“I came to California with one basic purpose: Let’s make sure we don’t kill anybody at our operations.” — PG&E CEO Bill Johnson after meeting with Gov. Gavin Newsom
It is a sad day when the head of an American corporation — and the nation’s largest for-profit utility — essentially tells the world his goal is not to kill off customers.
At first you have to resist the urge to make a snarky remark wondering whether the PG&E legal department in order to reduce the company’s liability will require customers to sign a waiver holding the utility harmless in exchange for turning — or keeping — power on as they have now equated keeping electricity running to your home and business is as risky as tandem jumping out of an airplane at 10,000 feet.
But then you read about all the dire warnings if the governor goes through with his threat to take over PG&E if the once revered utility doesn’t get its act together by June 30. First there are the Wall Street interests that warn the public will be saddled with bond debt up the wahoo if PG&E is acquired and carved into more manageable public owned entities. Besides the cost of acquisition there is the issue of cleaning up the mess PG&E created by not re-investing while they squandered 10 years of tax credits that eliminated their federal tax obligations so they could sweeten corporate bonuses and line the pockets of Wall Street investors.
If you think about their warnings for a second, it should scare you. They are essentially saying if PG&E is left standing and gets rate increases needed to correct the results of their reckless management that made profits — the holy grail of 555 Beale Street in San Francisco — soar that they (Wall Street investors) will be able to fleece you even more than if they bought public bonds sold so jurisdictions could purchase and upgrade the PG&E system. Wall Street, remember, is driven by returns.
Then there is the Dr. Kevorkian of utility CEOs telling us PG&E needs to remain standing as a for-profit utility because if it is broken up the urban areas will benefit immensely at the expense of lower income rural areas.
Such a sweeping statement is a flat out lie. Up along Highway 299 in Northern California in the Trinity Alps is a place called Weaverville that long before PG&E went from simple storm trooper status to become the Darth Vader of California utilities was being marginalized by high power costs. PG&E rates were making it economic unfeasible for the community’s largest employer — a sawmill — to remain in business.
In order to save their community from what at the time was certainly a much kinder PG&E, Trinity County came up with a plan to break away from PG&E and form their own public utilities district. To make a long story short, they were able to save local jobs. Their rates started flat-lining and when they did start to go up they were — and are — significantly lower than what PG&E charges. Better yet they have been able to maintain their lines and reduce fire issues by clearing branches and vegetation. That is something PG&E has been a spectacular failure at doing.
Trinity Public Utilities District, which has been free of PG&E tyranny since the mid-1980s and therefore not subject to being burned to a crisp from aging and dilapidated equipment, parted ways with the company using the same route South San Joaquin Irrigation District has been pursuing.
The truth is there are a number of small public utility districts in this state and country — as well as municipal systems such as the City of Roseville, Sacramento Municipal Utility District, Santa Clara Valley, and Modesto Irrigation District — that have a proven track record of not only reliable power delivered safely at substantially lower rates by PG&E but doing so with up-to-date maintained systems.
Using Johnson’s rationale MID rates, because they have 15.8 million less customers than PG&E, and Trinity Public Utilities District rates, because they have 15.994 million less customers than PG&E, should have higher rates and a system that is hopelessly archaic, unreliable, and deadly. The exact opposite is true.
If you are among the 16 million people as well as businesses that are going to pay for updating the system to deliver the essential commodity of electricity whether you do so as a PG&E ratepayer or as an honest-to-goodness real public utility ratepayer, you would want to go with the one where you can control your own destiny not to mention have lower rates.
Look at it this way. What makes more sense in the long haul for keeping costs in check and being able to have a bigger say in what is done to your home — renting or owning?
So, when did PG&E start losing its mojo? The answer can be traced back to the 1990s when the top brass wasn’t happy with simply a 10.5 percent guaranteed return or profit.
They started whittling back the worker bees in the field. It included getting rid of area managers — an odd move given the weakness of a company the size of PG&E is they can be isolated from rumblings in the hinterlands.
Tony Gutierrez — the last area manager for the Manteca PG&E office that also encompassed Lathrop, Ripon, and Escalon — functioned as an ombudsman for customers.
If a farmer, resident, business or government agency was having problems with PG&E service the area manager ran interference.
They were well-versed in the trouble spots within PG&E’s local distribution system. Not only were they the face of PG&E but they prevented the company from slipping when it came to safety and reliable service.
At first PG&E slowly neutered the authority of area service managers as they consolidated more power farther away from the customers. Then they got rid of area service managers.
That was just a beginning. They started taking decision making authority away from those on the next rung of the ladder. Against the advice of the men and women who actually are in the trenches working to keep electricity and natural gas flowing to customers, there was even more consolidation.
The biggest disaster was consolidating construction management decisions in San Francisco instead of allowing regional management in places such as Stockton that had multiple counties they were responsible for overseeing.
That connected with manpower reductions soon created situations where many businesses and farmers had to wait over six months to get needed connections in place on new meters. Slashing manpower, eliminating area managers, and consolidating decision making in San Francisco did wonders for PG&E’s bottom line while costing costumers grief and money with construction delays.
Back then PG&E didn’t have to go searching in places like Tennessee to seek out men or women that could help them do the right thing and not burn or blow up customers. They had them on the ground and accessible to ratepayers that don’t qualify for wine and dine privileges with PG&E brass at a Napa Valley winery on the first anniversary of a destructive wildfire in that community that happened to be the first day they started cutting power on a mass scale.
Greed is why PG&E caused the deaths of 93 people between Butte County and San Bruno. Greed is why PG&E singlehandedly has destroyed more than 20,000 homes, schools, hospitals, stores, and other buildings. Greed is why PG&E is going through its second bankruptcy in less than 20 years.
PG&E — the Godzilla of for-profit utilities — is not too big to fail. It’s too big to be managed and entrusted with the well-being of 16 million Californians.
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.