9 ms·

Privatization of public services cannot work unless the private companies have liability for their actions. This is the necessary consequence of their negligen

• eastbayjake 8y ago
  Perhaps just a little more complicated and nuanced than that: https://www.bloomberg.com/opinion/articles/2019-01-14/pg-amp-e-pays-the-cost-of-fires https://www.bloomberg.com/opinion/articles/2019-01-14/pg-amp...
  • joe_the_user 8y ago
    PG&E has a long history of negligence and stripping whatever value remains from PG&E's shareholders is an eminently appropriate penalty. PG&E may indeed not be entirely responsible for the wild fires but it's responsible enough that this kind of penalty is warranted - ie, trimming trees around PG&E of course was something they knew they had to do and that they failed to do (just like their failure to maintain the pipe that exploded earlier). How California deals with fire risks and utility costs going forward is complex question. Naturally, it's made more complex by the influence large corporations wield. In this day and age, bankruptcy still offers the possibility of PG&E sidling rate-payers with its cost while maintaining shareholder value, despite this being exactly what bankruptcy is intended to avoid. Naturally, I'd like to see the state of California prevent this but I'm not holding my breath. IE, California theoretically could seize PG&E and run it as a public utility but it probably won't and thus little will change.
  • DannyBee 8y ago
    Sure. I wouldn't claim otherwise. However,there are some key things missing here: 1. Lot of states have strict liability of this form for utilities. 2. California is not entirely unique in the land mass of the united states (or the world) in the issues it faces here. It is only unique in that it has not done a good job overcoming them. All of these viewpoints seem to start from from a position that it's impossible for PG&E to succeed (due to global warming, legal climate, etc), and then ask "what do we do in that situation". But as mentioned, it's simply not impossible for PG&E to succeed, and also no evidence that it is particularly harder than it is in similarly situated areas.
    • hindsightbias 8y ago
      Can you tell me what other state has dense urban environments in drier, rugged, forested terrain and seemingly yearly wind events > 60 mph? Does not seem like a large venn set to me.
      • zrobotics 8y ago
        Plenty of front range Colorado would qualify. Sure, it isn't dry year-round, but it gets plenty dry during fire season. And with the pine beetle problem, there are large areas with massive amounts of fuel.
• joe_the_user 8y ago
  Well, by the time crucial services are falling apart and people are dying, getting a settlement is cold comfort (obviously better than nothing but still). This is an argument for simply not privatizing public services or alternatively, for regulating such privatized services more heavily.
  • anonuser123456 8y ago
    What makes you believe a publicly run institution will do a better job?
    • woolvalley 8y ago
      You can't sue them due to sovereign immunity. :p
    • toomuchtodo 8y ago
      They're accountable to voters, not shareholders. Seems to work for roads, fire, police, water and sewer, muni broadband, most shared services.
      • tatersolid 8y ago
        > Seems to work for roads, fire, police, water and sewer, muni broadband, most shared services. You’ve never been to Chicago, eh?
        • toomuchtodo 8y ago
          Born, raised, own several rental properties in the western suburbs. Recently renovated tollways are 100% well done (especially the LED lighting), and the MDW expansion is going to be glorious when it's completed. Is there a cost? Sure. Society costs money. Is there corruption in the process? Sure. We're working on it.
          • tatersolid 8y ago
• woah 8y ago
  > California law compels utilities to pay for damages from wildfires if their equipment caused the blazes — even if the utilities weren’t negligent through, say, inadequate maintenance. This would have happened whether or not PG&E was private. People want a scapegoat and PG&E is California's.
  • joe_the_user 8y ago
    Keep in mind that PG&E performing adequate maintenance would have made causing a blaze considerably less likely. And all evidence points to PG&E indeed engaging in inadequate maintenance and doing so for year. PGE clearly isn't the only entity to blame for the disastrous destruction of the town of Paradise but it certainly seems to carry considerable blame.
    • rwcarlsen 8y ago
      Less frequent fires doesn't necessarily mean less overall fire damage. And no-fires is not only impossible, but not desirable - see https://en.wikipedia.org/wiki/History_of_wildfire_suppression_in_the_United_States#Suppression_as_a_rule https://en.wikipedia.org/wiki/History_of_wildfire_suppressio...
      • joe_the_user 8y ago
        Indeed, bad forestry, drought, global warming and so-forth are all to blame for large fires. I don't think that implies that then PG&E should have taken the route of ignoring fire safety and imposing electrically activated "uncontrolled burn policy" here. I mean, PG&E lines starting, say, 15 fires rather than 1,500 in a given high-wind, low-moisture night might have given some of the 60 people who died a bit more time to escape.
        • Aloha 8y ago
          the 1500 number isnt probably as big as it sounds. Based on this a PG&E caused fire could be caused by someone running into a power pole or anything else that causes downed lines. Fires from power lines dont sound like a huge deal, and those 1500 fires are spread over PG&E's whole service area too
• Aloha 8y ago
  Can you show me that muni/pud power utilities are more responsive or better at paying out on liability?
• gimmeThaBeet 8y ago
  The problem with applying it to utilities is that they're near universal and have a natural monopoly, so when you try and punish them, the tendency to seek recovery through rates makes it everyone's problem. And I'm not saying this from a "privatized profit/socialized loss" argument standpoint. I'm saying it from a "nearly everyone is some electric utility's customer, so when you find the utility liable, the customers (i.e. everyone) ends up paying for it somehow". If the state assumed stewardship of the grid, the liability would still go to customers through either rates or taxes. So at that point, what we're really discussing, is how you feel about/how does fully public ownership of an electric utility fare relative to a regulated private entity replete with executive compensation and capitalistic motivations? Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another. Who knows, maybe California will decide to try some grand gridless experiment. But the options are limited.
  • joe_the_user 8y ago
    Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another. That's ridiculous. Broadly, there's nothing preventing California from seizing PG&E's assets as partial compensation for the company's past behavior. Thus the state of California could run PG&E as public utility pretty quickly if it wished and then charge whatever rates it felt appropriate, making up costs with taxes or not. The main thing that would happen is PG&E shareholders and possibly bondholders lose their investment, high paid private executives and consultants are fired and the savings to the state.
    • njarboe 8y ago
      The bigger question is would this cause a decrease of fires and other problems, reduce costs, and increase reliability and access to power. Hard to know. The problems of delivering power in California are hard and complicated.
    • dahdum 8y ago
      I think you are underestimating the impact drastically of California seizing and nationalizing PG&E, or even trying to.
• lenticular 8y ago
  Yet another lesson of why natural monopolies should be under government control.
  • debacle 8y ago
    Utility companies like PG&E are highly regulated. I worked at a company that serviced PG&E a while back and compliance made up a large part of our staff and were the first and last word on any business decisions.
  • closeparen 8y ago
    How would government control have prevented the fire?
    • lenticular 8y ago
      PG&E by many reports has been negligent in maintenance. The taxpayers will ultimately bail them out, since they are essentially too big to fail.
  • ams6110 8y ago
    So instead of PG&E shareholders taking the hit for negligence, the taxpayers will?
    • antisthenes 8y ago
      The taxpayers are going to take a hit regardless. Who do you think will be bailing out PG&E in the end? Or do you think they will just leave 16 million customers without electricity?
• jmspring 8y ago
  PG&E diverted funds for maintenance to their parent corp in the form of profits/bonuses/etc. This was going on for a very long time. PG&E has been ramping up monitoring and maintenance (tree trimming/removal/etc) over the last couple of years. In particular with the Camp Fire, a distribution line that size requires California PUC approval to shut it down -- due to the sizable grid impact. I can't find the reference, but my understanding is is that PG&E had asked for that approval earlier in the day/week to do the shutdown/maintenance but the request lingered (it takes time).
• albertop 8y ago
  What about keeping government and environmental groups accountable for forcing polices that lead to damages - lack of forest clearing? They even admitted that existing approach was wrong.
  • maxxxxx 8y ago
    Is that even feasible on a large scale? It seems to be more reasonable to create cleared perimeters around towns and also not to have single houses in the middle of forests.
• TomMckenny 8y ago
  And so there is an award that doesn't go toward improving infrastructure but leaves the organization for some other purpose (say 30% to lawyers fees). As opposed to legislatively forcing those assets to go where they are needed. It seems privatizing utilities was not such a wonderful thing after all.
• capkutay 8y ago
  It would still be funny to imagine California taking over electricity services. "State-wide power coverage is estimated to be completed by year 2035 after a 10 year Environmental Review and pending lawsuits from neighbors who don't want power lines in their neighborhood. The costs were originally estimated for $10 billion but are now expected to be around $40 billilon" .... "Meanwhile a startup called SmartZap is providing cheap electricity that you can purchase through their smartphone app."
  • deleted 8y ago
    [deleted]
  • Roboprog 8y ago
    Several cities / regions in CA have their own electric utilities Few big issues with SMUD, MID or TID
  • joejerryronnie 8y ago
    Sure, SmartZap electricity may be cheap and the app is super intuitive, but they’re subsidizing rates through VC funding and not paying their “independent contractor” installers a living wage.
• DINKDINK 8y ago
  This isn't a privatization of a public service, it's a state-granted monopoly. If private property was respected, you could freely associate with another provider. Citizens of California can't.
  • ucaetano 8y ago
    Yeah, because someone would build a second distribution line next to an existing one. Can you imagine ever house with 10 wire pairs coming in from the street, one from each utility? Competition on distribution or transmission is simply not going to happen. But it can - and should - happen on generation, as it already does in a lot of markets around the world.
    • DINKDINK 8y ago
      You're talking about T&D redundancy when I'm talking about an open market of competition. You don't have to have T&D redundancy to have open market of competition. If you live in an area with an abundance of sun and wind, you can buy your local T&D and provide competitive pricing to your market. You cannot do this when there's a state-granted monopoly.
      • ucaetano 8y ago
        No, I'm not talking about T&D redundancy, I'm talking about competition and game theory. Once you have a distribution network or a transmission line in place, nobody will build a second one. It doesn't make any economic sense. Even if it was a complete laissez-faire (a bad idea, IMHO), there would be no competition on transmission lines and distribution networks. But I do agree with more competition, particularly on generation. And you can make it better by decoupling transmission from distribution, and forcing the separate operation of each, plus a state-managed electricity pool, resulting in customers buying either from the pool or directly from generators.
• tomohawk 8y ago
  On the contrary. It was private industry that electrified the US. Samuel Insull realized that the way to achieve inexpensive electricity for everyone was to have much larger power plants than people were envisioning at the time. The logical conclusion of this was to create electrical monopolies that were regulated. He electrified Chicago and a large swathe of the country at a breathtaking pace. So, no, the government did not create the electrical system and then privatize it. It was private from the get-go, and when utilities became monopolies, they were regulated.
• smaddox 8y ago
  Privatization of natural monopolies cannot work, period. Why anyone would think otherwise is beyond comprehension. At least when government-run utilities screw up, you can vote to change things. The only option when it's a private company is to move.
  • ucaetano 8y ago
    > Privatization of natural monopolies cannot work, period. Why anyone would think otherwise is beyond comprehension. Reality begs to differ.
• mc32 8y ago
  The state was (maybe still) considering either breaking up PG&E or taking it over. I'd like to see change, but it's not entirely clear to me that it would run better as a state enterprise ---as long as many of the same people are there. But who knows.