Slicing Up the PG&E Pie

The city of San Francisco is ready to offer PG&E $2.5 billion to buy the utility's lines within the city.  Let's just leave aside the question of whether a city that can't keep its streets clean, stop 30,000 car burglaries per year, build a subway line or Van Ness Avenue remotely on time, or run a bus system properly should be in the electricity business.  Those are great questions, but here we ask "What about Burlingame?"  The Wall Street Journal posits a bad answer to that question:

The removal of San Francisco from PG&E’s 70,000-square-mile service territory would likely affect rates and service for those in rural and suburban areas outside of the city by reducing the number of customers paying for the operation and maintenance of the grid.

Michael Wara, head of the climate- and energy-policy program at Stanford University’s Woods Institute, said it is incumbent upon California to examine how San Francisco’s takeover bid would affect those customers.  “In order for this to happen, the state of California would have to be amenable,” he said. “There is reason to suspect it might have some negative consequences for the people left behind.”

We've already got cost and reliability issues with the electricity we are getting and the wildfire liability that PG&E faces certainly isn't going to make the cost issues any better.  Let's just hope our neighbor to the north doesn't stick it to us even more by taking a bigger slice of the pie.

Comments

[Joe]

Here is the natural response to the liability of wildfires:

Due to significantly windy weather conditions and high fire risk, PG&E has announced a possible Public Safety Power Shutoff (PSPS) incident that is expected to affect up to 29 California counties, including San Mateo County. Initial estimates for San Mateo County indicate impacts to customers:

•Coast-North Moss Beach/El Granada; Half Moon Bay to Santa Cruz border including Pescadero;

•Foothills region mostly west of state route 280 including Portola Valley, Woodside and the surrounding unincorporated area

Per PG&E, should it be required the power shutoff is anticipated to begin sometime on Wednesday Oct.9 (a.m.) and continue through Thursday morning, possibly longer with residents potentially without power for up to five days.

[[email protected]]

This is what happens when Monopolies control basic services for life and livelihood.
We have to do whatever they want. Or we will have to live with their "punishment."
Same with ALL Cable, and Internet service's.

[Joe]

Holly, unfortunately you drew the exact wrong conclusion from the article. The electric, gas and cable systems are natural monopolies for efficiency and to keep costs of the physical plant somewhat in check. (Internet service is different as it rides on top of cable or phone). Their profits are regulated based on the investment in plant.

The regulators should have been riding PG&E harder on maintaining a fire safe space around transmission facilities and maintaining pipes but they were too wrapped up in getting them to add expensive green energy sources. Then the lawyers and politicians jump in to pick the bones of the dying utility and we all end up paying in money and reliable service.

[[email protected]]

If the only way for PG&E to avoid liability for Fires caused by their lack of "maintenance" is turning off the power to people who live by electricity, that sounds like "punishment" to me.
I do agree with you.

[Joe]

Here are a few excerpts from the Friday editorial in the WSJ about the PG&E -Newsom -PUC - Legislature mess:

The state Public Utilities Commission is in charge of enforcing state safety laws and regulations, which can carry penalties of up to $50,000 per violation per day. Yet PG&E received no safety fines related to its power-grid management over the last several years. The commission has instead focused on enforcing the Legislature’s climate mandates.

Utilities must spend hundreds of millions of dollars each year to reduce the cost of green energy for low-income households. In 2018 PG&E spent $509 million on electric discounts for low-income customers in addition to $125 million for no-cost weatherization and efficiency upgrades for disadvantaged communities.

Last year PG&E invested more than $150 million in battery storage and “sustainable” technologies, which was paid for by a special charge on ratepayers. PG&E is also spending $130 million over three years to install 7,500 electric-car charging stations and offers drivers a $800 “clean fuel” rebate.

All of this has been part of a Democratic political strategy to use PG&E to advance their climate agenda without raising taxes. But Californians have instead paid through higher electric rates—PG&E rates are twice as high as in Oregon and Washington—while utilities have had to redirect capital and ratepayer revenue away from fortifying the grid and tree-trimming.

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Seems pretty clear what is happening - do as they are told on everything else and grid maintenance sinks to the bottom of the list.

[Laura]

Joe, funny, Gavin doesn't mention any of the above while he is bashing (his words) the greedy PG&E executives every time he gets a microphone in front of him.