Someone needs to save Northern and Central California from PG&E.
And if folks in Sacramento don’t believe PG&E is the No. 1 threat to the safety of 16 million people or 40 percent of the state’s population, they need to look at statistics compiled by the California Public Utilities Commission and Cal Fire:
· PG&E — based on mandated state reporting that started in June 2014 — has started more than a fire a day since then for more than 1,500 fires.
· 16,000 PG&E power lines fell between 2013 and 2017 or one every three hours. Of those, based on PG&E reporting, 30 percent remained energized posing a severe fire and public safety hazard. A number of the fallen lines were caused by trees falling but many were the result of failing PG&E equipment.
· PG&E equipment has been tied into the start of 17 significant fires in 2017 that charred 193,743 acres, destroyed 3,256 structures, and killed 22 people.
· PG&E is being investigated for its possible role in starting the deadliest wildfire in California history in 2018. It wiped out the Town of Paradise, killed 86 people, and destroyed 14,000 homes. Minutes prior to the start of the fire PG&E reported the failure of an 115,000 volt line that fell to the ground.
That is just the tip of the iceberg.
In recent weeks it’s been revealed exactly how cavalier PG&E has been toward safety. Part of the settlement for the 2010 incident in San Bruno, where an overtaxed natural gas line exploded killing 8 people leveling a neighborhood, was the for-profit utility to take specific steps to improve safety of the natural gas system. They have failed to do so despite being on federal criminal probation.
This is on top of repeated evidence that PG&E for years was granted rate increases by the CPUC that included addressing the replacing of aging equipment such as power poles PG&E then failed to do so.
And whether a PG&E customer in Manteca, Lathrop or Ripon — or anywhere else for that matter in the utility’s service territory — is in immediate threat of being blown up by a failed natural gas line or burned up by a wildfire started by aging, faulty or damaged electrical equipment, they are going to pay a heavy price financially and not just through higher rates.
PG&E as of Friday was worth $9.12 billion. Back in October they were worth $29.32 billion. Experts conservatively estimate PG&E is facing $30 billion in liability through lawsuits. Keep in mind the law the legislature passed last year to help shield utilities from bearing the full brunt of financial responsibility for fires their equipment starts does not apply to 2017 nor any fire in 2018.
The solution that’s been tossed around is to make the ratepayers ultimately pay for PG&E’s less than stellar management when it comes to replacing aging and failing equipment in a timely manner and addressing safety concerns. That means much — if not all — of PG&E’s liability from lawsuits will be securitized and tacked onto monthly ratepayer bills for decades to come. No one would escape the charge even if your electrical needs are met 100 percent from solar. If you have a PG&E meter of any type you are on the hook.
Unfortunately, there is more.
Insurance firms are no longer willing to underwrite PG&E’s exposure to wildfire liabilities for obvious reasons. PG&E is toying with bankruptcy which brings up a whole new set of issues when wedded with the fact their bonds have now slid into junk bond status with many stock experts anticipating they will fall even deeper.
Once that occurs, how will PG&E be able to buy electricity when needed on the spot market that relies heavily on credit-backed transaction?
At the same time given the growth in the PG&E customer area, what guarantees are there when deposits are made for work to be done that it will even happen? Already PG&E is unreliable when it comes to meeting promises for installing and/or making connections for new development.
Then there is an issue of PG&E being investigated by the California Attorney General’s office for possible criminal prosecution for manslaughter connected with various wildfires based on their questionable safety record. That doesn’t exactly bode well when you’re trying to sell stock that has plunged 62.79 percent in the past three months or even when you’re trying to hawk junk bonds to cover ongoing costs or liabilities that come with extremely high interest rates due to the risk investors are taking when it comes to your ability to pay them off.
You’re also not likely to buy stock in a company that faces the specter of being broken up in to separate concerns or being taken over by regional public agencies that could be created under ideas being batted around by state regulators and legislators.
And let’s not forget how PG&E — in its wild frenzy to crank up profits after it sold Californians a bill of goods about electricity deregulation — plunged much of its service territory into rolling blackouts.
Why we are still at the mercy of PG&E should be the No. 1 issue in the 2020 legislative elections given how Southern California for-profit utilities have faced the same daunting challenges but haven’t destroyed ratepayers’ property or killed off customers anywhere near PG&E’s pace.
San Diego Gas & Electric, as an example, several years ago started replacing their most vulnerable wooden power poles that are part of distribution systems serving neighborhoods or customers in problematic rural areas with steel poles. Some 16,000 have been replaced to date. They also installed an intensive wind/weather monitoring system to provide critical information in a timely manner to manage their system so they can cut off power when conditions become dangerous. PG&E has just started to get around to doing so.
At the end of the day, PG&E is a privately-owned for-profit business propped up by monopoly status granted to it by the State of California that also through its approval of rate increases guarantees PG&E a 10.5 percent return or profit on every $1 they collect.
The CPUC’s ineffective oversight hasn’t helped the situation. That said, with each passing day it is clear that Sacramento lawmakers — either through inaction or failure to put pressure on PG&E via the CPUC — share the blame for the fiasco known as Pacific Gas & Electric.
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.