Let’s drop the charade.
PG&E is not Sears.
If Sears steers into bankruptcy there’s still Kohl’s, Macy’s, JC Penney, and an endless list of other places to buy clothes, appliances, and such. Consumers have choices and won’t have their ability on what clothes or appliances they can buy constrained by a bankruptcy court or even the price they pay for them.
That is not the case with Pacific Gas & Electric. They are a government protected monopoly. You basically have no choice if you want natural gas or electricity delivered to your home you have to use PG&E facilities.
Entering into bankruptcy treats consumers as forced fall guys for colossal and systematic mismanagement failures and wanton disregard for public safety that PG&E brass have benefitted from handsomely over the years thanks to massive bonuses they got after pushing the for-profit utility to the brink of bankruptcy the first time, pay raises for company actions that laid waste to a San Bruno neighborhood, and obscene golden parachutes for excellence in attaining “BBB” status — burning, blowing up and bankruptcy.
There are 150 billion solid reasons why the California Legislature needs to intervene now and block PG&E from filing bankruptcy. Such a move would not be a precursor to the state bailing them out, but rather the first step in breaking PG&E up into regional/community public agencies to operate retail distribution systems similar to the Sacramento Municipal Utility District and Silicon Valley Power.
Assuming U.S. District Judge William Alamo is right and the PG&E price tag connected to his proposals is correct, consumers can’t afford to have PG&E saved by a bankruptcy court.
The judge is overseeing a jury verdict in connection with PG&E’s 2010 handiwork where wanton disregard for pipeline safety requirements led to the leveling of a San Bruno neighborhood and the for-profit utility killing eight customers and injuring another 54 customers.
The judge believes PG&E, by letting conditions go unchecked that led to deadly wildfires, is in violation of that verdict. He has proposed that the court implement his proposals to prevent PG&E equipment from starting more wildfires. PG&E responded not by disputing the need for such work but saying it would cost $150 billion and would force massive rate hikes.
Let’s be clear. PG&E gives a charred rat’s behind about how much they suck out of ratepayers’ pockets.
PG&E has now admitted in a court filing they need to do $150 billion worth of work to assure they won’t burn customers’ homes and take a town or two out at the same time. They also pointed out they would need to pass the cost on to ratepayers.
For those naive enough to think this is only going to cost PG&E customers ultimately another $150 billion so they don’t have to live in fear PG&E will obliterate Northern California via wildfires their equipment causes, you need to stop believing in the dog and pony show that the California Public Utilities Commission keeps parading out every time one of the public utilities they are supposedly serving as watchdogs for the public interest rate gouges, blows up, or burns out California residents.
PG&E would not have accumulated a backlog of $150 billion worth of measures needed to protect the public if the CPUC acted as a public watchdog instead of PG&E’s lapdog.
Allowing PG&E to continue to exist means the massive backlog in safety measures that PG&E has accumulated by not addressing them will translate into ratepayers footing the $150 billion bill as well as a $16.75 billion profit on top of that thanks to their 10.5 percent profit guarantee. In other words, based on how the CPUC operates PG&E will profit handsomely to the tune of $16.75 billion for wantonly ignoring safety concerns over the course of decades and doing what they should have been doing all along by replacing aging and faulty equipment and maintaining power line right of way. And they will be able to do it all on the back of their captive customers courtesy of the State of California.
That’s why PG&E could easily line up $5 billion in credit as they slouch toward bankruptcy and Wall Street opportunists are still buying PG&E stock at fire sale prices.
If PG&E was split into public power companies, the $16.75 billion customers would have to pay so PG&E can profit for their past sins would go away leaving only a $150 billion bill to cover by new regional power agencies.
Those public power agencies would have a high stake in addressing zoning and development practices developed and executed without wearing blinders that increase the ability of wildfires to spread.
The risk for wildfire liability would be shifted to the areas that through development patterns have significantly increased their exposure to disaster. Rest assured such regional power agencies’ feet would be put to the proverbial fire to make sure lines are maintained and proper tree clearance is obtained.
Bankruptcy court would only allow the self-serving PG&E business model to continue for the benefit of bigger returns for investors and fatter compensation for company executives at the expensive of ratepayers as well as rank and file PG&E workers.
Electricity is an essential in the modern-day world as drinking water, sewer service, and solid waste collection.
With water, sewer service, and solid waste California jurisdictions have the option to provide the service, contract it out, or sell it to a private company that is well-regulated.
Although the state constitution allows local jurisdictions to use eminent domain to acquire electrical power distribution systems, PG&E — as demonstrated in San Francisco, Davis, and South San Joaquin County — breaks any rule necessary to make sure that doesn’t happen whether it is by wanton violation of campaign laws or hacking into computer systems of government agencies.
And before you shed a tear for PG&E whining about the unfairness of eminent domain, they use eminent domain on a daily basis to run roughshod over property owners.
It’s time the state ends the gravy train for Wall Street investors and a handful of PG&E executive suite comrades in milking the system that is made possible by putting safety over profits.
PG&E has had more than their share of chances to right long running systematic wrongs.
The state believes PG&E is a prime suspect in turning Paradise into hell and in doing so may have been culpable in 86 deaths. And while the PG&E appears off the hook for the deadly 2017 Tubbs Fire-Napa Valley wine country wildfires that killed 22 the state believes they played a role in a number of other wildfires that year.
PG&E’s pending bankruptcy filing under the convenient cover of wildfires gives them the opportunity to shed $31 billion in green power contracts that have proven to be a money losing proposition and even chip away at other profit reducing expenses such as the 25 percent discount of electricity and natural gas PG&E’s 20,000 employees currently enjoy.
California needs to break PG&E up and not give it a second chance at life.
This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209.249.3519.