CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JULY 16, 2019, OR THEREAFTER
FOR RELEASE: TUESDAY, JULY 16, 2019, OR THEREAFTER
BY THOMAS D. ELIAS
“WILDFIRE FUND PLAN: CONSUMERS WILL BAIL OUT UTILITIES”
There’s
one word Gov. Gavin Newsom has assiduously avoided in the days since he
proposed a new $30.5 billion Wildfire Fund that would help the state’s big
privately-owned utilities pay off damage claims from forest and brush fires
their lines have sparked or helped to cause: Bailout.
This
fund would shore up utility finances as they face tens of billions of dollars
in potential judgments from lawsuits that followed fires they admittedly helped
cause via negligence during 2017 and 2018.
Under
pressure from Wall Street investment firms, Newsom proposed that utility
customers (often euphemistically called “ratepayers”) and utility shareholders
share the costs. The legislative form of Newsom’s plan makes it clear customers
would be stuck with at least half the costs of utility negligence.
This
bill, AB 1054, co-sponsored by Democratic Assembly members Chris Holden of
Pasadena, Autumn Burke of Inglewood and Republican Chad Mayes of Yucca Valley,
places the burden of proving utilities acted prudently on the consumers,
reversing many decades of precedent.
There’s
an unasked, unanswered question here, ignored largely because of the sheer
power of the utility lobby and its financial allies, all of whom could lose big
bucks if other utilities follow Pacific Gas & Electric Co. into bankruptcy:
Why should customers/ratepayers foot any bills when they did nothing to cause
these fires?
It’s a
fact that customers’ monthly bills for decades included money earmarked for
utility maintenance. That tab came to more than $6 billion over almost 50 years
before the latest spate of big blazes.
State and federal regulators
never tracked what the companies did with most of that money. As a result,
California saw the fatal San Bruno natural gas line explosion in 2010 and huge
amounts of vegetation sitting on or near power lines before the start of the
state’s largest and most costly fires ever during 2017-18.
If much
of the maintenance money went to executive bonuses and other optional items,
another question arises: Do these irresponsible monopoly companies deserve to
survive?
For
sure, there are other ways PG&E, for one example, could raise whatever
money it needs to pay off upcoming negligence judgments. Here’s one: sell off
its natural gas division and some of its electric assets.
This
could produce many billions of dollars, exact amounts depending on how many
assets are sold.
AB 1054
contemplates none of that. It would keep the same companies that damaged
thousands of lives in business. And Newsom asked that his Wildfire Fund plan be
rushed through in a matter of a few weeks, urging passage by July 12.
“It’s a
massive hijacking of the state of California,” says Michael Aguirre, former
city attorney of San Diego.
Newsom’s
rationale: “Financially unstable electrical utilities will put wildfire victims
in jeopardy and cause California families to see their electrical bills
skyrocket,” he said, parroting the utility line. No wonder PG&E stock rose
sharply after release of his plan.
But
would there be so much as a glitch if Warren Buffett’s Oregon-based Portland
General Electric took over gas operations in Northern California? Even the
company initials would be the same. And what if the state’s publicly-owned
Community Choice Aggregation electric outfits bought up PG&E dams and power
lines? Why would that cause service problems?
Meanwhile,
Newsom cleverly devised his plan so customers rescuing the undeserving
utilities would barely notice their new payments. He would continue a current
$30 per year fee that was about to expire. Bills wouldn’t change until after
the next huge fire piles on even more claims. Business as usual would continue
at companies that spent many years mismanaging safety operations.
The governor also wants
utilities to develop safety plans to be OK’ed by the state Public Utilities
Commission. Never mind the PUC’s long history of kowtowing to utilities,
favoring them over their customers/ratepayers.
How
could consumers be sure the new safety plans would be worth the paper they’re
printed on? This is the same PUC that has long ducked its own safety
responsibilities by hiring far too few inspectors to check all power and gas
lines.
So
Newsom’s fund can only be described with the one word he badly wants to avoid:
bailout.
-30-
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, visit www.californiafocus.net
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