Does California need to help PG&E stay afloat?
PG&E is universally, if quietly, seen as too big to fail. It’s too important and vital. It provides natural gas and electricity for 16 million people — 40 percent of the state.
But the utility’s laxly maintained equipment has caused many devastating wildfires. So facing what it estimates to be $30 billion in potential liabilities for fire losses, PG&E’s filed for bankruptcy.
The utility recently asked the bankruptcy judge for permission to spend $130 million on employee bonuses and other perks. Meanwhile, burned out victims of the Camp Fire are struggling to find shelter.
The state certainly doesn’t want to take over PG&E and go into the business of supplying gas and electricity.
Says Assemblyman Chris Holden, D-Pasadena, chairman of the Utilities and Energy Committee, “The state, in taking over PG&E, would have to buy all the infrastructure. The costs would be pretty significant. And the fire risk would still be there. It would be just changing jerseys. Instead of the liability falling on the utility, it would fall on taxpayers.”
So whatever it’s called — a bailout, corporate welfare or just common sense — Gov. Gavin Newsom and the Legislature need to help the utility stay afloat after it goes through its second bankruptcy in two decades.
“I’ve been through this dance before,” says Sen. Bob Hertzberg, D-Van Nuys. He was Assembly speaker when PG&E filed for bankruptcy in 2001 during a horrendous energy crisis, caused by out-of-state power pirates capitalizing on a During an emergency meeting Jan. 28, state regulators voted unanimously to allow PG&E to readily borrow billions during any bankruptcy proceedings, despite being confronted by protesters who screamed obscenities at times. disastrous energy deregulation rates to help cover 2017 wildfire scheme passed unanimously by liabilities, but not 2018’s. It the Legislature. may do that this year. And it
“I learned you’ve got to have greatly increased the state’s fire a financial system for all utilities prevention efforts. that works,” Hertzberg says. Assemblyman Jim Frazier, “That [1996] deal didn’t work. D-Oakley, introduced a bill requiring It caused the utilities to go upside utilities to remove their down.” equipment and transmission
“Nobody wants to bail out lines from fire-prone woodlands, PG&E,” Hertzberg adds. “Everyone bury it or fireproof it. wants to talk about how But experts say burying transmission bad PG&E is, but it’s only the lines is very expensive tip of the iceberg.” and not always practical.
Climate change with its volatile Sen. Bill Dodd, D-Napa, whose shifts in weather is creating Wine Country district was bigger, deadlier wildfires, charred in 2017, introduced one experts say. The consensus in bill to create a state wildfire the Capitol is that wildfires can warning center and another to only be minimized, not stopped. strengthen enforcement of required
The five-member Commission vegetation-free buffers on Catastrophic Wildfire around vulnerable homes. Cost and Recovery has a July 1 The most probable outcome deadline to recommend solutions. is requiring much better PG&E Newsom has told them he maintenance and independent wants their suggestions sooner. inspections.
The governor and legislators express But no politically unpopular similar goals: ensure that bailout. there’s safe, reliable and affordable However, the state needs to energy service; that fire help PG&E survive somehow. victims get fair settlements; And the utility needs to reorganize. and that the state continues to It can start by chucking make progress on switching to those crazy bonuses. 100 percent clean electricity by 2045.
Last year, the Legislature passed a measure allowing utilities to raise customers’ electricity