CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 9, 2012 OR THEREAFTER
FOR RELEASE: FRIDAY, NOVEMBER 9, 2012 OR THEREAFTER
BY THOMAS D. ELIAS
“CUSTOMERS KEEP PAYING FOR UTILITY BLUNDERS”
When a car company blunders by
installing, say, a power window switch that might catch fire, it issues a
recall and fixes – for free – as many as 2.5 million cars. Toyota issued
precisely such a recall notice this fall, the company paying heavily for its
mistake.
But when a utility company sees one of
its gas pipelines blow up, killing eight and putting many more residents in a
dense San Francisco suburb out of their homes, it seeks to have its customers
pay for most of the fix that must follow. Pacific Gas & Electric Co. is
trying that right now.
Similarly, when other utilities see
their nuclear power plant shuttered for most of a year because of a flawed part
and a small radiation leak, with little chance of restarting anytime soon, they
expect customers to keep right on paying as if nothing happened.
That’s what Southern
California Edison Co. and San Diego Gas & Electric Co. have done since
their San Onofre generating station shut down last Jan. 31, with customers
paying $54 million a month, or $28 so far per person their vast service areas.
That’s $28 per person, not per customer household.
The good news is that besides federal
authorities that supposedly assure utility safety, a state commission regulates
rates. The Public Utilities Commission (PUC) can quickly halt any plans big
California utilities have to keep soaking their customers, to keep profiting
from their own dangerous, sometimes disastrous mistakes. Now, after Edison and
SDG&E kept soaking the customers for the more than nine months since the
San Onofre shut down, the PUC at last will take a look. It will soon
“investigate,” with customers continuing to pay while that probe goes on.
But the PUC has been anything but a
consumer watchdog under its current president, Michael Peevey – first appointed
by ex-Gov. Gray Davis, reappointed by ex-Gov. Arnold Schwarzenegger and kept on
as president by current Gov. Jerry Brown. Peevey is a former president of SoCal
Edison. You’re dreaming if you expect him to recuse himself from cases
involving his old firm.
Under Peevey, the PUC has been a
steadfast lapdog for utilities. This involves not only rates, but also
approvals for huge solar thermal power plants now under construction in
California deserts that require massive investments in hundreds of miles of new
power transmission lines. Those billions will be added to the “rate base” of
each utility company, meaning they not only get repaid by customers for their
investments, but are assured of a “reasonable rate of return” on those
investments for the next 20 years.
That means
billions in guaranteed profits even if the solar plants don’t produce nearly
what’s planned. Billions that would not accrue to them if the PUC instead
encouraged putting solar photovoltaic panels on most buildings in the cities
they serve. The electric output would likely be the same, but the cost for
transmission lines would be next to nothing.
Is it any wonder the big utilities
love big solar plants, even when they don’t own them?
Similarly, PG&E wants to profit
from whatever it spends on fixing its hundreds of miles of gas transmission pipelines.
Never mind that consumers made payments monthly for decades earmarked to assure
safety and reliability of gas pipelines all over California. The National
Transportation Safety Board concluded last year that – at least for PG&E –
inspections and repairs have long been inadequate. So the money collected all
those years plainly wasn’t used as it should have been.
Now the utility wants customers to pay
84 percent of the $2.2 billion it says it will spend to fix its pipelines. A
PUC administrative law judge proposed instead that customers pay 55 percent.
Chances are, the PUC will split the difference, with customers paying about 70
percent. And PG&E would likely get to put the full amount into its rate
base, ensuring a $300 million profit over 20 years from its deadly negligence.
At the same time, the federal Nuclear
Regulatory Commission probably won’t let even one of San Onofre’s two
generators back online for many months, but it’s no sure thing the PUC will
stop the consumer ripoff (as the majority owner, Edison operates the plant).
What’s more, even if Edison and
SDG&E were suddenly told to stop collecting for operating the inoperative
San Onofre (don’t bet on any such order coming soon), they’d keep the hundreds
of millions they’ve already collected.
If all this seems absurd and wrong –
giant companies profiting from their own dereliction – it is. But it's not
likely to change as long as there is no mechanism for shortening the five-year
terms of utility commissioners and getting rid of those who act as tools of the
companies they are supposed to regulate.
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Email Thomas Elias at tdelias@aol.com.
His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment
and the Government’s Campaign to Squelch It," is now available in a soft
cover fourth edition. For more Elias columns, go to www.californiafocus.net.