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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...
        DiogenesKynikos 7y ago
        Private monopolies like PG&E, which face little to no competition, are not typically known for their efficiency. Such an important public service which naturally tends towards monopoly should either be publicly owned, or it should be subject to extensive regulatory control.
        fzeroracer 7y ago
        That excess capital being sent to shareholders clearly isn't being reinvested into stopping fires and maintenance. Because then, you know, cutting power might not be necessary? It's amazing we're debating the pros/cons of public vs private utilities while we have an example of an incredibly corrupt private utility that needs to be shutdown and with execs thrown in jail for gross negligence.
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.

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...
      - DiogenesKynikos 7y ago
        Private monopolies like PG&E, which face little to no competition, are not typically known for their efficiency. Such an important public service which naturally tends towards monopoly should either be publicly owned, or it should be subject to extensive regulatory control.
      - fzeroracer 7y ago
        That excess capital being sent to shareholders clearly isn't being reinvested into stopping fires and maintenance. Because then, you know, cutting power might not be necessary? It's amazing we're debating the pros/cons of public vs private utilities while we have an example of an incredibly corrupt private utility that needs to be shutdown and with execs thrown in jail for gross negligence.

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.