Do not cry for Pacific Gas & Electric.
Administrative Law Judge Maribeth Bushey of the California Public Utilities Commission tentatively ruled Friday that PG&E ratepayers would have to pick up only 55 percent of the $2.2 billion tab to pressure test and upgrade the natural gas system that serves Northern California.
PG&E had wanted to stick ratepayers with 84 percent of the cost.
And it should be noted that PG&E has already conceded that their original cost estimate of $2.2 billion is as shoddy as some for their safety record keeping. The for-profit San Francisco based utility is now saying the ultimate cost could soar as high as $5 billion.
PG&E, of course, isn’t a happy camper. The firm’s Senior Vice President Tom Bortoff called the tentative ruling “wholly inadequate”. That’s “wholly inadequate” as in PG&E’s safety measures in San Bruno where they killed eight people and leveled an entire neighborhood were “wholly inadequate.”
Should the full CPUC headed by the former head of Southern California Edison - PG&E’s kissing cousin in the Golden State world of for-profit power companies stand - then the annual return PG&E will be able to receive over a five-year period is 6.05 percent annually as opposed to the 11.35 percent they are now guaranteed as a protected monopoly in California.
That’s still a 6.05 percent profit. How much return are you getting from your savings account or other investments? PG&E thinks they should have their guaranteed 11.35 percent profit margin regardless.
Of course, they don’t think their small stockholders should get as much as executives do. They deserve bonuses, you know, for driving a protected monopoly to the edge of bankruptcy and for blowing up neighborhoods. It’s hard work.
Ratepayers should pick up something.
But PG&E needs to take the bigger hit as it is abundantly clear the utility has cut corners over the years by not doing an adequate job of staying on top of ongoing pipeline issues. And they have done it not just at the expense of ratepayers but rank and file PG&E workers as well. Everything has been squeezed so PG&E can maintain an 11.35 percent return or profit.
They have ignored employee warnings about safety and not spent the resources needed because they obviously did not want to settle for - let’s say - a paltry 5 percent profit. PG&E made profit maximization a priority over safety. The new PG&E can say all they want but the old PG&E before the company’s aggressive mea culpa public relations campaign was more about profit than safety. San Bruno is Exhibit A.
Besides, PG&E has had no qualms squeezing thousands upon thousands of small businesses and farmers who would have been happy to achieve a 5 percent return during the Great Recession with ever increasing energy bills despite PG&E’s holding company having one of the biggest hydroelectric portfolios in the country.
PG&E should be happy with the proposed ruling.
They are some who believe PG&E has so violated the public trust in such a systematic manner over the years that the CPUC should take a bold move and force the sale of the entire protected monopoly’s natural gas and electricity holdings.
In the coming months we’re going to find out whether the CPUC is indeed a thoroughbred industry lapdog and should be the target of a grassroots Proposition 13 voter uprising or if it can act like it might actually be looking out for consumers and not just protecting utility profits.
Any downward deviation of what PG&E is tentatively being required to pay by the full CPUC board should be interpreted for what it is - a bid by cronies to help their buddies in the industry.
This column is the opinion of managing editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209-249-3519.