PG&E: Regulator responds to coop proponents
California’s top utility regulator told a group of mayors and county supervisors that a major restructuring of Pacific Gas and Electric Co. could be beneficial, and she believes the company’s safety record is “unequivocally unacceptable.”
But Marybel Batjer, the president of the California Public Utilities Commission, did not immediately embrace a request from the government leaders to consider turning PG&E into a customerowned cooperative — at least not in the way they had sought.
She didn’t totally rule the option out, either. Though she did not directly discuss the coop idea, she said she and Gov. Gavin Newsom are “open to bold solutions which will provide safe and reliable service to the people of California.” She also said she is “resolutely focused on finding a financial and operational model that prioritizes and ensures public safety.”
The commission is reviewing ways the company might be reorganized as it seeks to exit bankruptcy protection. Batjer suggested in a Thursday letter to mayors and supervisors that the coop they have proposed might be better evaluated in a different commission proceeding.
Long before Batjer joined the commission, regulators expanded a review of PG&E’s corporate culture to include questions about whether the company’s structure should be upended. In April, the commission held a public forum that covered “alternatives to shareholder ownership,” Batjer noted in her letter.
The forum predated her appointment, but Batjer said she understood that “the discussion addressed concepts such as mutual benefit corporations and similar models.”
“There are many benefits from such models that warrant further consideration,” she wrote.
Batjer’s comments came in response to a letter this month from more than 20 mayors and several supervisors, led by San Jose Mayor Sam Liccardo, who urged the commission to consider making PG&E a coop. The commission has to sign off on PG&E’s plan to exit bankruptcy and has already started that review, which is where Liccardo’s group wanted their idea considered.
Currently, the commission is limiting its review to the bankruptcy case, where two groups are pursuing competing plans to reorganize the company. Those plans — one backed by the company and the other pushed by a coalition of fire victims and bondholders — outline different ways for PG&E to resolve its liabilities, and the two sides are in courtordered mediation.
Liccardo said he and others backing the coop idea may “find our way into Bankruptcy Court,” indicating they could formally present the idea in a legal proceeding. He was upbeat about Batjer’s response.
“I didn’t take anything negative from the letter,” he said. “There’s nothing in the language of it that suggests she’s foreclosing any option.”
Liccardo has been championing the notion of turning PG&E into a coop since last month. If successful, the plan would reshape PG&E into a memberowned nonprofit similar to a credit union — a separate vision from a fullblown state takeover or San Francisco’s proposal to buy the company’s local power lines.
Liccardo said he still expects “a very robust conversation about the merits” of the coop idea “and other competing proposals.” The rival bankruptcy reorganization plans face “significant obstacles,” he said, casting doubt on their financial validity.
“We’re quite happy to wait until the merits and the very serious defects of the existing plans come to light,” Liccardo said. “We will be ready.”
In her letter, Batjer had plenty of harsh words for PG&E.
“After less than three months at the Commission, I have observed PG&E’s safety performance, and currently believe it is unequivocally unacceptable,” she wrote. “I grant that PG&E faces historically challenging and dynamic climate change conditions, but the company has failed to successfully execute even basic operations during times of crisis.”
Batjer cited the website crashes and “communication breakdowns” while PG&E implemented widespread blackouts. She said the utility’s “inability to execute and implement the simple stuff is deeply troubling.”
“California must have a future that is fundamentally different than what it experienced in 2019,” she wrote, saying the examination of PG&E’s leadership and culture “will help achieve that goal.” The commission has already ordered PG&E to show why it should not be sanctioned for its mistakes during last month’s blackouts.
PG&E has resisted both the coop idea and San Francisco’s offer to buy its power lines. The company said in an email Friday that its focus is on “fairly and reasonably resolving” the claims of wildfire victims while “reducing the risk of wildfire to our customers and communities and reducing the size, scope and impacts” of future blackouts.