There is strong indication Pacific Gas and Electric is responsible for the Camp Fire, the largest and most deadly wildfire in California history. With the possibility the privately owned utility might look at passing on the cost to its customers, California lawmakers should look into revoking PG&E monopoly status instead.
It’s true that years of drought and rising climate change has already primed California to be a tinderbox, however, regardless of these factors, PG&E has increasingly been found responsible for major fires in the state. Its inability to meet these new realities is largely a creation of its own making. The 2010 San Bruno pipeline explosion and fire, 2015 Butte Fire and the 2017 North Bay fires are primary examples of the deadly disasters caused by faulty PG&E equipment. To say these incidents were just accidents ignores the obvious repetitive nature of their frequency. However, beyond the proof of a growing pattern of liability by PG&E lies deep-rooted mismanagement and an inability to oversee itself. PG&E’s size serves as the true origins to its faults. To put it in the words of state Sen. Jerry Hill, D-San Mateo, “They are too big to succeed.”
In January of 2012, the California Public Utilities Commission published an audit of PG&E in response to the 2010 San Bruno explosion. It found that for 15 years, PG&E had diverted roughly $100 million from customers marked for safety and operational improvements to payouts for executive bonus and stockholders. The diversion of safety funds continued through 2017 when $246 million earmarked to move power lines underground, went either unspent or to unrelated projects without public knowledge. In the same year, PG&E was widely criticized for doubling its top executive’s compensation to around $8.6 million. All throughout the years, it continued to raise rates, cozy up to their CPUC and lobby against efforts that would be costly to it. In just this year, PG&E spent nearly $1.7 million lobbying California legislators. Its efforts largely spawned the passage of Senate Bill 901 signed by Gov. Jerry Brown Aug. 3. A key change in the bill allows utilities like PG&E to pass on their fire-related expensive directly to consumers. While the effects don’t begin till 2019, that hasn’t stopped PG&E from just recently requesting approval to raise rates due to the Camp Fire.
While PG&E reasons that the money is needed to improve its systems against wildfires, its need to remain profitable to stockholders, fiscal mismanagement, nepotism and political solicitation have proven that PG&E cannot be trusted with any state government or consumer bailouts. The conundrum then becomes PG&E either declaring bankruptcy or passing on its negligence to ratepayers. For California lawmakers, the solutions to these issues lie in repealing PG&E’s monopoly status in California. The state should then allow local jurisdictions the choice to buy and assume control of pieces of PG&E that operate in its borders.
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Breaking PG&E’s monopoly isn’t without its share of difficulties. PG&E has more than 20,000 employees and numerous retirees under its wing. The cost of absorbing the infrastructure and labor could be negotiated between the California Public Utilities Commission, the local jurisdiction in question and PG&E. Safeguards for existing employees and pensions would be required to be matched by local jurisdictions as a legacy obligation while being insured by the state.
While it would be a significant financial commitment to cover for local jurisdictions, the choice to control their own power, utility infrastructure and manage their own services would be in the local hands. Long-term bonds, taxes and payments would be given to voters and elected officials to choose on. Such control would not only inspire marketlike competition for PG&E, it would give consumers more of a voice in their utility service. Counties like Marin, San Francisco and San Mateo have already started to provide local energy to their residents. The mechanisms need only be set up by the state instead of spending its resources pursuing bailouts for PG&E.
More than a half a century after the company’s contamination of the groundwater in Hinkley, California, PG&E has continued its negligence earning the reaction, “They’ll never learn.” Enough Californians have lost their property, homes, friends, family and lives to the disasters PG&E has caused over the last decade. With the devastation of the Camp Fire, California’s ratepayers don’t deserve to pay continually for their deadly failures and PG&E should not remain a monopoly.
Alex Melendrez is a member of the San Bruno Park and Recreation Commission and is active in San Mateo County’s Democratic Party. The views expressed are his own.
I understand the emotional need to blame something, anything for the Camp fire but…
In 2016 a unanimous bipartisan Bill was submitted to the governor addressing the forest hazards and safety AND THE removal of dead and dry trees near PG&E lines. The governor vetoed this. This was shortly before the devastating Sonoma fire. The lack of accountability being directed at Governor Brown’s office is appalling to me.
As a former PG&E middle-management employee who was downsized in the early 1990's I would place the blame on PG&E's decision in the late 1980's to change their primary mission of customer service and engineering to focus instead on financial results. We were indoctrinated in enhancing 'shareholder value' instead of traditional customer service and, albeit costly, preventative maintenance all of which were then suddenly considered old school. It took a while to destroy a solid company but thirty years later the results of that decision have been devastating and have directly attributed to the explosions and wild fires, mostly due to poor maintenance and callous senior management. What is needed is a new board of directors and a new crop in the senior management ranks. The company has tremendous resources and highly skilled employees who do the actual work. De-monopolization is not the answer, change in executive management is.
Really good points Dirk. I think they lost a high value employee in you. The change in incentives and corporate outlook says it all. We might want to look at the northern European models of delivering electricity and managing liability for more ideas as well. While the old PG&E was the model during the Erin Brockovitch period with the water pollution denials and its arrogance and bullying, there were still good things that got tossed out as well.
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(3) comments
I understand the emotional need to blame something, anything for the Camp fire but…
In 2016 a unanimous bipartisan Bill was submitted to the governor addressing the forest hazards and safety AND THE removal of dead and dry trees near PG&E lines. The governor vetoed this. This was shortly before the devastating Sonoma fire. The lack of accountability being directed at Governor Brown’s office is appalling to me.
As a former PG&E middle-management employee who was downsized in the early 1990's I would place the blame on PG&E's decision in the late 1980's to change their primary mission of customer service and engineering to focus instead on financial results. We were indoctrinated in enhancing 'shareholder value' instead of traditional customer service and, albeit costly, preventative maintenance all of which were then suddenly considered old school. It took a while to destroy a solid company but thirty years later the results of that decision have been devastating and have directly attributed to the explosions and wild fires, mostly due to poor maintenance and callous senior management. What is needed is a new board of directors and a new crop in the senior management ranks. The company has tremendous resources and highly skilled employees who do the actual work. De-monopolization is not the answer, change in executive management is.
Really good points Dirk. I think they lost a high value employee in you. The change in incentives and corporate outlook says it all. We might want to look at the northern European models of delivering electricity and managing liability for more ideas as well. While the old PG&E was the model during the Erin Brockovitch period with the water pollution denials and its arrogance and bullying, there were still good things that got tossed out as well.
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Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
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Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
Anyone violating these rules will be issued a warning. After the warning, comment privileges can be revoked.