3 ms·

All this to say, it’s the governments fault for allowing PG&E to have the incentives it does. And I’d agree with you to an extent, but the solution being privat

All this to say, it’s the governments fault for allowing PG&E to have the incentives it does. And I’d agree with you to an extent, but the solution being privatizing it and deregulating the power system is... maybe not the best. Corporations almost always have the same incentive structure as what you’re saying the CPUC has, short term profits over long term. The only difference is that rates would be higher along with PG&Es profits, since nobody would go in and build a second power grid and they’d have a de facto monopoly.

rayiner 7y ago
I’m not suggesting we deregulate the transmission grid. My point is that PG&E is heavily regulated, and the government should take responsibility for the consequences of its regulatory choices. For decades, PG&E submitted detailed rate cases to the CPUC saying; “here is what we plan to invest in, here is how much it will cost, and here is what rates will have to be to pay for it.” Given that PG&E would make more money by investing in safety upgrades, the only reason they wouldn’t have done it is because the CPUC pressured them to forgo such investments to keep rates low. (That’s a common concern for rate regulated monopolies: they have an incentive to “gold plate” the network because they make more money the more they spend.) The PG&E model works well in the rest of the world. It’s how the electric grid works in the UK, and most of Germany. In France and Spain the electric grid is operated by a for profit corporation, albeit one where the government is a shareholder (majority stake in France, minority stake in Spain). Indeed, many people espouse using the same model for broadband in the US. That proven model is not working in California because the politics is completely dysfunctional. There is zero accountability.

3 ms·

All this to say, it’s the governments fault for allowing PG&E to have the incentives it does. And I’d agree with you to an extent, but the solution being privat

by taurath 7y ago

rayiner 7y ago
I’m not suggesting we deregulate the transmission grid. My point is that PG&E is heavily regulated, and the government should take responsibility for the consequences of its regulatory choices. For decades, PG&E submitted detailed rate cases to the CPUC saying; “here is what we plan to invest in, here is how much it will cost, and here is what rates will have to be to pay for it.” Given that PG&E would make more money by investing in safety upgrades, the only reason they wouldn’t have done it is because the CPUC pressured them to forgo such investments to keep rates low. (That’s a common concern for rate regulated monopolies: they have an incentive to “gold plate” the network because they make more money the more they spend.) The PG&E model works well in the rest of the world. It’s how the electric grid works in the UK, and most of Germany. In France and Spain the electric grid is operated by a for profit corporation, albeit one where the government is a shareholder (majority stake in France, minority stake in Spain). Indeed, many people espouse using the same model for broadband in the US. That proven model is not working in California because the politics is completely dysfunctional. There is zero accountability.