Now Amid Bankruptcy, Should PG&E Transition From Private Company To Public Utility?

Jan 30, 2019

Credit PG&E

Now, reaction to PG&E's bankruptcy filing yesterday (Tuesday) from a state lawmaker who represents much of the Northern California area devastated by wildfires in 2017.  Democratic Senator Bill Dodd also authored last year's wildfire liability law that sought to stabilize PG&E's finances and avoid bankruptcy.  He originally favored a change in liability law backed by PG&E and former Governor Jerry Brown.  That proposal would have absolved the utility of liability for wildfires started by its electrical equipment - as long as it acted responsibly.  Dodd spoke with Capital Public Radio's Ben Adler.

ARTICLE BY Ben Adler & Nadine Sebai, Capital Public Radio:

California lawmakers and Gov. Gavin Newsom say they’ll work to ensure the state’s electric service is safe, reliable and affordable while PG&E navigates through bankruptcy.

The investor-owned utility formally filed for Chapter 11 protection early Tuesday morning.

“That was PG&E’s choice,” Newsom said in a statement on Tuesday, which was his only public comment on the matter, “but it does not change my focus, which remains protecting the best interests of the people of California.”

The governor added that his administration also wants to ensure “that victims and employees are treated fairly, and that California continues to make forward progress on our climate change goals.”

Democratic state Sen. Bill Dodd, who represents much of the Northern California area devastated by wildfires in 2017, said PG&E needs new leadership that prioritizes “a culture of safety.” CEO Geisha Williams stepped down earlier this month just hours before the utility served notice of its plan to file for bankruptcy.

“I just know in my heart of hearts that we need to have a change in management, which we’ve had some, and we need to have a change in the boardroom,” Dodd said.

“The idea that there are still five or six directors of PG&E — who are paid handsomely, by the way — that were directors when the gas pipeline explosion happened in San Bruno” in 2010 “is unconscionable,” he added.

Dodd authored last year’s wildfire liability law that sought to stabilize PG&E’s finances and avoid bankruptcy.

“A lot of people called that a bailout of PG&E, when what we were attempting to do was make victims whole to the best possible that we could, and also to protect ratepayers over the long run,” the senator said. And yet, he added, “bankruptcy is the ultimate PG&E bailout.”

The California Independent System Operator, which runs much of the state’s power grid, said Tuesday that PG&E’s bankruptcy has thus far caused no disruption to operations or energy markets.

As bankruptcy proceedings continue for the country's largest power utility, many Californians are wondering if the publicly traded company could become a public utility.

Dr. Catherine Brinkley, assistant professor at UC Davis, says transitioning into a public utility would likely not leave people in the dark.

“We have a lot of these cases where municipal energy districts are formed and there are electrons still being pushed through the wire,” Brinkley said. “It's not as if production is shut off. It's more that policies have changed so it can be done very smoothly.”

California already has a number of large, publicly owned utilities including the Sacramento Municipal Utility District and the Los Angeles Department of Water and Power.

Brinkley said it’s up to the Newsom administration to decide whether California will take on the responsibility, but it will be “hard to imagine” the state deciding to allow PG&E to continue to provide a service.

Dodd, however, warned that a public takeover of the utility would leave taxpayers on the hook “for the entire PG&E electrical grid, which we already know is substandard and unsafe.”

“I’m just not there to do that, to make that change, and to shift the risk to the taxpayers at this point in time,” he said.

The utility filed for bankruptcy once before in 2001.