7 ms·

Can we just get public utilities back? At least if a public utility is run poorly, we can attempt to fix it via legislation. PG&E sucks, doesn't care, and prob

Can we just get public utilities back? At least if a public utility is run poorly, we can attempt to fix it via legislation. PG&E sucks, doesn't care, and probably the people responsible are still making bank.

jeffdavis 7y ago
What exactly should they do differently? How should you run a power company in a tinderbox?
- skookum 7y ago
  This has been beaten to death in other threads related to this over the past several weeks, but the short answer to your question is "by putting money toward infrastructure upgrades instead of toward paying out dividends".
  - trhway 7y ago
    $1B/year dividends plus stock buybacks - for example $200M/$400M/$800M/$800M in 2018/2017/2016/2015 https://ycharts.com/companies/PCG/stock_buyback https://ycharts.com/companies/PCG/stock_buyback
    - testfoobar 7y ago
      You are assuming that a publicly run utility would have the same cost structure as a private corporation - so the dividends that the private entity paid out would be available for further investment. If anything, I would expect a publicly run utility to be less efficient at capital allocation. All "excess" capital may get used up in the inefficiencies instead of investments. Consider the challenges of city-wide transportation networks in providing service, maintaining infrastructure and investing for the future.
      - DiogenesKynikos 7y ago
        Why do you expect a private monopoly to allocate capital more efficiently than a publicly run utility?
        testfoobar 7y ago
        A private company sends excess capital to shareholders. A public utility is likely to send "excess" capital into politically driven projects. Alternatively, neither private nor publicly run capital is good at discounting the far future.
        trhway 7y ago
        >A private company sends excess capital to shareholders. A public utility is likely to send "excess" capital into politically driven projects. Sending the capital to maintenance would be a politically driven project right now for public utility. For private company even right now it is still a conflict of interests between maintenance and shareholder interests.
        testfoobar 7y ago
        I'm not saying that a private utility is the best answer. I'm saying that a publicly run utility may not be any better. Consider the following regarding NY, DC & SF subway systems: "How Politics and Bad Decisions Starved New York’s Subways Disruptions and delays have roiled the system this year. But the crisis was long in the making, fueled by a litany of errors, a Times investigation shows." 2017 https://www.nytimes.com/2017/11/18/nyregion/new-york-subway-system-failure-delays.html https://www.nytimes.com/2017/11/18/nyregion/new-york-subway-... "Metro sank into crisis despite decades of warnings Metro’s failure-prone subway — once considered a transportation jewel — is mired in disrepair because the transit agency neglected to heed warnings that its aging equipment and poor safety culture would someday lead to chronic breakdowns and calamities." 2016 https://www.washingtonpost.com/local/trafficandcommuting/metro-sank-into-crisis-despite-decades-of-warnings/2016/04/24/1c4db91c-0736-11e6-a12f-ea5aed7958dc_story.html https://www.washingtonpost.com/local/trafficandcommuting/met... "Past decisions haunt BART as it seeks voter OK for $3.5 billion bond" https://www.sfchronicle.com/bayarea/article/Why-BART-s-future-now-hinges-on-3-5-billion-9198515.php https://www.sfchronicle.com/bayarea/article/Why-BART-s-futur...
- oarabbus_ 7y ago
  I'm kind of astounded that you're framing the question in this manner, honestly. Perhaps you're simply unaware of the situation at hand. >Six of the 10 most destructive fires in California history were started by electrical equipment. PG&E’s equipment has sparked 19 major fires in 2017 and 2018. The utility was blamed for last year’s Camp Fire that destroyed the town of Paradise and killed 86 people. SoCal Edison is under mounting scrutiny over potential links to the start of the Saddleridge fire in Sylmar. Edison’s power lines also started the 2017 Thomas fire in Ventura and Santa Barbara counties that killed two people. Maybe they can start by replacing old, faulty equipment that is causing literally millions in damage and fatalities?
  - readams 7y ago
    It's billions. Not millions.
  - wtfisthis1 7y ago
    just FYI the tower that started this fire was recently inspected and repaired. this it's not as simple as more maintenance when we have piss poor fire prevention
- deleted 7y ago
  [deleted]
- anigbrowl 7y ago
  I'm sure you don't want to be mistaken for one of those annoying people who tries to weaponize the Socratic approach and feigns ignorance of all context. http://wondermark.com/1k62/ http://wondermark.com/1k62/
- dragonwriter 7y ago
  > What exactly should they do differently? They should not have spent the decade before the fires of the last three years paying generous dividends while deferring fire safety maintenance, as they were excoriated for this April by the judge overseeing their felony criminal sentence for the San Bruno gas explosion (who had the matter before him because the PG&E actions leading to the 2017 and 2018 fires were charged as, and ruled to be, violations of their probation for that criminal conviction.) Or, maybe, repeatedly committing deadly crimes in the operation of public utility should mean you are no longer entrusted to operate that utility, and the instrumentalities of the crime should be forfeited to the government the same way they would be from any individual criminal, with someone else (public or private) less prone to deadly criminality given the job.
- sliken 7y ago
  It might surprise you but a healthy utility doesn't spray the environment with sparks. The main risk is high winds swinging the lines and trees far enough to contact, the resulting short can cause fires. For this reason there's a standard for how far back trees should be trimmed for safety. Said standard was an excuse PG&E made for an additional funding request. When funded they didn't do the work, but instead paid a dividend. So now we have richer stock holders and a utility that's decided to turn off the power instead of trim the trees.
cwperkins 7y ago
Look at the problems that Eskom has. I'm no expert in the field, but I don't think this would alleviate the problem much. It sounds like PG&E needs investment to dig cables underground and probably should've done so a while ago.
- anonuser123456 7y ago
  They would need permission from their regulator to raise rates to get the return on investing in those improvements. But voters/rate payers don't like rate hikes... so no underground cables.
  - ummonk 7y ago
    Electric bills have always been such a small part of my utilities bills that I think a rate hike would be the right move.
    - codeddesign 7y ago
      Compared to? Water? Internet? Gas? What other major utilities are there. Unless you run purely on gas your electric bill will be your #1 cost utility.
      - ummonk 7y ago
        Gas, water, garbage, etc., never mind internet.
r00fus 7y ago
It might help if the CPUC didn't have appearances of corruption. I'd like to see the CPUC weighing in on PG&E heavily. On KQED Forum one caller mentioned that bankruptcy allows clawbacks of payments (bonus, dividends) that are deemed improper. Perhaps this is one way we can fund actually making PG&E state-owned. https://www.sandiegouniontribune.com/opinion/editorials/story/2019-09-06/cpuc-pge-scandal-peevey-picker-poor-oversight https://www.sandiegouniontribune.com/opinion/editorials/stor...
rgbrenner 7y ago
I don’t see how they (or anyone else that may operate PG&E) has any option here... PG&E operated under a risk model that allowed them to defer maintenance for years with no consequences for the fires they caused. When that turned out to be wrong, they need to 1) stop causing fires and 2) complete the maintenance they should have been doing. The problem is that #2 may take years to get caught up before they can begin operating normally again. So where they are now: they operate a high risk service during certain whether conditions, and they’re responsible if anything goes wrong. So what should they do given their current position? (As in right now.. no “should have”s that they can’t change.) shutting down occasionally seems pretty reasonable from their point of view.
- YawningAngel 7y ago
  How is a utility even allowed to "shut down" outside of some Act of God? If they can't run the utility to an acceptable SLA, it should be nationalised.
- OnlineGladiator 7y ago
  This does nothing to address the issue of how poor management is to blame for this situation in the first place. Yes, the blackouts are probably a reasonable response to the current situation, but what are they doing to make sure this never happens again? Basically where is the accountability? If they need to do rolling blackouts to prevent fires that's fine. Are the people that designed the system so poorly being blamed for leading us to this situation or are they being handsomely rewarded?
  - cgriswald 7y ago
    Given that we regularly have moderately strong winds here and that during the last blackout the winds were very calm, I’m quite skeptical of claims of this being a “reasonable” behavior. As far as I can tell this is a game of chicken and they’re betting the state will flinch first.
- csense 7y ago
  From PG&E's standpoint, what they should do is use the blackouts to extort as many concessions as possible from the state in terms of having the taxpayers pay for maintenance, and passing some kind of liability protection legislation so they're off the hook. What the state should do is seek some kind of emergency court judgment that electric power is an essential service that PG&E is not allowed to cut off for mere financial liability reasons. Then get a court order that says PG&E has to turn it on, if they refuse, jail people until they find somebody willing to follow the court order. Basically, if the state's doing their job, they'll tell PG&E they made their bed and now have to lie in it. Meaning they're forced to run, and if more disasters happen due to their reduced maintenance, they go bankrupt. The shareholders and bondholders are wiped out, and since it's an essential service, the state runs it using tax dollars until they can find new investors willing to take it on. In practice, this probably wouldn't happen until the state was done fixing the maintenance backlog on the taxpayers' dime. Since homes were destroyed and lives lost as a result of their actions, the people who originally decided to skimp on maintenance might be criminally liable and end up in jail, IANAL though.
dsfyu404ed 7y ago
> At least if a public utility is run poorly, we can attempt to fix it via legislation. Because that's worked so well for our publicly owned security services (police)? We definitely need to shake things up but bringing something under the umbrella of government doesn't magically make it not suck.
rhino369 7y ago
PG&E is a public utilty under the commonly understood definition. And you can fix a privately owned public utility through regulation in essentially the same way since its heavily regularted by California Public Utilities Commission. But the state-owned public utilities are just as incompetently run. For example, the state-owned water utilities are mentally disabling young kids all across the country. There is a common problem whether state-run or just state-regulated. The government wants to keep rates low. So they refuse to perform proper maintenance and upgrades.
- r00fus 7y ago
  Name a poorly run California public power utility.
  - rhino369 7y ago
    PG&E
randyrand 7y ago
That is true even today! We already have the option today to elect legislators that create laws that govern PG&E! In both scenarios, if we hire effective legislators we’ll get an effective outcome. Public vs Private is a non-issue. Good legislators and government is the real issue.
- SamReidHughes 7y ago
  But for that you need good voters.
zamalek 7y ago
PG&E may be under mismanagement and that may be exasperating the situation, but what California is experiencing is only going to get worse and more widespread. It may improve for a few years, but it will become more and more the norm, no matter what PG&E do (or don't, apparently, do). Fire due to power lines falling? California is not Nevada, that is certainly carbon consequences.

jeffdavis 7y ago

What exactly should they do differently? How should you run a power company in a tinderbox?

skookum 7y ago
This has been beaten to death in other threads related to this over the past several weeks, but the short answer to your question is "by putting money toward infrastructure upgrades instead of toward paying out dividends".
- trhway 7y ago
  $1B/year dividends plus stock buybacks - for example $200M/$400M/$800M/$800M in 2018/2017/2016/2015 https://ycharts.com/companies/PCG/stock_buyback https://ycharts.com/companies/PCG/stock_buyback
  - testfoobar 7y ago
    You are assuming that a publicly run utility would have the same cost structure as a private corporation - so the dividends that the private entity paid out would be available for further investment. If anything, I would expect a publicly run utility to be less efficient at capital allocation. All "excess" capital may get used up in the inefficiencies instead of investments. Consider the challenges of city-wide transportation networks in providing service, maintaining infrastructure and investing for the future.
    - DiogenesKynikos 7y ago
      Why do you expect a private monopoly to allocate capital more efficiently than a publicly run utility?
      - testfoobar 7y ago
        A private company sends excess capital to shareholders. A public utility is likely to send "excess" capital into politically driven projects. Alternatively, neither private nor publicly run capital is good at discounting the far future.
        trhway 7y ago
        >A private company sends excess capital to shareholders. A public utility is likely to send "excess" capital into politically driven projects. Sending the capital to maintenance would be a politically driven project right now for public utility. For private company even right now it is still a conflict of interests between maintenance and shareholder interests.
        testfoobar 7y ago
        I'm not saying that a private utility is the best answer. I'm saying that a publicly run utility may not be any better. Consider the following regarding NY, DC & SF subway systems: "How Politics and Bad Decisions Starved New York’s Subways Disruptions and delays have roiled the system this year. But the crisis was long in the making, fueled by a litany of errors, a Times investigation shows." 2017 https://www.nytimes.com/2017/11/18/nyregion/new-york-subway-system-failure-delays.html https://www.nytimes.com/2017/11/18/nyregion/new-york-subway-... "Metro sank into crisis despite decades of warnings Metro’s failure-prone subway — once considered a transportation jewel — is mired in disrepair because the transit agency neglected to heed warnings that its aging equipment and poor safety culture would someday lead to chronic breakdowns and calamities." 2016 https://www.washingtonpost.com/local/trafficandcommuting/metro-sank-into-crisis-despite-decades-of-warnings/2016/04/24/1c4db91c-0736-11e6-a12f-ea5aed7958dc_story.html https://www.washingtonpost.com/local/trafficandcommuting/met... "Past decisions haunt BART as it seeks voter OK for $3.5 billion bond" https://www.sfchronicle.com/bayarea/article/Why-BART-s-future-now-hinges-on-3-5-billion-9198515.php https://www.sfchronicle.com/bayarea/article/Why-BART-s-futur...
oarabbus_ 7y ago
I'm kind of astounded that you're framing the question in this manner, honestly. Perhaps you're simply unaware of the situation at hand. >Six of the 10 most destructive fires in California history were started by electrical equipment. PG&E’s equipment has sparked 19 major fires in 2017 and 2018. The utility was blamed for last year’s Camp Fire that destroyed the town of Paradise and killed 86 people. SoCal Edison is under mounting scrutiny over potential links to the start of the Saddleridge fire in Sylmar. Edison’s power lines also started the 2017 Thomas fire in Ventura and Santa Barbara counties that killed two people. Maybe they can start by replacing old, faulty equipment that is causing literally millions in damage and fatalities?
- readams 7y ago
  It's billions. Not millions.
- wtfisthis1 7y ago
  just FYI the tower that started this fire was recently inspected and repaired. this it's not as simple as more maintenance when we have piss poor fire prevention
deleted 7y ago
[deleted]
anigbrowl 7y ago
I'm sure you don't want to be mistaken for one of those annoying people who tries to weaponize the Socratic approach and feigns ignorance of all context. http://wondermark.com/1k62/ http://wondermark.com/1k62/
dragonwriter 7y ago
> What exactly should they do differently? They should not have spent the decade before the fires of the last three years paying generous dividends while deferring fire safety maintenance, as they were excoriated for this April by the judge overseeing their felony criminal sentence for the San Bruno gas explosion (who had the matter before him because the PG&E actions leading to the 2017 and 2018 fires were charged as, and ruled to be, violations of their probation for that criminal conviction.) Or, maybe, repeatedly committing deadly crimes in the operation of public utility should mean you are no longer entrusted to operate that utility, and the instrumentalities of the crime should be forfeited to the government the same way they would be from any individual criminal, with someone else (public or private) less prone to deadly criminality given the job.
sliken 7y ago
It might surprise you but a healthy utility doesn't spray the environment with sparks. The main risk is high winds swinging the lines and trees far enough to contact, the resulting short can cause fires. For this reason there's a standard for how far back trees should be trimmed for safety. Said standard was an excuse PG&E made for an additional funding request. When funded they didn't do the work, but instead paid a dividend. So now we have richer stock holders and a utility that's decided to turn off the power instead of trim the trees.

cwperkins 7y ago

Look at the problems that Eskom has. I'm no expert in the field, but I don't think this would alleviate the problem much. It sounds like PG&E needs investment to dig cables underground and probably should've done so a while ago.

anonuser123456 7y ago
They would need permission from their regulator to raise rates to get the return on investing in those improvements. But voters/rate payers don't like rate hikes... so no underground cables.
- ummonk 7y ago
  Electric bills have always been such a small part of my utilities bills that I think a rate hike would be the right move.
  - codeddesign 7y ago
    Compared to? Water? Internet? Gas? What other major utilities are there. Unless you run purely on gas your electric bill will be your #1 cost utility.
    - ummonk 7y ago
      Gas, water, garbage, etc., never mind internet.

r00fus 7y ago

It might help if the CPUC didn't have appearances of corruption. I'd like to see the CPUC weighing in on PG&E heavily. On KQED Forum one caller mentioned that bankruptcy allows clawbacks of payments (bonus, dividends) that are deemed improper. Perhaps this is one way we can fund actually making PG&E state-owned. https://www.sandiegouniontribune.com/opinion/editorials/story/2019-09-06/cpuc-pge-scandal-peevey-picker-poor-oversight https://www.sandiegouniontribune.com/opinion/editorials/stor...

rgbrenner 7y ago

I don’t see how they (or anyone else that may operate PG&E) has any option here... PG&E operated under a risk model that allowed them to defer maintenance for years with no consequences for the fires they caused. When that turned out to be wrong, they need to 1) stop causing fires and 2) complete the maintenance they should have been doing. The problem is that #2 may take years to get caught up before they can begin operating normally again. So where they are now: they operate a high risk service during certain whether conditions, and they’re responsible if anything goes wrong. So what should they do given their current position? (As in right now.. no “should have”s that they can’t change.) shutting down occasionally seems pretty reasonable from their point of view.

YawningAngel 7y ago
How is a utility even allowed to "shut down" outside of some Act of God? If they can't run the utility to an acceptable SLA, it should be nationalised.
OnlineGladiator 7y ago
This does nothing to address the issue of how poor management is to blame for this situation in the first place. Yes, the blackouts are probably a reasonable response to the current situation, but what are they doing to make sure this never happens again? Basically where is the accountability? If they need to do rolling blackouts to prevent fires that's fine. Are the people that designed the system so poorly being blamed for leading us to this situation or are they being handsomely rewarded?
- cgriswald 7y ago
  Given that we regularly have moderately strong winds here and that during the last blackout the winds were very calm, I’m quite skeptical of claims of this being a “reasonable” behavior. As far as I can tell this is a game of chicken and they’re betting the state will flinch first.
csense 7y ago
From PG&E's standpoint, what they should do is use the blackouts to extort as many concessions as possible from the state in terms of having the taxpayers pay for maintenance, and passing some kind of liability protection legislation so they're off the hook. What the state should do is seek some kind of emergency court judgment that electric power is an essential service that PG&E is not allowed to cut off for mere financial liability reasons. Then get a court order that says PG&E has to turn it on, if they refuse, jail people until they find somebody willing to follow the court order. Basically, if the state's doing their job, they'll tell PG&E they made their bed and now have to lie in it. Meaning they're forced to run, and if more disasters happen due to their reduced maintenance, they go bankrupt. The shareholders and bondholders are wiped out, and since it's an essential service, the state runs it using tax dollars until they can find new investors willing to take it on. In practice, this probably wouldn't happen until the state was done fixing the maintenance backlog on the taxpayers' dime. Since homes were destroyed and lives lost as a result of their actions, the people who originally decided to skimp on maintenance might be criminally liable and end up in jail, IANAL though.

dsfyu404ed 7y ago

> At least if a public utility is run poorly, we can attempt to fix it via legislation. Because that's worked so well for our publicly owned security services (police)? We definitely need to shake things up but bringing something under the umbrella of government doesn't magically make it not suck.

rhino369 7y ago

PG&E is a public utilty under the commonly understood definition. And you can fix a privately owned public utility through regulation in essentially the same way since its heavily regularted by California Public Utilities Commission. But the state-owned public utilities are just as incompetently run. For example, the state-owned water utilities are mentally disabling young kids all across the country. There is a common problem whether state-run or just state-regulated. The government wants to keep rates low. So they refuse to perform proper maintenance and upgrades.

r00fus 7y ago
Name a poorly run California public power utility.
- rhino369 7y ago
  PG&E

randyrand 7y ago

That is true even today! We already have the option today to elect legislators that create laws that govern PG&E! In both scenarios, if we hire effective legislators we’ll get an effective outcome. Public vs Private is a non-issue. Good legislators and government is the real issue.

SamReidHughes 7y ago
But for that you need good voters.

zamalek 7y ago

PG&E may be under mismanagement and that may be exasperating the situation, but what California is experiencing is only going to get worse and more widespread. It may improve for a few years, but it will become more and more the norm, no matter what PG&E do (or don't, apparently, do). Fire due to power lines falling? California is not Nevada, that is certainly carbon consequences.