I do not believe that this is accurate. California Investor Owned Utilities (IOUs) have had their profit decoupled from revenue since 1981. [0]

The Federal Energy Regulatory Commission (FERC) allows for an equity rate of return on assets of approx 10% (9.3). [1]

As a result, California IOUs don't have an incentive to sell more power, but do have an economic incentive to build more assets. Asset construction is driven by growing peak demand. Or under-investment in O&M.

[0] https://www.sciencedirect.com/science/article/abs/pii/S09571...

[1] https://www.utilitydive.com/news/ferc-lowers-pge-transmissio...