Here is a question for progressives of all stripes in Sacramento: Should a Delano family with both husband and wife working in agricultural jobs struggling to make mortgage payments and feed their families subsidy wine country millionaires as well as help pump up the returns of Wall Street hedge fund investors?
Rest assured it is a question Governor Newsom and well-heeled legislators eager to squander stockpiles of tax dollars to launch an alphabet of new progressive initiatives don’t want to be asked.
It is why they are happy to have the lapdogs of PG&E — the California Public Utilities Commission — do the dirty work for them.
The dirty work is engineering the biggest income transfer in California history that takes from the poor to enrich PG&E’s bottom line. It can also be framed as forcing an aging neighborhood of working-class families in the heart of the Central Valley to subsidy lower fire insurance rates for wine country homeowners and the second — and sometimes third homes — of Porsche driving urban dwellers who get away from it all in Tahoe and other wilderness areas within PG&E territory.
PG&E is gearing up to bury 10,000 miles of distribution lines to avoid continuing paying the price for going on three decades of pursuing profits at all costs while cutting back maintenance and even asking for and securing CPUC rate increases for deteriorating power pole replacements and then diverting the money for other uses.
The tab for the undertaking that will cover infrastructure issues PG&E as a for-profit company should have been investing in all along before they started mainlining the Enron business plan to secure high profit margins that led the felony corporation to its first of two bankruptcies in less than two decades is $20 billion.
Guess who is going to pay for the $20 billion in upgrades if PG&E has its way? It is not going to be their buddies on Wall Street who are guaranteed of a return in excess of 10 percent by the State of California assuming PG&E can cease its tendency to channel both the Keystone Cops and the Flim Flam Man simultaneously. It’s going to be the 16 million Californians that enjoy what are already almost the highest energy costs in the nation made possible by the same company that used partial deregulation to sell its assets to itself via a new holding company to reduce their tax bill while hiking power rates.
Like everything else PG&E’s corporate suite pursues regardless of the smiling face heading up the company while pocketing serious seven figure compensation, the little guy is going to pay the price.
This time around, though, if the CPUC goes along with it, they will be shaking down the little guy at the same time to reduce costs to many in the upper middle class that opt to build in wildfire zones.
All of the $20 billion is aimed at burying distribution lines in wildfire prone areas. And while there are plenty of struggling families in those zones, the fact remains Delano, Manteca, Stockton, Gustine, Lathrop, Fresno, Tracy, Kettleman City, Bakersfield, and Chico are not in wildfire zones.
It is also true while much of places like Napa where much of the city has power lines underground people in the past three decades have been flocking to the area to build homes in the hilly, tree-laden terrain near the city. PG&E never assessed them to bury high risk distribution lines that serve such areas.
There are four clear benefactors of the $20 billion gambit by PG&E.
*First and foremost, it is PG&E itself as well as the stockholders. It reduces PG&E’s exposure to liability created by how they operated their company years before climate change entered the political vernacular.
*It reduces fire risk to existing homeowners in wildfire zones whether they live in neighborhoods with lines already buried or on in rural areas where they are not. And by reducing fire risks, it reduces exposure to insurers that has a direct impact on a homeowners’ pocketbook.
*It helps make developing in wildfire zones more attractive which benefits landowners and builders in the wine country and upscale Sierra enclaves and not families in Delano.
*It has the potential to reduce the costs California as well as the federal government incurs fighting wildfires, assisting those made homeless, clearing up the mess and restoring wild lands.
It is why — unless Sacramento is stuffed full of phony, limousine progressives — there are only two reasonable alternatives.
The first is for PG&E to do the underground work on their own dime which means lowering profits for their stockholders.
As it is right now, the CPUC requiring ratepayers to foot the bill is akin to a judge ordering the families of victims killed by drunken drivers to pay for collateral damage to road signage, streets lights, and trees ordered after said drivers are convicted of manslaughter. Keep in mind PG&E copped to 84 counts of manslaughter in the Paradise fire that was the result of doing business the PG&E way.
The second is for the state to force the breakup of PG&E and leave it to the publicly owned agencies, private concerns, or even the state itself that might buy segments to go ahead with under grounding or much more aggressive vegetation and distribution system management.
There is actually a third alternative. PG&E could go ahead with their vision to bury 10,000 miles of lines and finance it by a combination of lower returns to stockholders and from the sale of select segments of their system such as the Ripon, Escalon, and Manteca portion to the South San Joaquin Irrigation District.
PG&E could easily pick up a couple billions of dollars by selling parts of its service network. Amazing as it sounds, that’s what companies that don’t rely on corporate welfare and government guaranteed profits often do when they have to restructure and invest to survive.
If bond debt to do the work or purchase part of the service area to help finance burying lines is held and paid off by future or existing public agencies that obtain segments of the PG&E system then going forward the people they serve will benefit from that investment.
The approach PG&E wants to pursue will make ratepayers foot the $20 billion bill and assure Wall Street hedge funds and PG&E executives of all the financial benefits with no risk.
It is time to pull the plug on PG&E’s gravy train so the working and middle classes can benefit from investments they have been forced to make over the years that has left PG&E rolling in the dough and ratepayers holding the bag.