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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 th

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.
  - woah 8y ago
    Good thing PG&E makes every usb charger or god only knows what would happen to our phones
rayiner 8y ago
Because governments don’t want to be in the business of running electric utilities. Private electric utilities are the norm all over the US, and common in western europe as well. It works fine almost everywhere else. California’s problems are “because California” not because of the corporate structure.
- vlovich123 8y ago
  I mean at times they've certainly had outside help like Enron in the late 90s & early 00s screwing with it from Texas.
  - dctoedt 8y ago
    > screwing with it from Texas. Yes, Enron was headquartered in Houston, but: + CEO Ken Lay was from Missouri; + Later CEO Jeff Skilling grew up in New Jersey and Illinois, although he did go to college at SMU in Dallas and spent most of his career in Houston; + CFO Andy Fastow grew up in New Jersey.
twblalock 8y ago
The problem is that the government decided that utilities were going to end up as a natural monopoly, and then guaranteed that outcome by granting legal monopolies to utilities. Whether or not monopolies would have actually developed had the government stayed out of it is something we may never know. At the moment we have the worst of both worlds -- monopolies that gained their position because the government wanted them to, not because they emerged as natural monopolies by beating competitors. It's impossible to threaten their business because you need to get government permission to compete with them and you probably won't get it. They have no reason to care if their customers are happy. If the government had built the power lines (or allowed private companies to build them in exchange for selling access to others), and then allowed any number of private companies to generate power and deliver it over those lines, competing for customers on price and quality of service, I think we would be better off. If the natural monopoly theory turned out to be true then action could be taken at that time. I live in one of the few California cities that are allowed to form their own power companies and I'm definitely better off than my friends who have to use PG&E -- I get the same or better service for a lower price.
dragonwriter 8y ago
> 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? Because the political alignment which might ideologically support that is fairly new in California, and there is significant resistance to experimentation in how electricity is managed because the last time that was done (albeit, in a deregulatory direction), it combined with federal regulatory mismanagement to create the worst energy crisis in the State's history.

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.
- woah 8y ago
  Good thing PG&E makes every usb charger or god only knows what would happen to our phones

rayiner 8y ago

Because governments don’t want to be in the business of running electric utilities. Private electric utilities are the norm all over the US, and common in western europe as well. It works fine almost everywhere else. California’s problems are “because California” not because of the corporate structure.

vlovich123 8y ago
I mean at times they've certainly had outside help like Enron in the late 90s & early 00s screwing with it from Texas.
- dctoedt 8y ago
  > screwing with it from Texas. Yes, Enron was headquartered in Houston, but: + CEO Ken Lay was from Missouri; + Later CEO Jeff Skilling grew up in New Jersey and Illinois, although he did go to college at SMU in Dallas and spent most of his career in Houston; + CFO Andy Fastow grew up in New Jersey.

twblalock 8y ago

The problem is that the government decided that utilities were going to end up as a natural monopoly, and then guaranteed that outcome by granting legal monopolies to utilities. Whether or not monopolies would have actually developed had the government stayed out of it is something we may never know. At the moment we have the worst of both worlds -- monopolies that gained their position because the government wanted them to, not because they emerged as natural monopolies by beating competitors. It's impossible to threaten their business because you need to get government permission to compete with them and you probably won't get it. They have no reason to care if their customers are happy. If the government had built the power lines (or allowed private companies to build them in exchange for selling access to others), and then allowed any number of private companies to generate power and deliver it over those lines, competing for customers on price and quality of service, I think we would be better off. If the natural monopoly theory turned out to be true then action could be taken at that time. I live in one of the few California cities that are allowed to form their own power companies and I'm definitely better off than my friends who have to use PG&E -- I get the same or better service for a lower price.

dragonwriter 8y ago

> 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? Because the political alignment which might ideologically support that is fairly new in California, and there is significant resistance to experimentation in how electricity is managed because the last time that was done (albeit, in a deregulatory direction), it combined with federal regulatory mismanagement to create the worst energy crisis in the State's history.