5 ms·

Not to dispute your later statement, but power outages aren’t a new thing in California. This State of affairs in particular is because PG&E has been held liab

by SllX 7y ago

Not to dispute your later statement, but power outages aren’t a new thing in California. This State of affairs in particular is because PG&E has been held liable for fires caused by their equipment, to which they flipped off the courts and filed for bankruptcy. Should they be held liable? I don’t know, but effectively an entire town was wiped off the map and we experienced a couple weeks of continuous smog as far south as Santa Cruz from what I heard, San Francisco was just filled with smoke and pollution and face masks became part of the uniform around here along with Apple Watches, AirPods and messenger bags or backpacks. Long term, power generation will become more decentralized anyway, because if there’s one thing we have in abundance it is sunshine. Most houses even with solar panels could not disconnect themselves from the grid and not lose their power, but this will likely incentivize people to look into being able to run their homes off-the-grid for at least a few days at a time. As for tech companies? For any datacenter, or company running enough equipment to qualify as more or less a datacenter, power outages are a risk factor that you plan for and you try to mitigate. Doesn’t matter where in the world you are or what the capriciousness of the local electrical utility is like, even if you’re running your own source of power.

snagglegaggle 7y ago
The rub with this is PG&E was avoiding maintenance to pay out dividends. The situation was entirely preventable. Frankly it's scary how everyone is apologizing for the utility company's management.
- AJ007 7y ago
  They also had massive negative cashflow going back over a decade and paid for those dividends with lender’s money. The entire thing wasn’t sustainable. It isn’t necessarily fair to single out California because many other public utilities are in a similar situation, California just has added significant natural disaster risks. Regulated utilities have been considered a safe investment for so long that many shareholders and probably management have been asleep at the wheel for years. The regulatory aspect means there isn’t much those parties can do without state/voter approval. I’m hardly an expert in capital markets, so I’m not going to claim if PG&E did or didn’t pay dividends X would happen. I don’t know. What I do know is PG&E probably needed 3-4x the revenue they had, either by increased rates or borrowing which would lead to even greater rate increases eventually. I would say in general this is a good thing. California’s residents are now extremely incentivized to move to home solar + battery storage. California may even hit their renewable energy goals ahead of schedule.
- mistrial9 7y ago
  Modern PG&E have been repeatedly sued for raiding tree maintenance budgets, which they are legally required to use, going back to at least 1999. In the same era, executive bonuses have been consistently large. When Enron happened, during discovery, they found out that a large and carefully covered holding company had been pulling cash out of the tightly regulated main body, to buy similar power producing assets internationally, despite no charter to do so.
- rayiner 7y ago
  PG&E pays out dividends out of profits. The amount of profit it makes is strictly regulated by the government, based on the California Public Utility Commission’s rate-making. (What’s called an “authorized rate of return.”) PG&E would submit detailed proposals to the government about what it was planning to spend money on, and how much it would cost and what rates would have to be, and the government would approve those proposals and award PG&E a profit as some percentage of the investment: https://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/About_Us/Organization/Divisions/Policy_and_Planning/PPD_Work/PPD_Work_Products_(2014_forward)/PPD%20General%20Rate%20Case%20Manual.pdf https://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Co... So it is 100% false to say that “PG&E was avoiding maintenance to pay out dividends.” If PG&E didn’t spend money on safety and maintenance, then the rates, and PG&E’s profit, would go down. Conversely, if PG&E wanted to spend the money on safety, that wouldn’t cut into profits. It would submit a rate case to the CPUC with that proposed spending. CPUC would authorize raising rates, and award PG&E a larger profit (in absolute terms) because PG&E was spending more.
  - hcurtiss 7y ago
    That's right. And without that return to investors, PG&E would not have the private capital it needs to operate.
  - dragonwriter 7y ago
    > PG&E pays out dividends out of profits. The amount of profit it makes is strictly regulated by the government, based on the California Public Utility Commission’s rate-making. If you want to blame the state for PG&E management decisions, you are essentially saying that PG&E’s shareholder ownership and its own management are irrelevant, in which case they are at best a superfluous expense that should be avoided by making PG&E’s functions the domain of a publicly-operated utility.
    - rayiner 7y ago
      > If you want to blame the state for PG&E management decisions, you are essentially saying that PG&E’s shareholder ownership and its own management are irrelevant, in which case they are at best a superfluous expense that should be avoided by making PG&E’s functions the domain of a publicly-operated utility. Well the second part hardly follows from the first part. PG&E provides private capital for investments the State may not be willing or able to provide. PG&E provides the expertise in building and maintaining a power grid, and manages the day to day operations. For that they get a reasonable margin of profit. But the State sets prices, and decides what is a “prudent investment” that can be recovered from rate payers. As a result, it is the State that is responsible for the trade off between keeping retail rates low and investing in infrastructure upgrades such as enhanced fire safety. The State is also responsible for setting big picture policy goals, and has done so for example by imposing requirements with respect to purchasing renewable energy. (Which I think are a good thing by the way.) When the State is the one making those decisions, then yes, it should be held accountable. As to publicly operated utilities—they have the same problem, because their rates are regulated by agencies like the CPUC. Underinvestment in utility infrastructure is a chronic investment around the country, and there seems to be no difference between public and investor owned utilities in that regard. The problem is utility boards.
falcolas 7y ago
We need to be careful and not think of Solar as a silver bullet for this. Very few (likely less than 1%) of home solar installations can handle the load of the home for a full 24 hour cycle. To do so, they would need lots of batteries, expensive inverters and robust controlling equipment. From what I’ve read here on HN, a self-sufficient solar setup is expensive enough that it will cost more than being on the grid, even when amortized over the lifespan of the setup.
- SllX 7y ago
  Ah, nothing in my comment was intended to imply that solar was a silver bullet, but the way I phrased it was off the cuff because I didn’t want to go into the myriad of ways and emerging technologies that will allow people and businesses to take themselves off the grid at least temporarily. That’s the key, temporarily. You’re probably giving up AC, you’re probably going to want something like Tesla’s Powerwall. You’re probably not going to be running your washer and dryer during that time. You probably want any desktop computers you have on UPS. You probably want your appliances using as little electricity as possible even during normal operation. You probably don’t want to leave all the lights on. And I forget the name of this one, but you will need an extra piece of equipment beyond the panels and batteries to actually take your house off the grid. Personally I’m also excited for the possibility of miniature hydrogen generators as a store of power. > From what I’ve read here on HN, a self-sufficient solar setup is expensive enough that it will cost more than being on the grid, even when amortized over the lifespan of the setup. That’s true today and I will not dispute it, but expect prices to come down , and with PG&E’s capriciousness, the cost of doing nothing to rise, and installation opportunities to increase. If the utility is going to behave in a capricious manner, then people will respond over time. This can be on a personal level by trying to insulate their own homes from power failures as much as possible, or even at the municipal level where cities allow new utilities to come in and replace or compete with PG&E. We don’t need PG&E, we just need electricity. People are creative, we’ll find ways to make that happen, even with PG&E fighting tooth and nail against their own marginalization.
  - falcolas 7y ago
    A Tesla Powerwall 2 can hold 13.5 kWh of energy. In the US, the lowest average home consumes around 17 kWh of electricity a day; the highest uses 42. This usage does not correlate with the hose usage, meaning that most of the power is consumed when the sun is low in the sky or during the night - putting the majority of the load on the Tesla Powerwall. You'd need at least two Powerwalls to avoid a significant change in lifestyle, plus ~5kW of solar cells to fill those batteries every day (not accounting for cloudy days). And a change in lifestyle may not even be practical, since most housing constructed in the last few decades was built with the assumption that AC and electric heating are available. https://www.solarreviews.com/blog/how-many-solar-panels-do-i-need-to-run-my-house https://www.solarreviews.com/blog/how-many-solar-panels-do-i... https://www.eia.gov/tools/faqs/faq.php?id=97&t=3 https://www.eia.gov/tools/faqs/faq.php?id=97&t=3
dragonwriter 7y ago
> Not to dispute your later statement, but power outages aren’t a new thing in California. Massive public safety outages due to failure to safely maintain power infrastructure are, in fact, a new thing that started only after two years of massive fire liability close on the heels of a criminal conviction for a major gas explosion bankrupted the utility in question.

by SllX 7y ago

snagglegaggle 7y ago

The rub with this is PG&E was avoiding maintenance to pay out dividends. The situation was entirely preventable. Frankly it's scary how everyone is apologizing for the utility company's management.

AJ007 7y ago
They also had massive negative cashflow going back over a decade and paid for those dividends with lender’s money. The entire thing wasn’t sustainable. It isn’t necessarily fair to single out California because many other public utilities are in a similar situation, California just has added significant natural disaster risks. Regulated utilities have been considered a safe investment for so long that many shareholders and probably management have been asleep at the wheel for years. The regulatory aspect means there isn’t much those parties can do without state/voter approval. I’m hardly an expert in capital markets, so I’m not going to claim if PG&E did or didn’t pay dividends X would happen. I don’t know. What I do know is PG&E probably needed 3-4x the revenue they had, either by increased rates or borrowing which would lead to even greater rate increases eventually. I would say in general this is a good thing. California’s residents are now extremely incentivized to move to home solar + battery storage. California may even hit their renewable energy goals ahead of schedule.
mistrial9 7y ago
Modern PG&E have been repeatedly sued for raiding tree maintenance budgets, which they are legally required to use, going back to at least 1999. In the same era, executive bonuses have been consistently large. When Enron happened, during discovery, they found out that a large and carefully covered holding company had been pulling cash out of the tightly regulated main body, to buy similar power producing assets internationally, despite no charter to do so.
rayiner 7y ago
PG&E pays out dividends out of profits. The amount of profit it makes is strictly regulated by the government, based on the California Public Utility Commission’s rate-making. (What’s called an “authorized rate of return.”) PG&E would submit detailed proposals to the government about what it was planning to spend money on, and how much it would cost and what rates would have to be, and the government would approve those proposals and award PG&E a profit as some percentage of the investment: https://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/About_Us/Organization/Divisions/Policy_and_Planning/PPD_Work/PPD_Work_Products_(2014_forward)/PPD%20General%20Rate%20Case%20Manual.pdf https://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Co... So it is 100% false to say that “PG&E was avoiding maintenance to pay out dividends.” If PG&E didn’t spend money on safety and maintenance, then the rates, and PG&E’s profit, would go down. Conversely, if PG&E wanted to spend the money on safety, that wouldn’t cut into profits. It would submit a rate case to the CPUC with that proposed spending. CPUC would authorize raising rates, and award PG&E a larger profit (in absolute terms) because PG&E was spending more.
- hcurtiss 7y ago
  That's right. And without that return to investors, PG&E would not have the private capital it needs to operate.
- dragonwriter 7y ago
  > PG&E pays out dividends out of profits. The amount of profit it makes is strictly regulated by the government, based on the California Public Utility Commission’s rate-making. If you want to blame the state for PG&E management decisions, you are essentially saying that PG&E’s shareholder ownership and its own management are irrelevant, in which case they are at best a superfluous expense that should be avoided by making PG&E’s functions the domain of a publicly-operated utility.
  - rayiner 7y ago
    > If you want to blame the state for PG&E management decisions, you are essentially saying that PG&E’s shareholder ownership and its own management are irrelevant, in which case they are at best a superfluous expense that should be avoided by making PG&E’s functions the domain of a publicly-operated utility. Well the second part hardly follows from the first part. PG&E provides private capital for investments the State may not be willing or able to provide. PG&E provides the expertise in building and maintaining a power grid, and manages the day to day operations. For that they get a reasonable margin of profit. But the State sets prices, and decides what is a “prudent investment” that can be recovered from rate payers. As a result, it is the State that is responsible for the trade off between keeping retail rates low and investing in infrastructure upgrades such as enhanced fire safety. The State is also responsible for setting big picture policy goals, and has done so for example by imposing requirements with respect to purchasing renewable energy. (Which I think are a good thing by the way.) When the State is the one making those decisions, then yes, it should be held accountable. As to publicly operated utilities—they have the same problem, because their rates are regulated by agencies like the CPUC. Underinvestment in utility infrastructure is a chronic investment around the country, and there seems to be no difference between public and investor owned utilities in that regard. The problem is utility boards.

falcolas 7y ago

We need to be careful and not think of Solar as a silver bullet for this. Very few (likely less than 1%) of home solar installations can handle the load of the home for a full 24 hour cycle. To do so, they would need lots of batteries, expensive inverters and robust controlling equipment. From what I’ve read here on HN, a self-sufficient solar setup is expensive enough that it will cost more than being on the grid, even when amortized over the lifespan of the setup.

SllX 7y ago
Ah, nothing in my comment was intended to imply that solar was a silver bullet, but the way I phrased it was off the cuff because I didn’t want to go into the myriad of ways and emerging technologies that will allow people and businesses to take themselves off the grid at least temporarily. That’s the key, temporarily. You’re probably giving up AC, you’re probably going to want something like Tesla’s Powerwall. You’re probably not going to be running your washer and dryer during that time. You probably want any desktop computers you have on UPS. You probably want your appliances using as little electricity as possible even during normal operation. You probably don’t want to leave all the lights on. And I forget the name of this one, but you will need an extra piece of equipment beyond the panels and batteries to actually take your house off the grid. Personally I’m also excited for the possibility of miniature hydrogen generators as a store of power. > From what I’ve read here on HN, a self-sufficient solar setup is expensive enough that it will cost more than being on the grid, even when amortized over the lifespan of the setup. That’s true today and I will not dispute it, but expect prices to come down , and with PG&E’s capriciousness, the cost of doing nothing to rise, and installation opportunities to increase. If the utility is going to behave in a capricious manner, then people will respond over time. This can be on a personal level by trying to insulate their own homes from power failures as much as possible, or even at the municipal level where cities allow new utilities to come in and replace or compete with PG&E. We don’t need PG&E, we just need electricity. People are creative, we’ll find ways to make that happen, even with PG&E fighting tooth and nail against their own marginalization.
- falcolas 7y ago
  A Tesla Powerwall 2 can hold 13.5 kWh of energy. In the US, the lowest average home consumes around 17 kWh of electricity a day; the highest uses 42. This usage does not correlate with the hose usage, meaning that most of the power is consumed when the sun is low in the sky or during the night - putting the majority of the load on the Tesla Powerwall. You'd need at least two Powerwalls to avoid a significant change in lifestyle, plus ~5kW of solar cells to fill those batteries every day (not accounting for cloudy days). And a change in lifestyle may not even be practical, since most housing constructed in the last few decades was built with the assumption that AC and electric heating are available. https://www.solarreviews.com/blog/how-many-solar-panels-do-i-need-to-run-my-house https://www.solarreviews.com/blog/how-many-solar-panels-do-i... https://www.eia.gov/tools/faqs/faq.php?id=97&t=3 https://www.eia.gov/tools/faqs/faq.php?id=97&t=3

dragonwriter 7y ago

> Not to dispute your later statement, but power outages aren’t a new thing in California. Massive public safety outages due to failure to safely maintain power infrastructure are, in fact, a new thing that started only after two years of massive fire liability close on the heels of a criminal conviction for a major gas explosion bankrupted the utility in question.