workers more.
Ruth Fremson/The New York Times
Business
Altadena asked Edison to bury power lines. Some fire victims say that could cost them $40,000
Connor Cipolla, an Eaton wildfire survivor, last year praised Southern California Edison’s plan of burying more than 60 miles of electric lines in Altadena as it rebuilds to reduce the risk of fire.
Then he learned he would have to pay $20,000 to $40,000 to connect his home, which was damaged by smoke and ash, to Edison’s new underground line. A nearby neighbor received an estimate for $30,000, he said.
“Residents are so angry,” Cipolla said. “We were completely blindsided.”
Other residents have tracked the wooden stakes Edison workers put up, showing where crews will dig. They’ve found dozens of places where deep trenches are planned under oak and pine trees that survived the fire. In addition to the added costs they face, they fear many trees will die as crews cut their roots.
“The damage is being done now and it’s irreversible,” homeowner Robert Steller said, pointing Maiden Lane to where an Edison crew was working.
For a week, Steller, who lost his home in the fire, parked his Toyota 4Runner over a recently dug trench. He said he was trying to block Edison’s crew from burying a large transformer between two towering deodar cedar trees. The work would “be downright fatal” to the decades-old trees, he said.
Altadena resident Robert Steller stands in front of his Toyota 4Runner that he parked strategically to prevent a Southern California Edison crew from digging too close to two towering cedar trees.
(Ronaldo Bolaños / Los Angeles Times)
The buried lines are an upgrade that will make Altadena’s electrical grid safer and more reliable, Edison says, and it also will lower the risk that the company would have to black out Altadena neighborhoods during dangerous Santa Ana winds to prevent fires.
Brandon Tolentino, an Edison vice president, said the company was trying to find government or charity funding to help homeowners pay to connect to the buried lines. In the meantime, he said, Edison decided to allow owners of homes that survived the fire to keep their overhead connections until financial help was available.
Tolentino added that the company planned meetings to listen to residents’ concerns, including about the trees. He said crews were trained to stop work when they find tree roots and switch from using a backhoe to digging by hand to protect them.
“We’re minimizing the impact on the trees as we [put lines] underground or do any work in Altadena,” he said.
Although placing cables underground is a fire prevention measure, consumer advocates point out it’s not the most cost-effective step Edison can take to reduce the risk.
Undergrounding electric wires can cost more than $6 million per mile, according to the state Public Utilities Commission, far more than building overhead wires.
Because utility shareholders put up part of the money needed to pay for burying the lines, the expensive work means they will earn more profit. Last year, the commission agreed Edison investors could earn an annual return of 10.03% on that money.
Edison said in April it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation. That amount of construction spending will earn Edison and its shareholders more than $70 million in profit before taxes — an amount billed to electric customers — in the first year, according to calculations by Mark Ellis, the former chief economist for Sempra, the parent company of Southern California Gas and San Diego Gas & Electric.
That annual return will continue over the decades while slowly decreasing each year as the assets are depreciated, Ellis said.
“They’re making a nice profit on this,” he said.
Tolentino said the company wasn’t doing the work to profit.
“The primary reason for undergrounding is the wildfire mitigation,” he said. “Our focus is supporting the community as they rebuild.”
It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried. The blaze ignited under Edison’s towering transmission lines that run down the mountainside in Eaton Canyon. Those lines carry bulk power through Edison’s territory. The power lines being put underground are the smaller distribution lines, which carry power to homes.
A power line outside the home of Altadena resident Connor Cipolla.
(Ronaldo Bolanos/Los Angeles Times)
The investigation into the fire’s cause has not yet been released. Edison says a leading theory is that one of the Eaton Canyon transmission lines, which hadn’t carried power for 50 years, might have briefly reenergized, sparking the blaze. The fire killed 19 people and destroyed more than 9,000 homes, businesses and other structures.
Edison said it has no plans to bury those transmission lines.
The high cost of undergrounding has become a contentious issue in Sacramento because, under state rules, most or all of it is billed to all customers of the utility.
Before the Eaton fire, Edison won praise from consumer advocates by installing insulated overhead wires that sharply cut the risk of the lines sparking a fire for a fraction of the cost. Since 2019, the company has installed more than 6,800 miles of the insulated wires.
“A dollar spent reconductoring with covered conductor provides … over four times as much value in wildfire risk mitigation as a dollar spent on underground conversion,” Edison said in testimony before the utilities commission in 2018.
By comparison, Pacific Gas & Electric has relied more on undergrounding its lines to reduce the risk of fire, pushing up customer utility bills. Now Edison has shifted to follow PG&E’s example.
Mark Toney, executive director of the the Utility Reform Network, a consumer group in San Francisco, said his staff estimates Edison spends $4 million per mile to underground wires compared with $800,000 per mile for installing insulated lines.
By burying more lines, customer bills and Edison’s profits could soar, Toney said.
“Five times the cost is equal to five times the profit,” he said.
Last spring, Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom about the company’s undergrounding plans in a letter. Pizarro wrote that rules at the utility commission would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. He estimated it would cost $8,000 to $10,000 for each home.
Residents who need to dig long trenches may pay far more than that, said Cipolla, who is a member of the Altadena Town Council.
An oak tree stands tall in an area impacted by the Eaton fires. Homeowners worry such trees could be at risk in the undergrounding work.
(Ronaldo Bolanos/Los Angeles Times)
Last week, Cipolla showed a reporter the electrical panel on the back of his house, which is many yards away from where he needs to connect to Edison’s line. The company also initially wanted him to dig up the driveway he poured seven years ago, he said. Edison later agreed to a location that avoids the driveway.
Tolentino said Edison’s crews were working with homeowners concerned about the company’s planned locations for the buried lines.
“We understand it is a big cost and we’re looking at different sources to help them,” he said.
At the same time, some residents are fuming that, despite the undergrounding work, most of the town’s neighborhoods still will have overhead telecommunications lines. In other areas of the state, the telecommunications companies have worked with the electric utilities to bury all the lines, eliminating the visual clutter.
So far, the telecom companies have agreed to underground only a fraction of their lines in Altadena, Tolentino said.
Cipolla said Edison executives told him they eventually plan to chop off the top of new utility poles the company installed after the fire, leaving the lower portion that holds the telecom lines.
“There is no beautification aspect to it whatsoever,” Cipolla said.
As for the trees, Steller and other residents are asking Edison to adjust its construction map to avoid digging near those that remain after the fire. Altadena lost more than half of its tree cover in the blaze and as crews cleared lots of debris.
1. A pedestrian walks past Christmas Tree lane in Altadena. Christmas Tree Lane was officially listed in the National Register of Historic Places in 1990. 2. A “We Love Altadena” sign hangs from a shrub on Christmas Tree Lane. 3. Parts of a chopped down tree rest on a street curb in Altadena.
Wynne Wilson, a fire survivor and co-founder of Altadena Green, pointed out that the lot across the street from the giant cedar trees on Maiden Lane has no vegetation, making it a better place for Edison’s transformer.
“This is needless,” Wilson said. “People are dealing with so much. Is Edison thinking we won’t fight over this?”
Carolyn Hove, raising her voice to be heard over the crew operating a jackhammer in front of her home, asked: “How much more are we supposed to go through?”
Hove said she doesn’t blame the crews of subcontractors the utility hired, but Edison’s management.
“It’s bad enough our community was decimated by a fire Edison started,” she said. “We’re still very traumatized, and then to have this happen.”
Business
Super Bowl spots spark fight over whether we’re ready for ads from our chatbots
The chatbot wars entered the Super Bowl this year.
At Super Bowl LX, a ChatGPT competitor paid millions of dollars for commercials mocking the leading artificial intelligence chatbot’s plans to put advertisements in its chats.
One of the ads, titled “Betrayal,” showed a man seeking help to communicate better with his mother. His therapist, representing a sponsored bot, offers advice on mending the relationship, then suddenly suggests a mature dating site to connect with “roaring cougars.”
The ads from Anthropic, which has a chatbot named Claude, ends with the tagline: “Ads are coming to AI. But not to Claude.”
AI companies are spending hundreds of billions of dollars and need to generate more revenue to keep spending. Though much of the money comes from subscriptions from companies and other heavy users, companies serving regular consumers will probably need to increasingly rely on ads and other methods to monetize mass market users.
The Super Bowl Sunday ads launched a debate about what a future would look like in which the bots many people talk to all day start pitching products.
OpenAI, which has more than 800 million users, generated around $20 billion in revenue in 2025, according to its chief executive, Sam Altman. That still isn’t enough to cover what it has borrowed and plans to spend.
Last month, OpenAI said it will be testing ads for its free-tier users and its low-cost ChatGPT Go subscribers in the U.S.
“Subscriptions cover the committed users,” said former Google executive Justin Inman, who is the founder of Emberos, a startup that researches brand visibility in AI. “But they have a ton of free users as well.”
Ads have just started rolling out on ChatGPT, and the company has shared examples of what they look like in a chat.
One example showed a static link to purchase hot sauce at the bottom of the answer, labeled ‘sponsored’. Another was more conversational. After answering a user query about Santa Fe, the chatbox provided a link to a desert cottage in the locality.
OpenAI underlined that the ads won’t influence ChatGPT’s answers and will be separate and clearly labeled.
Altman responded to the Anthropic commercial on X, calling it funny but “dishonest.”
“We would obviously never run ads in the way Anthropic depicts them,” he said. “We are not stupid and we know our users would reject that.”
He suggested Anthropic was being elitist.
“Anthropic serves an expensive product to rich people,” he said, while OpenAI feels “strongly that we need to bring AI to billions of people who can’t pay for subscriptions.”
Anthropic was founded in 2021 by former OpenAI employees. Though the two companies have been long-term rivals, the Super Bowl ad was one of the first times the scuffle was so public.
While ChatGPT targeted everyday users, Anthropic has focused on selling chatbot services to business customers. The company has witnessed explosive growth, clocking a reported $9 billion in revenue in 2025, and is projected to reach $26 billion this year.
Demis Hassabis, the CEO of Google DeepMind, which operates Gemini, said in a recent interview that he was surprised by OpenAI’s decision to monetize the chatbot through ads this early. Pushing products mid-conversation inside a chatbot could hurt users’ trust in AI as a helpful assistant, he said.
Though Google’s Gemini chatbot doesn’t push ads, last year the company introduced ads in the AI-generated summaries users see atop Google search results. The company also began testing ads in “AI Mode,” a conversation feature on the Google homepage, where sponsored cards appear below the AI-generated search results.
Elon Musk’s Grok, the AI that is integrated into the platform X, also told advertisers last year that it would start testing ads inside chatbot responses as a way to boost revenue and pay for the expensive chips powering AI.
More U.S. shoppers are already turning to AI chatbots, and a Deloitte survey found that trust in generative AI has been steadily increasing. Younger shoppers are using chatbots for comparison shopping, finding deals, summarizing product reviews, and generating shopping lists.
Even without bribing the bots to provide direct advertising, brands are already trying to find ways to get into the good books of AI search results. An entire cottage industry of startups and consultants has emerged to help retailers and brands ensure their products appear in AI search results, a field called Generative Engine Optimization.
The market for traditional search engine optimization was $20 billion to $25 billion, but the potential for AI-driven commerce is much larger, said Amay Aggarwal, a co-founder of Anglera. His company helped Los Angeles-based e-bike and outdoor goods retailer Retrospec adapt its product catalog so that AI chatbots such as ChatGPT and Gemini could accurately recommend the right bikes for specific conditions.
Even as advertising evolves to embrace AI, many of the top AI companies saw value in old-school Super Bowl television ads. In the era of fragmented internet culture, the Super Bowl remains one of the last major shared American television viewing events that draws more than 100 million viewers. AI companies paid up to $10 million for a 30-second spot.
Super Bowl LX was overrun with advertisements from many AI majors, including OpenAI, which promoted its coding platform Codex, and Google’s Gemini, which spotlighted its photo-generation capabilities.
Despite being the “AI Super Bowl,” none of the major AI companies — OpenAI, Google, Anthropic — made the top 20 brands that performed well in generative AI search and conversation during Super Bowl week.
“Being an AI brand doesn’t automatically translate into being remembered by AI,” said Inman of Emberos, whose company produced The AI Influence Index, which tracked the top seven Super Bowl advertisers and how they were showing up in AI queries.
The seven brands that dominated chatbot searches were XFINITY, Bud Light, Squarespace, Ramp, Budweiser, Volkswagen and Dove.
“As ads move into chatbots, the real competition won’t be for attention — it’ll be for how clearly your message survives retelling by AI,” Inman said.
Business
Contributor: Blending hydrogen into gas pipelines would enrich utilities and harm Californians
The people of Orange Cove in Fresno County could soon be an unwilling part of an experiment in dangerous, expensive utility boondoggles. And if California’s gas companies get their way, families statewide will be forced to pay higher energy bills, breathe more indoor air pollution and bear greater safety risks.
Southern California Gas Co. wants to use Orange Cove to test blending hydrogen with natural gas in its pipeline network. This might sound futuristic and clean because it would reduce fossil fuel use, but it would waste $64 million in SoCalGas customer money and threaten this community’s health and safety — without actually fighting climate change.
Worse yet, SoCalGas and two other utilities just petitioned state regulators to skip pilot projects altogether. If approved, they could then request to pump a 5% hydrogen blend across California without demonstrating safety.
The problem is blending hydrogen into pipelines and appliances designed for gas. Hydrogen is leakier and more flammable, and it burns hotter and faster than gas. It can’t be smelled or seen, and burning it increases asthma-causing air pollution in homes and risks damaging appliances. Forcing consumers to burn hydrogen worsens fire, explosion and health risks in our homes, where we should feel most safe
The truth is gas utilities’ hydrogen blending proposals intend to keep customers hooked on pipelines. Utilities earn huge profits on infrastructure investment — over 10% for SoCalGas. The wiser approach for Californians would be to switch from gas to electric appliances, protecting customers from volatile gas prices and toxic indoor air. But that would hurt gas utility profits.
In my state of Colorado, our largest utility, Xcel Energy, proposed mixing hydrogen into the natural gas system serving a Denver suburb. When the community learned Xcel was forcing residents into a dangerous, expensive gas alternative disguised as climate action, they pushed back with enough time to force Xcel to pause its effort.
This story is playing out across the country and the world. In Eugene, Ore., backlash from residents made NW Natural cancel its hydrogen blending pilot. In Massachusetts, state regulators prevented utilities from pursuing similar plans. In the United Kingdom, residents of Whitby and Redcar protected themselves from even larger proposals.
Orange Cove is the next flare-up. SoCalGas began campaigning to blend hydrogen in 2022, but residents recently uncovered the truth and are speaking out accordingly. State regulators are expected to act by June, and their decision will have far-reaching consequences.
SoCalGas’ proposal stems from state policy to slash climate pollution from gas utility systems — a good idea, but a threat to utility profits. In theory, replacing natural gas with hydrogen can help gas utilities cut emissions while still investing in pipelines, because hydrogen can be produced and burned without emitting greenhouse gases.
But that’s where hydrogen’s advantages end.
Let’s air out the proposal’s dirty laundry: SoCalGas’ proposal to blend less than 5% hydrogen into Orange Cove’s system — which serves about 2,000 customer gas meters — would cost $64 million over 18 months. That’s comparable to removing the tailpipe pollution of 100 cars for one year.
That same $64 million could permanently remove the pollution of 12 times as many gasoline cars if used to purchase new electric vehicles. It’s also worth around $32,000 per customer gas meter in Orange Cove — more than enough for the community to install electric heat pumps, heat pump water heaters and induction stoves, zeroing out gas use.
Using that $64 million to fund incentives for cleaner, efficient electric appliances could help tens of thousands of Californians eliminate indoor air pollution and climate emissions.
This price tag is ludicrous for an 18-month experiment. Clean hydrogen is an extremely expensive way to heat homes. Current prices are 10 to 25 times higher than that of natural gas, and even the most optimistic forecasts expect it to remain much more expensive for decades.
Gas utilities claim Orange Cove will “inform the feasibility of developing a hydrogen injection standard” to decarbonize their broader systems, but that hides the truth: Hydrogen blending is a dead end that at best would reduce gas utility climate emissions by less than 7%. California’s gas system was not designed to safely handle more than a small share of hydrogen, so this pilot project couldn’t meaningfully scale up without the wholesale replacement of all gas pipelines and appliances.
Pilot projects seem small in the grand scheme of things, but they lend legitimacy to a bad idea debunked as a climate solution and wisely rejected by other communities time and time again. It would be even worse to ditch pilot tests and skip right to harming Californians with statewide blending.
Hydrogen is not categorically a “false solution” for climate. We need it to clean up things like fertilizer, chemicals and aviation fuel — products without cheaper clean alternatives that are made in specialized industrial complexes overseen by trained technicians.
But California doesn’t need hydrogen to clean up its buildings. Families are already choosing electric appliances for higher-quality, fully clean service. Hydrogen can’t save our gas networks; it can only waste money and delay California’s work to stop climate change.
Forcing communities to use hydrogen also reduces consumer choice. People have the freedom to install electric appliances when they’re ready, using government and utility incentives. With hydrogen blending, homes and businesses would have to use a lower-quality gas whether they want it or not, safety and health risks be damned.
The California Public Utilities Commission plays a critical role protecting customers from utility investments that lock in unjustifiable rate increases. Ultimately, the Orange Cove pilot is nothing more than an expensive waste of customer money with no near-term benefit and minuscule contribution toward California’s climate efforts.
The mountain of scientific literature against hydrogen blending, lessons learned by other regulators and communities rejecting similar pilots, and the voices of Orange Cove residents should be enough to slam the door on this would-be boondoggle.
Dan Esposito is a manager in the nonpartisan think tank Energy Innovation’s fuels and chemicals program.
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