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The 'botched power shut-offs' details
"The California Public Utilities Commission’s independent consumer watchdog arm is recommending that Pacific Gas & Electric be fined nearly $166 million for the company’s failure to properly warn customers of a series of intentional power outages last fall.
At their height, the so-called public safety power shut-offs of October 2019 left nearly 1 million PG&E customers across 38 counties without electricity, some for as long as a week.
...the San Francisco-based company failed to notify tens of thousands of customers that blackouts were imminent, including hundreds who depended on steady electricity to power life-sustaining medical devices. Many people couldn’t access PG&E’s website for several days, as it was overwhelmed by visits from Northern and Central California residents scrambling for information".
PG&E are between a rock and a hard place: they have huge problems with aged infrastructure that catastrophically fails during fall wind events, causing ignition of dry vegetation, some of which they are responsible for maintaining.
After being previously fined for previous fire damage (the money was distributed to affected counties such as Sonoma) they are erring on the side of caution by shutting down when the wind becomes too strong during 'red flag' fire risk periods.
Sonoma County isn't spending their windfall PG&E fine money on fire prevention though, they are spending it on buying hotels to house street people in permanent 'home' hotel rooms, augmenting Governor Newsom's 'Homekey' cash handouts.
This is a core California infrastructure problem, and along with crumbling roads and bridges is symptomatic of the challenges California citizens have to deal with more and more.
How does any kind of fine for PG&E not end up being a regressive tax? As long as they are the only supplier in NorCal the costs will just be passed on to all NorCal residents.
The property I just bought in northern CA was a trip. In the full title report I got documents dating back to 1880 - all hand written. I got to read about various families that owned the land, and transferred ownership to various companies, including "Northern California Power Company Consolidated" in 1917 and eventually "Pacific Gas and Electric Company" as of December 10th 1948.
It is a total mind-fuck how tied up we are with that company.
But, I do have some hope that at some point in the future mini-grid technology will replace these large juggernauts.
Because the rates they charge customers are highly regulated. PG&E is simply not allowed to raise rates to pay fines.
Also, they are not the only supplier in NorCal, SMUD and many community choice energy organizations exist.
Where will the money come from to pay the fines?
They could take it out of the profit portion of the rates, or cut executive pay. But knowing PG&E they will cut back on maintenance, maybe sell a power plant; most likely creditors will pay then lose out the next time they file for bankruptcy.
> But knowing PG&E they will cut back on maintenance
That would be a decision made by the government of California, not by PG&E. Their budget has to be approved by the state.
There were some fun articles back when they were blamed for fires about how PG&E had spent the last several years trying to allocate money to equipment maintenance only to have their budget rejected whenever they tried.
Profits will be reduced?
Hopefully shareholders, ultimately.
Let me guess who would ultimately pay a fine like that. Anyone except shareholders and the people responsible.
Can someone explain how utility companies aren't part of the gov in the US of A? How is it in other countries? Are they private enterprises?
It terrifies me that some private corporation is in charge of public infrastructure that cannot be controlled in capitalistic marketplace. For e.g., water utility company has no interest in the safety of water as far as there aren't any laws preventing them from saving money, and there isn't much of a competition for the public to choose from.
With government handling public utilities, it comes with other challenges such as inefficiencies and quality of service but lot of US gov departments do well - US National Park Service, US National Labs, why can't Dept of Energy run utility companies?
PG&E is kind of public. We just structure it in a way that it’s technically private. This has a lot of clever tricks like the fact that if it loses a ton of money it can go bankrupt without the state of California going bankrupt or having to cover all the losses.
Also, PG&E cannot just set whatever prices they want etc. the state has quite a bit of say over it.
PG&E is only public in the same sense as in IPO. They are regulated more than most industries, but make their own decisions on profits and investments. Which is why SoCal Edison and SDG&E are so much better off, better corporate boards.
The state owns no share of the company, like say Norway does from its national oil company. California is prohibited from owning a portion of a company (outside of things like CALPERS), so it really cannot impose a true socialist model without violating the state constitution. It must own 100% or 0% only.
My mind is unable to reconcile the claim that CA is prohibited from owning a portion of a company and yet CALPERS invests most of it's ~$350B in companies, and quite a few CALPERS board members come from the CA government, and CALPERS is known as an activist shareholder that uses its ownership in companies to influence them.
So the more accurate statement seems to be CA is prohibited from owning a portion of a company, except not really.
> Can someone explain how utility companies aren't part of the gov in the US of A?
Ronald Reagan. His administration started the deregulation of public utilities. While that's a bit different than taking gov't run services private, but I see deregulation of industries as the cause for a lot of issues of today. It took a while for them to take rot and fester, but we are seeing the results of it all today.
Legitimate question, not sure why you are getting downvoted.
Of all of the utilities, power & water should be considered basic rights. Yet, I find it curious how cities provide water and sewage, yet power utilities are private. Solid waste also tends to be private. There are a few cities that provide power. Burbank, CA is one that I have personally had an account. I would include gas in that, but if you have power & water, you can do with out gas.
In today's age, I think a basic internet connection (5mbps down/1Mbps up) should be required at all addresses, and then premium packages with higher speeds could be purchased. But that's a can I'd be happy to kick down the road if we could get power&water guaranteed to all first.
A lot of ppl are under the impression that pge is a private company. That's not the case. Its a heavily regulated government controlled monopoly and laws prevent any competition.
Time to deregulate and let new competition in!