4 ms·

The article states that there is roughly $15 billion in damages from this fire. PG&E’s assets and wildfire insurance are worth ~$5B. That said, if it were prov

• sjg007 8y ago
  They should be a state owned utility and tech improvements should be made to reduce the fire risk.
  • sovietmudkipz 8y ago
    In general, does the state operate more or less efficiently than the market? More specifically... What is the most efficient state run operation? What is the least efficient state run operation? What is the most efficient market driven operation? What is the least efficient market driven operation? My sense is that in general a market driven operation will be run more efficiently and practically than a state run operation. There may be particular instances of efficient state run operations that exist in the United States but there are always particular instances of efficient market driven operations too. Taken as a whole, we should skew towards market driven solutions.
    • Mbioguy 8y ago
      Utilities are natural monopolies. Not exactly the best fit for a market solution, especially when, as in this case, they are negative externalities borne by the public that the company is trying to avoid paying for.
      • VLM 8y ago
        The company will pay for nothing. Its a powerco not a mint. Their only significant revenue stream is electric bills (pole rental for telco fiber optics, pole rental for cable TV cables, all small amounts of money) What we have here is a decision between one group of accountants getting electricity users to pay, vs a different group of accountants getting taxpayers to pay. The fraction of the population that are net positive taxpayers is much smaller than the fraction of the population that uses electricity, so in a democracy it would be surprising NOT to see the people deciding the few people who are net positive taxpayers will get the bill. The large chunk of the population that pay electric bills while being net negative taxpayers are not going to volunteer to pay more.
      • koboll 8y ago
        A counterpoint might be that binding private enterprise by strict liability rules might coerce it to be extra cautious not to cut corners that lead to fires -- as opposed to a state owned company which might have less to fear from lax practices. Although, it's debatable how avoidable starting fires is in the bone-dry tinderbox of 21st-century California, even if you stick closely to best practices.
        • sjg007 8y ago
          What you describe is exactly what PG&E is today. Those strict liability rules did not prevent them from cutting corners. They estimate damages at 15B and their insurance and assets are worth $5B. So do the math.... taxpayers will have to pay for rebuilding and if PG&E survives will they pass costs on to rate payers (aka the same people whose houses burnt down) or will they tax PG&E more or ?. Maybe PG&E will become insurance company owned since they will owe the insurers tons of money since they can't pay out for liability.
    • 0xcde4c3db 8y ago
      I don't think that framing of the issue is very useful on its own. Public and private entities both participate in the market, and the question of which entities are most efficient depends on which definition of efficiency one deems most relevant (i.e. which inputs and outputs one chooses to measure, and by which methods). Also, people often attribute exclusively to government a class of dysfunctions or inefficiencies that have virtually nothing to do with an organization's ownership structure, but have a great deal to do with management structures typical of large organizations (e.g. wasteful spending due to "use it or lose it" budgets). With respect to these problems, I would be very surprised if substituting public vs. private does anything other than change minor details of how they manifest.
      • gowld 8y ago
        "market" does not mean "private". "market" means "competitive, instead of monopoly". They are orthogonal. You can have competing governments, and you can have private monopolies.
    • sjg007 8y ago
      You mean the monopoly utility in Northern California called PG&E?
• _pmf_ 8y ago
  > That said, if it were proven that PG&E were directly liable for this fire, how would that play out? As it always plays out: regular people will only sue via class action lawsuit, meaning there will be a settlement that is a fraction of the damage. The lawsuit with the state as plaintiff will drag on until either a settlement or the statute of limitation is reached.
  • sjroot 8y ago
    That’s the answer I expected but didn’t want to see.
  • dragonwriter 8y ago
    > As it always plays out: regular people will only sue via class action lawsuit, meaning there will be a settlement that is a fraction of the damage. Businesses and individuals (and public agencies like cities, counties, and special districts) with losses, especially of structures, will in many cases be insured; direct action lawsuits, or the threat thereof, to force a substantially full settlement, to recover from liable parties are a big part of what insurance companies do, and the nature of insurance companies is that each will have much larger losses than any individual, and much more motivation to aggressively pursue them; there may still be settlements that are less than would be recovered in a final judgement (to the extent that time value of money and risk and reduced litigation costs make that a winning proposition), but nowhere near as small a fraction as is typical in a class action. > The lawsuit with the state as plaintiff will drag on until either a settlement or the statute of limitation is reached. That's not how statutes of limitations work. They run from the event giving rise to the cause of action to the moment the action is filed; once the case is filed within the statute of limitations, how long it runs is immaterial.
    • gowld 8y ago
      That's only true in some cases. In the recent Tesla occupational-safety case, the statute of limitations ran from time of the incident until time of resolution, so stalling did cancel the government intervention.
• mrleiter 8y ago
  Chapter 7 (liquidation) or Chapter 11 (restructuring) of Title 11 U.S.C. are possible options.
  • koboll 8y ago
    This exactly is what's likely to happen. Note also: PG&E is already being sued for allegedly causing last fall's devastating fires in northern California. That plus damages for this year's fires is very likely to force them into bankruptcy. Hence a plunging stock price as everyone rushes to get out while they still can.
• tyu1000 8y ago
  Articles on Bloomberg about this already on who pays if they are found liable for huge amounts of damages, ratepayers, shareholders, taxpayers or bondholders. Likely to be a combination of all four in some amount, if the worse comes to happen.
  • thanosnose 8y ago
    Most likely the shareholders will be wiped out ( equity collapse ) and bondholders are going to cut their losses and simply walk away. It will be rate payers ( customers ) and taxpayers ( both state and federal ) who will be footing the bill. But that's the worst case scenario which I don't think is likely.
• sailfast 8y ago
  Even if they go into bankruptcy (Chapter 11, say) they are legally allowed to recoup the costs of this as part of being a regulated utility, so I would expect higher utility rates to customers as a start for the next few years in order to either pay for the liability insurance or (less likely) to bring their infrastructure to a court-arguable higher standard so as to avoid accusations of liability in the future. That said, as a private citizen I don't see how a person starting a fire accidentally (not sure how you prove malice if a transformer fails?) could be held liable for all the property damage further downstream. That's what private insurance is for.
  • sgc 8y ago
    Negligence.
• rasz 8y ago
  Dont worry, no one will go to jail if thats what you were thinking of.