They sneered when former South San Joaquin Irrigation District General Manager Jeff Shields said PG&E was unreliable.
They snickered when the SSJID board — that has an “A” bond rating compared to their junk bond status — said they had the wherewithal to reduce retail power costs compared to PG&E 15 percent across the board.
They laughed when the same electric system consultants that they’ve used for years told SSJID that the PG&E distribution system serving Manteca, Ripon, and Escalon was worth $116 million and not the $300 million their spokeswoman with the $695 pair of red-soled Louboutin high heels said to farmers gathered in September of 2009 to support the SSJID’s move to take over the local PG&E system during a meeting conducted in the district’s truck garage.
On Friday the same PG&E that for the past 20 years has done everything possible including lying through the expensive diamond-studded teeth of their top brass to sabotage SSJID’s right to exercise its right under the California constitution to assume control of their wires and related equipment made another pronouncement.
The PG&E CEO du jour, Bill Johnson, told the California Public Utilities Commission that it may take as long as a decade for the utility to improve its system to the point they will no longer need to cut off power for two to five days at a time so their aging, faulty, and under maintained equipment that they received rate increase after rate increase to fix and/or replace over the years but never did doesn’t spark wildfires.
Given PG&E — the abbreviation for Pinocchio Gas & Electric — has a well-documented history of telling whoopers, twisting the truth, killing off costumers, and torching ratepayers’ homes says it will take 10 years to end the Third World status that they have managed to secure by running the nation’s largest electrical system into the ground while squeezing mega-profits out of it, this means the odds we will have 20 or so years of playing lights out with PG&E.
Of course PG&E stock didn’t drop as this isn’t bad news for Wall Street investors. All that work PG&E needs to do strung over 10 to 20 years comes with a 10.5 percent automatic profit return the state guarantees when they do billions of dollars of upgrades means big returns for investors.
That means at least 2 million of PG&E’s 16 million customers are highly likely to have their electricity cut off 10 to 20 times if not more over the next decade while a smaller number— 100,000 or less — losing their on their power perhaps 40 or more times over the next 10 years.
Governor Gavin Newsom believes having the power cut off like that demands PG&E compensate customers for some of their losses at $100 per household and $250 per small business each time it occurs. With 800,000 accounts losing power that translates into $100 million Newsom wants PG&E to fork over in the form of credits or refunds to customers.
The Stanford Woods Institute for the Environment, using the Interruption Cost Estimate Calculator created by Lawrence Berkeley National Lab and Nexant to place a value on power interruption, put the negative impact on California of the last forced power cutoff at a minimum of $2 billion.
That means PG&E will be costing the California economy easily in excess of $40 billion over the next 10 years based on their CEO Friday basically admitting the company has screwed up their system so bad in terms of safety and reliability that it will take at least a decade before they can scale back planned power shut offs.
PG&E — based solely on two bankruptcies in 20 years and being a convicted federal felon in connection with how they operated the natural gas pipeline that triggered the 2010 San Bruno explosion that killed 8 people and desires three dozen homes — under state rules should be declared unfit to be entrusted with essentially a license to provide the public with power. Add to that they now admit we can suffer $40 billion in loses while they keep pushing more rate increases such as the 12.8 percent to generate $1 billion they are now asking the CPUC to grant that comes with $105 million in guaranteed profit, and by the time 2030 rolls around 16 million Californians will be fleeced of $50 billion plus just so PG&E can survive as a company to generate profits for Wall Street.
If Newsom really is outraged and is indeed a governor of the people and not a puppet of the Wall Street profiteers, he might want to consider doing something besides acting indignant about the folks that helped grease his campaign.
The state needs to engineer a hostile takeover of PG&E.
First they need to declare PG&E no longer is a viable company given it can’t borrow money on its own due to its bankruptcy status. They also need to rule PG&E’s moral turpitude makes it unfit to be entrusted with an essential public service such as providing electricity.
Then they need to buy the entire PG&E system by tapping into the state’s $22 billion budget surplus.
After that, they need to sell off the PG&E natural gas system to the highest qualified bidder. The proceeds can be used to eliminate part of the debt for buying PG&E.
As for the electrical system, they need to turn the transmission lines and power plants over to the Northern California Power Authority for $1 with the condition they maintain and operate the assets and charge “customer agencies” the appropriate fees for such expenses.
The retail system should then be split up. While that is happening the state would contract the day-to-day operations of the electric system. Public agencies would be given first shot at either expanding or taking over more territory to serve by paying for PG&E assets at fair market prices. After that, what remains of the system would be put up for bid to private concerns. Proceeds for the sale of assets to public and private entities will go toward paying off the debt the state incurred buying PG&E. Any area that doesn’t get picked up by a public agency or a private concern can become electric co-ops overseen by the state.
That means most of the cost of the state takeover would be covered by subsequent sales. If there is say $10 billion not covered by resales, draw down the deficit by that much. In the end the state will have spent $10 billion to avoid $50 billion in economic losses and a corresponding loss in state and local tax revenue.
Radical? Perhaps. Do-able? Yes.
It eliminates PG&E as a convicted felon profiting off its own neglect as well as the diversion of money from ratepayers that were supposed to be spent on replacing power poles over the years and was spent on “more pressing matters” which we all know by now is PG&E-double speak for fattening their state guaranteed 10.5 percent return.
Going forward power rates will be a minimum of 15 percent less than what PG&E would charge.
Smaller and more local power agencies/firms would be more responsive and attentive to safety issues just as they are at Trinity Public Utility District that has operated for decades in a severe area for wildfire without killing or burning out customers.
Northern California would have power systems in place that answer to the people and businesses they serve instead of Wall Street investors.
And even if it still takes 10 years to completely eliminate all issues that require power shut offs to prevent wildfires, we will end up having lower power rates and a better handle on safety and wildfire prevention going forward.
Rewarding Pinocchio Gas & Electric by allowing them to continue in business is rewarding not just liars and convicted felons but a company by its own admission likely caused the deaths of 93 people and destroyed more than 14,000 homes plus 5,000 other structures.
This column is the opinion of executive 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.