7 ms·

My money is they get taken over by the state. Privatizing a utility was always a stupid move to begin with and they are finally proving it beyond any reasonable

My money is they get taken over by the state. Privatizing a utility was always a stupid move to begin with and they are finally proving it beyond any reasonable doubt. It's time we get to fixing all the damage Regan did to this country.

whatshisface 7y ago
How did president Regan privatize a California utility?
- Dobbs 7y ago
  Not sure I’m this particular case but I’m going to go with Reagan did it when he was California’s Governor.
  - masonic 7y ago
    You're going to "go with" something... that never happened?
- pjc50 7y ago
  Reagan was governor of California at one point in the 70s. However, I'm not clear whether PG&E was ever actually nationalised?
  - red-indian 7y ago
    1967 and 1971.
- dredmorbius 7y ago
  PG&E was never a public utility. I suspect the harm meant was more of the general form of "government is not the solution to our problems, government is the problem". http://factmyth.com/factoids/reagan-said-government-is-the-problem/ http://factmyth.com/factoids/reagan-said-government-is-the-p...
  - listenallyall 7y ago
    Except that poster wanted the utility to be taken over by the government. Thus the comment was in favor of increasing government.
    - dredmorbius 7y ago
      Which could well be a good thing. Reagan's dictum is often invoked to mindlessly reject any such possibility.
tryptophan 7y ago
Private utilites work just fine in every other state. Maybe this just a California being California issue again. No need to throw the baby out with the bathwater...
- danans 7y ago
  > Maybe this just a California being California issue again. California is a high fire risk state regardless of whether the utility is publicly owned or investor (aka privately) owned. The risk is on a level that doesn't occur in many other states. If the costs of fires are going to be socialized anyways (by immunizing utility from the liability, hence putting the burden on the ratepayers), the question of whether the utility should be publicly owned in order to reduce the obligation to shareholders is a valid one. Either that or PGE will have to dramatically increase it's expenditures on maintenance to reduce the fire risk, which will have to come from shareholders' and ratepayers' pockets (the latter of which is not permitted under current PUC rules, IIUC).
  - BurningFrog 7y ago
    > ...or PGE will have to [...] which is not permitted under current PUC rules Sounds a lot like California being California to me...
    - Dylan16807 7y ago
      Your "[...]" skips over the option where they have smaller immediate profits in exchange for securing the future of the company. Is that a bad option for some reason?
      - deleted 7y ago
        [deleted]
      - AnthonyMouse 7y ago
        A company selling shares to raise capital is an alternative to other methods of raising capital, like taking out a loan. Asking why they don't just make smaller profits is like asking why they don't just pay a lower interest rate on their loans. It presumes that someone exists who is willing to lend them the money at the lower rate of return. Companies have the option of shutting down operations and selling off their assets. PG&E presumably has a fleet of trucks and equipment, land rights etc., which were paid for with investors' money. If their profits fall below the level that could be achieved by selling off those assets and then investing the money at the market rate of return, it becomes profitable for raiders to come in and buy the company and do that with it, so the company has to stay more profitable than that in order to prevent that from happening.
hwbehrens 7y ago
Do you see a legal pathway for this to happen? In one scenario, CA keeps legislating more and more liabilities to PG&E until it goes bankrupt, in which case the state could take it over, but would also be saddled with those same liabilities. Alternatively, they step back the liabilities and try to negotiate a deal with PG&E to take over, which would essentially be a buyout. However, what would the incentive be to sell a profitable company with a natural monopoly in one of the nation's largest power markets? I'd imagine the investors would price it so high that the deal would quickly become unattractive to the state. If they went the expropriation route, that would be a hell of a court case to watch.
- arbitrary_name 7y ago
  Use the threat of liabilities to get a sweetheart price from the hedge fund owners whos hands are tied. Offer bondolders a good deal, and refinance using state bonds to handle the liabilities.
  - dsfyu404ed 7y ago
    Don't forget the "legislate away the liabilities after you become owner" part.
    - ncmncm 7y ago
      No. Maintain, and let the previous owners pay for their own liabilities.
jimmcslim 7y ago
My view is that transmission and distribution of electricity are natural monopolies and therefore should be government-owned. Generation however should be opened up to market mechanisms that find a price for power, reliability/dispatchability, and emissions.
- mjevans 7y ago
  Some forms of generation; the ones that aren't tied to specific geographic circumstances or LARGE heavily regulated super-industrial sites (that I personally recommend are secured by the military due to high energy densities).
tomohawk 7y ago
Private companies electrified the US. This model was pioneered by Samuel Insull. https://www.masterresource.org/insull-samuel/insull-rural-electrification/ https://www.masterresource.org/insull-samuel/insull-rural-el... FDR didn't like competition for attention, and hounded Insull in court for years.
- dredmorbius 7y ago
  Private companies electrified ... specific high-profit regions of the United States. They were profoundly indifferent to most rural regions, leading to the Rural Electrification Act (1936). https://en.wikipedia.org/wiki/Rural_Electrification_Act https://en.wikipedia.org/wiki/Rural_Electrification_Act Thomas Edison's first power plant, the Pearl Street Power Station (1882) powered just 82 customers initially, largely commercial and industrial users. Large-scale electrification within the US was developed through public works including the Tenessee Valley Authority, Bonneville Power Administration, Hoover Dam, and numerous others. Four federal regional power administrations, the BPA, Southeastern, Southwestern, and Western Area Power Administrations, still exist. Many rural regions are served by electric (and telephone) cooperatives: https://en.wikipedia.org/wiki/List_of_utility_cooperatives#US_electric_cooperatives https://en.wikipedia.org/wiki/List_of_utility_cooperatives#U...
  - jhayward 7y ago
    Texas was largely transformed by the Rural Electrification project of LBJ. Wouldn't have happened without the government.
  - tomohawk 7y ago
    Samuel Insull developed the public utility model and proved it to work by extending publicly regulated utilities into 30 states prior to the advent of the New Deal. Insull was put out of business by New York bankers who wanted to take over his business. http://blog.heartland.org/2013/07/samuel-insull-getting-the-story-straight/ http://blog.heartland.org/2013/07/samuel-insull-getting-the-... FDR needed enemies to blame to get his New Deal, and he had Insull hounded in the courts. Insull was found not guilty of any wrongdoing, but died penniless. If you want to know history, you have to find better sources than wikipedia. There are plenty of books about this great man and this interesting period of history.
dragonwriter 7y ago
> My money is they get taken over by the state. A number of their operations are being taken over by local public utilities in the current bankruptcy. > Privatizing a utility was always a stupid move to begin with PG&E isn't the result of privatizing a public utility, it's always been private. > It's time we get to fixing all the damage Regan did to this country If you mean Ronald Reagan, PG&E (or it's predecessors before various mergers and name changes) has been a private energy company since before he was born, so while there is lots you can blame him for, PG&E existing as a private energy firm isn't among them.
- r00fus 7y ago
  Transmission is not being localized. AFAIK, PG&E still owns the vast majority of lines.
dsfyu404ed 7y ago
>My money is they get taken over by the state This is the same as the "shielded from liability" option, just in a roundabout way.

whatshisface 7y ago

How did president Regan privatize a California utility?

Dobbs 7y ago
Not sure I’m this particular case but I’m going to go with Reagan did it when he was California’s Governor.
- masonic 7y ago
  You're going to "go with" something... that never happened?
pjc50 7y ago
Reagan was governor of California at one point in the 70s. However, I'm not clear whether PG&E was ever actually nationalised?
- red-indian 7y ago
  1967 and 1971.
dredmorbius 7y ago
PG&E was never a public utility. I suspect the harm meant was more of the general form of "government is not the solution to our problems, government is the problem". http://factmyth.com/factoids/reagan-said-government-is-the-problem/ http://factmyth.com/factoids/reagan-said-government-is-the-p...
- listenallyall 7y ago
  Except that poster wanted the utility to be taken over by the government. Thus the comment was in favor of increasing government.
  - dredmorbius 7y ago
    Which could well be a good thing. Reagan's dictum is often invoked to mindlessly reject any such possibility.

tryptophan 7y ago

Private utilites work just fine in every other state. Maybe this just a California being California issue again. No need to throw the baby out with the bathwater...

danans 7y ago
> Maybe this just a California being California issue again. California is a high fire risk state regardless of whether the utility is publicly owned or investor (aka privately) owned. The risk is on a level that doesn't occur in many other states. If the costs of fires are going to be socialized anyways (by immunizing utility from the liability, hence putting the burden on the ratepayers), the question of whether the utility should be publicly owned in order to reduce the obligation to shareholders is a valid one. Either that or PGE will have to dramatically increase it's expenditures on maintenance to reduce the fire risk, which will have to come from shareholders' and ratepayers' pockets (the latter of which is not permitted under current PUC rules, IIUC).
- BurningFrog 7y ago
  > ...or PGE will have to [...] which is not permitted under current PUC rules Sounds a lot like California being California to me...
  - Dylan16807 7y ago
    Your "[...]" skips over the option where they have smaller immediate profits in exchange for securing the future of the company. Is that a bad option for some reason?
    - deleted 7y ago
      [deleted]
    - AnthonyMouse 7y ago
      A company selling shares to raise capital is an alternative to other methods of raising capital, like taking out a loan. Asking why they don't just make smaller profits is like asking why they don't just pay a lower interest rate on their loans. It presumes that someone exists who is willing to lend them the money at the lower rate of return. Companies have the option of shutting down operations and selling off their assets. PG&E presumably has a fleet of trucks and equipment, land rights etc., which were paid for with investors' money. If their profits fall below the level that could be achieved by selling off those assets and then investing the money at the market rate of return, it becomes profitable for raiders to come in and buy the company and do that with it, so the company has to stay more profitable than that in order to prevent that from happening.

hwbehrens 7y ago

Do you see a legal pathway for this to happen? In one scenario, CA keeps legislating more and more liabilities to PG&E until it goes bankrupt, in which case the state could take it over, but would also be saddled with those same liabilities. Alternatively, they step back the liabilities and try to negotiate a deal with PG&E to take over, which would essentially be a buyout. However, what would the incentive be to sell a profitable company with a natural monopoly in one of the nation's largest power markets? I'd imagine the investors would price it so high that the deal would quickly become unattractive to the state. If they went the expropriation route, that would be a hell of a court case to watch.

arbitrary_name 7y ago
Use the threat of liabilities to get a sweetheart price from the hedge fund owners whos hands are tied. Offer bondolders a good deal, and refinance using state bonds to handle the liabilities.
- dsfyu404ed 7y ago
  Don't forget the "legislate away the liabilities after you become owner" part.
  - ncmncm 7y ago
    No. Maintain, and let the previous owners pay for their own liabilities.

jimmcslim 7y ago

My view is that transmission and distribution of electricity are natural monopolies and therefore should be government-owned. Generation however should be opened up to market mechanisms that find a price for power, reliability/dispatchability, and emissions.

mjevans 7y ago
Some forms of generation; the ones that aren't tied to specific geographic circumstances or LARGE heavily regulated super-industrial sites (that I personally recommend are secured by the military due to high energy densities).

tomohawk 7y ago

Private companies electrified the US. This model was pioneered by Samuel Insull. https://www.masterresource.org/insull-samuel/insull-rural-electrification/ https://www.masterresource.org/insull-samuel/insull-rural-el... FDR didn't like competition for attention, and hounded Insull in court for years.

dredmorbius 7y ago
Private companies electrified ... specific high-profit regions of the United States. They were profoundly indifferent to most rural regions, leading to the Rural Electrification Act (1936). https://en.wikipedia.org/wiki/Rural_Electrification_Act https://en.wikipedia.org/wiki/Rural_Electrification_Act Thomas Edison's first power plant, the Pearl Street Power Station (1882) powered just 82 customers initially, largely commercial and industrial users. Large-scale electrification within the US was developed through public works including the Tenessee Valley Authority, Bonneville Power Administration, Hoover Dam, and numerous others. Four federal regional power administrations, the BPA, Southeastern, Southwestern, and Western Area Power Administrations, still exist. Many rural regions are served by electric (and telephone) cooperatives: https://en.wikipedia.org/wiki/List_of_utility_cooperatives#US_electric_cooperatives https://en.wikipedia.org/wiki/List_of_utility_cooperatives#U...
- jhayward 7y ago
  Texas was largely transformed by the Rural Electrification project of LBJ. Wouldn't have happened without the government.
- tomohawk 7y ago
  Samuel Insull developed the public utility model and proved it to work by extending publicly regulated utilities into 30 states prior to the advent of the New Deal. Insull was put out of business by New York bankers who wanted to take over his business. http://blog.heartland.org/2013/07/samuel-insull-getting-the-story-straight/ http://blog.heartland.org/2013/07/samuel-insull-getting-the-... FDR needed enemies to blame to get his New Deal, and he had Insull hounded in the courts. Insull was found not guilty of any wrongdoing, but died penniless. If you want to know history, you have to find better sources than wikipedia. There are plenty of books about this great man and this interesting period of history.

dragonwriter 7y ago

> My money is they get taken over by the state. A number of their operations are being taken over by local public utilities in the current bankruptcy. > Privatizing a utility was always a stupid move to begin with PG&E isn't the result of privatizing a public utility, it's always been private. > It's time we get to fixing all the damage Regan did to this country If you mean Ronald Reagan, PG&E (or it's predecessors before various mergers and name changes) has been a private energy company since before he was born, so while there is lots you can blame him for, PG&E existing as a private energy firm isn't among them.

r00fus 7y ago
Transmission is not being localized. AFAIK, PG&E still owns the vast majority of lines.

dsfyu404ed 7y ago

>My money is they get taken over by the state This is the same as the "shielded from liability" option, just in a roundabout way.