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PG&E + KKR = Future electricity costs will make today’s bills look like a bargain
Do KKR headquarters at 30 Hudson Yards in New York City strike you as the offices of a firm that will work to lower your PG&E bill?

A disciple of Mother Teresa is not the CEO of PG&E.

It’s Patricia “Patti” Pope.

She was brought in to “save” the money machine.

Yes, customers — at least those not among the 91 they killed in Paradise and San Bruno plus the tens of thousands they’ve burned out of house and home — do matter to PG&E.

Captive customers is how they made a record $2.24 billion in profits during 2023, a 24.56 percent increase in profit levels over 2022.

And in case you haven’t noticed between what rate hikes they have been granted so far this year and those pending, PG&E rates will have increased by close to 20 percent by the time 2024 draws to a close.

It is clear PG&E is not following the Catholic Charities model.

They would not exist after going through two full-scale bankruptcies in roughly 20 years if they were not good at their primary mission, which is making Wall Street hedge funds et al boatloads of money.

It is why you should you be very afraid of PG&E’s latest ploy to “better serve” 16 million Californians.

PG&E wants to transfer its vast hydroelectric system as well as natural gas and solar electricity generating facilities and battery storage to a new subsidiary dubbed “Pacific Generation.”

They then want to sell 49.9 percent of the new subsidiary to the world’s largest infrastructure investor known as KKR.

KKR is in business to make money — read that profit — just like PG&E.

The New York-based firm’s net income in 2023 was $3.7 billion or almost 70 percent more than PG&E the same year.

If you think PG&E or KKR are getting in bed to lower your electricity rates, may I interest you in buying the Golden Gate Bridge for $100 and four Pepsi bottle tops?

PG&E is not going to enter a deal that decreases their bottom line.

Nor is KKR going to enter a deal that doesn’t increase their bottom line.

And rest assured KKR isn’t in the hunt for single digit returns on its investments or returns lower than what they could obtain from stocks, bonds, et al than by buying into “Pacific Generation.”

And where is the new profit stream to line the coffers of KKR investors going to come from?

That’s easy. It’s from the pockets of PG&E customers that already enjoy the highest electricity rates in the continental United States.

That’s because PG&E, whose investors expect a profit would be buying electricity from essentially another entity, whose investors also expect a profit.

Let’s not forget PG&E’s checkered history of “spinning” off its power generation power portfolio.

All it takes is a trip back 20 years or so, when PG&E decided getting a 10.5 percent profit on every dollar they collect from customers as guaranteed in rate hikes granted by the California Public Utilities Commission wasn’t enough.

They were jealous of Enron raking in annual profits between 20 and 30 percent annually.

That’s back when they used ratepayer dollars to grease the political machine in Sacramento to allow for-profit utilities to semi-deregulate.

It was sold with two big lies.

The first, it would lower consumer electricity rates.

The second, in order to get the votes of a few holdout legislators, PG&E et al made a commitment to help irrigation agencies like South San Joaquin Irrigation District get started in the retail electricity business.

We know what happened to both of those promises.

The con job those in Sacramento bought into led to PG&E creating a new holding company and essentially selling its generation portfolio to itself.

This allowed them to re-depreciate power generation facilities long paid for from charges to costumers to reduce their tax liability and to give PG&E a new revenue stream by what in retrospect was gambling on the spot energy market.

That not only backfired spectacularly as wholesale energy costs bought on the open market busted through the outer limits of the stratosphere, but it created rolling brown outs and led to PG&E Bankruptcy 1.0.

The current deal supposedly will make it feasible to spend an additional $62 billion between 2024 and 2028 to “harden” infrastructure so PG&E — California’s leading felony corporation that pled guilty to 85 manslaughter counts in the 2018 Paradise Fire — can reduce its wildfire risk.

It’s time someone pointed out the obvious.

The PG&E plan to bury lines covers its rear end not just from a colossal failure to manage wildfire risks along transmission lines, but its even larger failure to replace aging equipment ranging from power poles to transformers in a timely manner.

Like all infrastructure, what PG&E owns has a set life.

And that means it is isn’t replaced it will fail not just in high winds on tinder dry days but also when there are no external threats to the system.

Instead of diverting part of their profits over the years to replace aging infrastructure, PG&E put profits above maintenance.

The $62 billion borrowing plan that supposedly the new subsidiary and partnership with KKR will make possible will come as a cost, a real big cost.

The rate increase that went into effect on the first day of 2024 was a 11 percent increase to generate $13.5 billion.

PG&E still wants five times that amount.

And if the CPUC blesses PG&E’s latest plan, PG&E customers are going to pay for the principal and interest plus keep PG&E and KKR profitable at likely an even higher level for years to come.

Then there is the question about public assets —the waters in California rivers that are dammed and diverted to generate PG&E power and profits.

Does California need a wildcard player that could compromise the safety of dams to drive higher profits and create problems with how water supplies are delivered to much of the state?

It doesn’t matter that PG&E workers will still operate dams et al.

PG&E kept its workforce, at least the part they don’t reduce to increase their bottom line, intact when they were emulating Enron.

It was the decision of the corporate corner office that led to rolling brownouts, created the pressure to delay routine capital expenditures to keep the system in working order to squeeze out more profits, and ultimately led to even higher power rates.

You need to keep in mind the vast majority of rate hikes — just like your power bill before Jan. 1, 2024 — is not tied to the actual electricity consumed, but to operate and maintain the generation and distribution of energy.

Pacific Generation is likely to make it easier for PG&E to increase profits off of the electricity being sold.

The CPUC needs to tell Patti Pope to go fly a kite.

And the California Legislature needs to grow a spine and pull the plug on PG&E.

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at