WILL A UTILITY BREAKUP PROCESS START SOON?

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 1, 2019, OR THEREAFTER

BY THOMAS D. ELIAS
       “WILL A UTILITY BREAKUP PROCESS START SOON?”

       It’s starting to look like the great utility breakup that’s been morally justified in California for years may at last be getting underway. Out-of-control wildfires might accomplish what civility and sensible management practices could not do.

       This may be the larger meaning of a $2.5 billion offer from San Francisco government to buy up the in-city electric assets of embattled, bankrupt Pacific Gas & Electricity Co., including power lines, meters, power poles and switching stations. The city offer excludes all PG&E natural gas assets.

       If this can happen in its headquarters city of San Francisco (even as it devised its own self-serving plan for leaving bankruptcy, PG&E did not immediately reject the offer), expect this kind of thing also to happen elsewhere. For sure, PG&E could use the money to help pay off an expected flood of liability judgments against it (over and above the $11 billion it proposes to give insurance companies) for having helped cause the raging blazes of 2017 and 2018, which burned thousands of homes and businesses and left more thousands of its customers homeless.

       If this can happen to PG&E in its home town, who’s to say it won’t also happen to Southern California Edison Co. and the San Diego Gas & Electric Co., both found similarly responsible for devastating wildfires over the last 12 years.

       Between them, these companies have been criminally convicted of negligent maintenance practices, gotten caught in illicit negotiations with government regulators aiming to bilk consumers of billions of dollars and otherwise colluded with the very regulators who were supposed to be protecting electric company customers.

       The misdeeds of both company executives and members of the state Public Utilities Commission have not seen a single individual do even one minute of jail time, despite the deaths they helped cause and the big money they unfairly took from customers.

  

       All that makes California’s electric providers undeserving of survival in their current form.

       Meanwhile, there’s a growing movement to replace the utilities in many of their operations. That’s the proliferating group of Community Choice Aggregations now taking root in many parts of California. These publicly-owned outfits see cities and counties buying up customer-oriented operations of the big electric providers, while using the utilities’ existing transmission lines and billing operations.

       CCAs now operate everywhere from Marin County to Manteca, from Larkspur to Los Angeles County. San Diego wants one, San Francisco has also sought to create its own, which would happen quickly if the city’s proposed purchase of PG&E assets goes forward.

       The utilities dreaded this scene for years, struggling mightily against the growing CCA tide and seeking to hang onto their monopolistic customer base, whether or not they deserved to.

       But PG&E is now desperate for money, especially after failing in an effort to get state legislators to let it issue $20 billion in bonds which might eventually have had to be paid off by customers via increased monthly bills. But PG&E and other utilities have plenty of ways to raise the money needed for their expected tens of billions in debts.

       For one, the environmental group Californians for Green Nuclear Energy (possibly an oxymoron of a moniker) now asks that legislators require PG&E to sell off the Diablo Canyon Nuclear Power Plant on the Central Coast rather than shuttering it in the 2020s, as now planned.

       Other utility company assets can also be sold, from hydroelectric dams to power lines in areas the companies serve. Doing this on a large scale could leave the existing electric companies as little more than operators of long-distance transmission lines, a much-reduced role.

       That could also give the PUC far fewer activities to regulate. Which may be why the commission has long aided the utilities’ effort to thwart CCAs, setting up rule after arbitrary rule to hinder their establishment and expansion.

       But it’s now clear many Californians no longer trust either regulators or the utilities that have long served them and gouged them. Which might make this the time for a wholesale breakup of those huge companies.

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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, visit www.californiafocus.net