8 ms·

PG&E falsified gas pipeline records for years after deadly explosion

142 points by WalterGR 8y ago

TwoBit 8y ago
Why would any company with a monopoly make any effort to improve itself? Fines have zero effect, as they are just passed onto captured customers.
- Scoundreller 8y ago
  The repair/upgrade costs are passed onto customers too...
  - whatshisface 8y ago
    Internal politics at those kinds of organizations can rapidly turn the chain of reporting into a finely tuned irrationality factory. Over time, "minor sins" like making bad events seem as minor as possible and avoiding critique of your political allies will become organizational muscle memory. The people responsible will practice these distortions of reality over and over as they encounter and dispel smaller challenges that arise over the normal course of doing business. When something big happens, it becomes immaterial whether or not a great solution exists, because evaluating solutions and weighing them against the interests of the company is not even remotely near the day-to-day behaviors of the staff.
- im3w1l 8y ago
  Because people care about doing a good job. Because they want to be popular in the community. Because the employees are afraid the law will go after them personally.
  - Gibbon1 8y ago
    I feel like our society discounts these first two motivations in favor of money and punishment. And those are a very poor substitute a lot of the time.
    - WalterGR 8y ago
      What do you mean? Could you expand on that?
      - nicoburns 8y ago
        A good CEO of a company is considered to be one that provides the best return on investment for the companies shareholders (this is often defended as a morally upstanding attitude, especially in a US context). If someone is a CEO, and they care about society and about doing a good job, this will almost always mean passing up opportunities to maximise company profits. For example, in this case a diligent CEO would ensure that the company is paying for the maintenance of its equipment. However, this isn't necessary to maintain revenue given the monopoly position that the company is in. And thus a company board looking to maximise its return on investment may choose to replace this CEO with someone who will prioritise profit over things like societal good and doing a good job. It is these shareholders that our legal/economic system gives power to. And a majority of shareholders are amoral entities like pension funds who are not concerned with ethics, but are simply looking to maximise profit. Thus our society also takes on these values.
  - phren0logy 8y ago
    People want to do a good job. Including the executives, who usually are pretty removed from the day-to-day operations. To some of them, squeezing every last nickel out of the business is “doing a good job.”
- brohoolio 8y ago
  If the state is doing a good job with oversight there should be a framework to punish bad behavior beyond fines.
- gammateam 8y ago
  intrastate level antitrust is as toothless, fragmented and unsettled as you might imagine
- anigbrowl 8y ago
  Because managers want to stay out of prison? But I see your point. The problem with infrastructure is that if you're dissatisfied with one supplier you can't just switch to another. And even if I had another provider or lived off the grid that doesn't help me if I'm downwind from a utility-caused fire.
- rayiner 8y ago
  PG&E is regulated by the California Public Utilities Commission, which can and does tell the company what to do, what prices to charge, etc.
mistrial9 8y ago
two more links: https://www.reuters.com/article/us-cpuc-pg-e-us/california-regulator-opens-case-against-pge-for-falsifying-pipeline-safety-records-idUSKBN1OE01S https://www.reuters.com/article/us-cpuc-pg-e-us/california-r... https://www.opb.org/news/article/npr-pge-falsified-gas-pipeline-safety-records-regulators-say/ https://www.opb.org/news/article/npr-pge-falsified-gas-pipel...
hemantv 8y ago
Unless people are made individually responsible for their actions. The fines are easy way when you get caught.
luckydata 8y ago
PG&E is one of the greatest threats to safety and health of Californians. The state government should do something soon about them, ideally, take them over and turn them into a non-profit. We already bail them out anytime they have a problem, but their incentives are completely out of whack with the public interest.
- chris_va 8y ago
  No offense, but what makes you think this would be any different if it was a zero-profit government monopoly instead of an "allowed rate of return" government monopoly? And, to be honest, any cause less than ~1000 deaths per year (and PGE is about ~20) would barely even register as a blip on the top 50 causes of death in the state. It's a tragedy, but it's hardly the greatest threat to safety and health.
  - wyattpeak 8y ago
    Since the shortcuts appear to all be about cost minimisation, there would seem to be every reason to think that a zero-profit government monopoly would have handled things differently.
    - jjeaff 8y ago
      How much more money should we be willing to spend to save those 20 lives a year? A million per person, a billion? A trillion? How many lives could we save if we put that money elsewhere?
      - wyattpeak 8y ago
        You're moving the goalposts. You asked "what makes you think this would be any different". That's what makes me think it would be different. The question of cost isn't at issue.
      - rz2k 8y ago
        Probably somewhere between 60 and 200 million for the yearly lives lost. More than would mean the money is better spent on safety elsewhere such as better safety features on highways. Less than that, and spending on safety elsewhere becomes wasteful compared to spending on power infrastructure safety. The "value of a statistical life" has less to do with making thing whole in terms of not caring about deaths than it has to do with efficiently allocating safety spending. Then you have percentage of the yearly wildfires attributable to PG&E. So some percentage of let's say a couple billion in fire fighting per year, and maybe 10-50 billion in property lost. Anyway, the point is that it isn't a slippery slope discussion, and it isn't impossible to come up with an approximate number.
confounded 8y ago
As a foreigner who moved to California a few years ago, I’ve always been puzzled by the existence of PG&E. Why aren’t the infrastructure parts taken over by the state (or managed by an accountable non-profit body), and competition encouraged for the customer facing parts? Or maybe just do that via the state too, if there’s little commercial interest?
- godzillabrennus 8y ago
  In America we tend to put emphasis on allowing a free market to thrive with as little state involvement as feasible. It stems from the ideology that the free market picks winners and losers better than a government. Americans often look at our own Government as having a reputation for being much worse than a big company. We tend to ascribe many of the same negative characteristics such as being slow, wasteful, and lacking accountability. Therefore Americans tend to prefer that private companies are allowed operate a business for profit will produce a more desirable product/service for the market. When they fail a correction in the market should occur and the business should fail. A competitor should be allowed to fill the void.
  - tokyodude 8y ago
    agreed that's what Americans tend to believe. Heck I mostly believe it. Of course the problem is they grant those businesses monopolies so then there is no competition
  - matis140 8y ago
    PG&E is much worse than a private company. It is the weird result of heavy government regulation on the wrong most ant-competitive ways + lots of lobbying. PG&E is not subject to any free markets. Cali for example has 3 of these companies each serving certain regions. When there was completion in the power market you had multiple companies inside cities all providing different kinds of service (AC, DC, varying volts/amps) in crazy ways that would result in most of our modern electronics getting baked. The standards were good. It is however also difficult to have free market power when your cities heavily regulate who can put up utility lines and where so poles don't get too ugly or loaded. There are a lit of reasons what we have is worse than private or completely public.
bluejekyll 8y ago
How is this not fraud? Fraud is a crime. If someone knowingly falsifies documents, does that void the protection given by the corporations offer of limited liability?
- mindslight 8y ago
  Corporate liability protection is what you run into when you go up the management chain. When you go down the management chain, you end up at the "fall guy". The person who signed the falsified reports is likely in the second-lowest level of employees (the lowest level of management), who was ordered by the guy above him, who was pressured by the guy above him, who was incentivized by the guy above him, who was winked at by the guy above him, who concocted the scheme to please the guy above him, etc. Nobody really wants to see some low level employee's life ruined and his kids starve simply for being the dummy who accepted a promotion to sign the reports.
  - bluejekyll 8y ago
    Yes, I agree, then it should fall on the CEO, who is responsible for signing off on all of this activity, like financials. You’re right that we don’t want the guys in the trucks getting busted for fraud, but that shouldn’t mean that we allow the upper management to get off.
    - int_19h 8y ago
      > You’re right that we don’t want the guys in the trucks getting busted for fraud If they knowingly participated in it, why not? In the military, where subordination is far stricter, there's still the concept of unlawful orders, and subordinates are expected to refuse to carry out such orders - and if they do not, they can be held accountable for that.
      - anticensor 8y ago
        Some militaries explicitly lack the concept of unlawful orders and surprise surprise - they are the least successful ones. Same thing also applies to businesses. If you do not have a complaint procedure, you acknowledge you are incompetent.
jaytaylor 8y ago
At what point does this kind of behavior warrant a replacement of 100% of the executive staff? How can we make such a mechanism a reality to incentavise and encourage better behavior? Utilities are too damn important for the bottom line of humanity to allow things to continue playing out in the same sad, pathetic, greedy fashion. The point of having public utilities is to enable a high standard standard of living so hopefully the really important problems can be solved before it's too late. PG&E seems to think the primary goal is for the utility company to be politically powerful and make cush millions for the execs. Sickening.
- nameisu 8y ago
  after 200% bonuses
- WalterGR 8y ago
  Utilities are too damn important for the bottom line of humanity to allow things to continue playing out in the same sad, pathetic, greedy fashion. Well said. As time goes on, I feel more and more like my intended purpose is just to be grist for the mill of American capitalism.
- cft 8y ago
  The CEO is a recent diversity hire. It makes a difficult dilemma for the establishment.
  - tdb7893 8y ago
    I don't understand what the dilemma is here. Also I'm a little unsure of who the establishment is here, do you mean shareholders or something?
    - alexanderwept 8y ago
      The dilemma is that progressives insist that you can increase diversity (e.g more queers/colored people/self-proclaimed victims) without making compromises on competency. To blame the CEO's incompetency could give rational people some evidence with which to question the merit of diversity hires.
foobar1962 8y ago
> At what point does this kind of behavior warrant inprisonment of 100% of the executive staff? Fixed that for you.
- deleted 8y ago
  [deleted]
- WalterGR 8y ago
  It’s iMprisonment. I’m going to delete this comment... No need to reply.
mrhappyunhappy 8y ago
The same PG&E responsible for drinking water contamination with hexavalent chromium? Interesting. At some point monopolies and mismanaged companies should probably be dissolved and negligent management directly responsible imprisoned.

142 points by WalterGR 8y ago

Why would any company with a monopoly make any effort to improve itself? Fines have zero effect, as they are just passed onto captured customers.

Scoundreller 8y ago
The repair/upgrade costs are passed onto customers too...
- whatshisface 8y ago
  Internal politics at those kinds of organizations can rapidly turn the chain of reporting into a finely tuned irrationality factory. Over time, "minor sins" like making bad events seem as minor as possible and avoiding critique of your political allies will become organizational muscle memory. The people responsible will practice these distortions of reality over and over as they encounter and dispel smaller challenges that arise over the normal course of doing business. When something big happens, it becomes immaterial whether or not a great solution exists, because evaluating solutions and weighing them against the interests of the company is not even remotely near the day-to-day behaviors of the staff.
im3w1l 8y ago
Because people care about doing a good job. Because they want to be popular in the community. Because the employees are afraid the law will go after them personally.
- Gibbon1 8y ago
  I feel like our society discounts these first two motivations in favor of money and punishment. And those are a very poor substitute a lot of the time.
  - WalterGR 8y ago
    What do you mean? Could you expand on that?
    - nicoburns 8y ago
      A good CEO of a company is considered to be one that provides the best return on investment for the companies shareholders (this is often defended as a morally upstanding attitude, especially in a US context). If someone is a CEO, and they care about society and about doing a good job, this will almost always mean passing up opportunities to maximise company profits. For example, in this case a diligent CEO would ensure that the company is paying for the maintenance of its equipment. However, this isn't necessary to maintain revenue given the monopoly position that the company is in. And thus a company board looking to maximise its return on investment may choose to replace this CEO with someone who will prioritise profit over things like societal good and doing a good job. It is these shareholders that our legal/economic system gives power to. And a majority of shareholders are amoral entities like pension funds who are not concerned with ethics, but are simply looking to maximise profit. Thus our society also takes on these values.
- phren0logy 8y ago
  People want to do a good job. Including the executives, who usually are pretty removed from the day-to-day operations. To some of them, squeezing every last nickel out of the business is “doing a good job.”
brohoolio 8y ago
If the state is doing a good job with oversight there should be a framework to punish bad behavior beyond fines.
gammateam 8y ago
intrastate level antitrust is as toothless, fragmented and unsettled as you might imagine
anigbrowl 8y ago
Because managers want to stay out of prison? But I see your point. The problem with infrastructure is that if you're dissatisfied with one supplier you can't just switch to another. And even if I had another provider or lived off the grid that doesn't help me if I'm downwind from a utility-caused fire.
rayiner 8y ago
PG&E is regulated by the California Public Utilities Commission, which can and does tell the company what to do, what prices to charge, etc.

mistrial9 8y ago

two more links: https://www.reuters.com/article/us-cpuc-pg-e-us/california-regulator-opens-case-against-pge-for-falsifying-pipeline-safety-records-idUSKBN1OE01S https://www.reuters.com/article/us-cpuc-pg-e-us/california-r... https://www.opb.org/news/article/npr-pge-falsified-gas-pipeline-safety-records-regulators-say/ https://www.opb.org/news/article/npr-pge-falsified-gas-pipel...

hemantv 8y ago

Unless people are made individually responsible for their actions. The fines are easy way when you get caught.

luckydata 8y ago

PG&E is one of the greatest threats to safety and health of Californians. The state government should do something soon about them, ideally, take them over and turn them into a non-profit. We already bail them out anytime they have a problem, but their incentives are completely out of whack with the public interest.

chris_va 8y ago
No offense, but what makes you think this would be any different if it was a zero-profit government monopoly instead of an "allowed rate of return" government monopoly? And, to be honest, any cause less than ~1000 deaths per year (and PGE is about ~20) would barely even register as a blip on the top 50 causes of death in the state. It's a tragedy, but it's hardly the greatest threat to safety and health.
- wyattpeak 8y ago
  Since the shortcuts appear to all be about cost minimisation, there would seem to be every reason to think that a zero-profit government monopoly would have handled things differently.
  - jjeaff 8y ago
    How much more money should we be willing to spend to save those 20 lives a year? A million per person, a billion? A trillion? How many lives could we save if we put that money elsewhere?
    - wyattpeak 8y ago
      You're moving the goalposts. You asked "what makes you think this would be any different". That's what makes me think it would be different. The question of cost isn't at issue.
    - rz2k 8y ago
      Probably somewhere between 60 and 200 million for the yearly lives lost. More than would mean the money is better spent on safety elsewhere such as better safety features on highways. Less than that, and spending on safety elsewhere becomes wasteful compared to spending on power infrastructure safety. The "value of a statistical life" has less to do with making thing whole in terms of not caring about deaths than it has to do with efficiently allocating safety spending. Then you have percentage of the yearly wildfires attributable to PG&E. So some percentage of let's say a couple billion in fire fighting per year, and maybe 10-50 billion in property lost. Anyway, the point is that it isn't a slippery slope discussion, and it isn't impossible to come up with an approximate number.

confounded 8y ago

As a foreigner who moved to California a few years ago, I’ve always been puzzled by the existence of PG&E. Why aren’t the infrastructure parts taken over by the state (or managed by an accountable non-profit body), and competition encouraged for the customer facing parts? Or maybe just do that via the state too, if there’s little commercial interest?

godzillabrennus 8y ago
In America we tend to put emphasis on allowing a free market to thrive with as little state involvement as feasible. It stems from the ideology that the free market picks winners and losers better than a government. Americans often look at our own Government as having a reputation for being much worse than a big company. We tend to ascribe many of the same negative characteristics such as being slow, wasteful, and lacking accountability. Therefore Americans tend to prefer that private companies are allowed operate a business for profit will produce a more desirable product/service for the market. When they fail a correction in the market should occur and the business should fail. A competitor should be allowed to fill the void.
- tokyodude 8y ago
  agreed that's what Americans tend to believe. Heck I mostly believe it. Of course the problem is they grant those businesses monopolies so then there is no competition
- matis140 8y ago
  PG&E is much worse than a private company. It is the weird result of heavy government regulation on the wrong most ant-competitive ways + lots of lobbying. PG&E is not subject to any free markets. Cali for example has 3 of these companies each serving certain regions. When there was completion in the power market you had multiple companies inside cities all providing different kinds of service (AC, DC, varying volts/amps) in crazy ways that would result in most of our modern electronics getting baked. The standards were good. It is however also difficult to have free market power when your cities heavily regulate who can put up utility lines and where so poles don't get too ugly or loaded. There are a lit of reasons what we have is worse than private or completely public.

bluejekyll 8y ago

How is this not fraud? Fraud is a crime. If someone knowingly falsifies documents, does that void the protection given by the corporations offer of limited liability?

mindslight 8y ago
Corporate liability protection is what you run into when you go up the management chain. When you go down the management chain, you end up at the "fall guy". The person who signed the falsified reports is likely in the second-lowest level of employees (the lowest level of management), who was ordered by the guy above him, who was pressured by the guy above him, who was incentivized by the guy above him, who was winked at by the guy above him, who concocted the scheme to please the guy above him, etc. Nobody really wants to see some low level employee's life ruined and his kids starve simply for being the dummy who accepted a promotion to sign the reports.
- bluejekyll 8y ago
  Yes, I agree, then it should fall on the CEO, who is responsible for signing off on all of this activity, like financials. You’re right that we don’t want the guys in the trucks getting busted for fraud, but that shouldn’t mean that we allow the upper management to get off.
  - int_19h 8y ago
    > You’re right that we don’t want the guys in the trucks getting busted for fraud If they knowingly participated in it, why not? In the military, where subordination is far stricter, there's still the concept of unlawful orders, and subordinates are expected to refuse to carry out such orders - and if they do not, they can be held accountable for that.
    - anticensor 8y ago
      Some militaries explicitly lack the concept of unlawful orders and surprise surprise - they are the least successful ones. Same thing also applies to businesses. If you do not have a complaint procedure, you acknowledge you are incompetent.

jaytaylor 8y ago

At what point does this kind of behavior warrant a replacement of 100% of the executive staff? How can we make such a mechanism a reality to incentavise and encourage better behavior? Utilities are too damn important for the bottom line of humanity to allow things to continue playing out in the same sad, pathetic, greedy fashion. The point of having public utilities is to enable a high standard standard of living so hopefully the really important problems can be solved before it's too late. PG&E seems to think the primary goal is for the utility company to be politically powerful and make cush millions for the execs. Sickening.

nameisu 8y ago
after 200% bonuses
WalterGR 8y ago
Utilities are too damn important for the bottom line of humanity to allow things to continue playing out in the same sad, pathetic, greedy fashion. Well said. As time goes on, I feel more and more like my intended purpose is just to be grist for the mill of American capitalism.
cft 8y ago
The CEO is a recent diversity hire. It makes a difficult dilemma for the establishment.
- tdb7893 8y ago
  I don't understand what the dilemma is here. Also I'm a little unsure of who the establishment is here, do you mean shareholders or something?
  - alexanderwept 8y ago
    The dilemma is that progressives insist that you can increase diversity (e.g more queers/colored people/self-proclaimed victims) without making compromises on competency. To blame the CEO's incompetency could give rational people some evidence with which to question the merit of diversity hires.

foobar1962 8y ago

> At what point does this kind of behavior warrant inprisonment of 100% of the executive staff? Fixed that for you.

deleted 8y ago
[deleted]
WalterGR 8y ago
It’s iMprisonment. I’m going to delete this comment... No need to reply.

mrhappyunhappy 8y ago

The same PG&E responsible for drinking water contamination with hexavalent chromium? Interesting. At some point monopolies and mismanaged companies should probably be dissolved and negligent management directly responsible imprisoned.