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California Mayors Join Campaign to Buy Out PG&E
- methodiosmel 7y agoI'm amazed that anyone thinks that the state that passed all the policies that led to this disaster should but out the company so that it can fix the problems it helped create in the first place. Talk about failing up.
- throwaway_law 7y agoAlthough a tangent, its impossible to read this and not ask: Why aren't all the big tech companies generating revenue from customer data...customer owned?
- jrhurst 7y agoSame reason most businesses that are generating wealth from employees are not employee owned?
- jdc 7y agoSo initiative, organization, access to information and bargaining power
- chillacy 7y agoEmployees at least get paid, knowledge workers sign over their intellectual property in exchange for a salary. There is no concept of data ownership, but there could be something similar. Imagine companies having to license your data and pay you a stipend or the like.
- andromeduck 7y agoYour compensation is in the form of services rendered.
- throwaway_law 7y agoYes, that is the big tech talking point. However, the reality is big tech needs customer data, customer data does not need big tech.
- throwaway_law 7y agoGenerating wealth from employees, has nothing to do with generating wealth from customer data. If what is of value is customer data, customers can and should own and control the entity generating the monetary value from their own data.
- flatiron 7y agoI used to coned (nyc + west Chester) and they have a robust “you messed up and we are taking over plan”. How do they not the same? They used to dangle that over our heads anytime anything happened (our fault or not)
- dangjc 7y agoIt's kind of nice to sue PG&E for fires. If bought out, we'd only be suing ourselves, and then tax payers would be the ones on the hook for bailing out all the homeowners who wanted nice cabins in the woods.
- supercanuck 7y agoHow many people would want cabina in the woods without the amenities that public services provide
- dark_glass 7y agoDo you want a cabin in the woods, or a house? I think most people think very little amenities when thinking of a cabin in the woods, but maybe I am biased.
- flattone 7y agoA lot? "About 48 percent of the population inside micropolitan statistical areas lived in incorporated places, while about 52 percent lived in unincorporated areas" https://www.census.gov/population/www/documentation/twps0082/twps0082.html https://www.census.gov/population/www/documentation/twps0082... anecdotally the pursuit of not being around "public services" is a large part of the motivation. Personally as I'm leaving my 20s far behind I realize all the neon and jazz of the city did nothing but pacify a deeper realization that a more clear seeming experience of mind was on hold or somehow diluted...convenience can be very distracting. ... hopefully this makes some kind of sense. different kinds of folks/values. a lot of my peers live right in the city, which makes sense. convenience of stores / hospitals etc for raising a family. for me alone give me 50 acres and a 2 bdrm ranch home. and an invisible driveway :)
- sharkmerry 7y agoYou looked at a limited set of populations from 10k to 50k (micropolitan) is there a reason? in all of the US 62% live in incorporated areas. United States 281,423,231 175,062,893 62.2 106,360,338 37.8 https://www.census.gov/population/www/documentation/twps0082/Table_1.pdf https://www.census.gov/population/www/documentation/twps0082...
- s3r3nity 7y agoThis is a great opportunity to expose folks to different types of ownership structures for corporations - something that I think gets missed by most folks outside of (decent) MBA programs. As one anecdote/example: a close friend of mine is an actuary for a mutual insurance company, which is an ownership structure for an insurance firm such that the corporation is exclusively "owned" by the contract / policy holders. I remember having a fun debate over beers on why more companies / startups couldn't operate in that manner.
- RcouF1uZ4gsC 7y ago> I remember having a fun debate over beers on why more companies / startups couldn't operate in that manner. Because it would complicate having multi-billion dollar exits. The VC's don't care about creating sustainable businesses that create value for their users. They care about creating runaway hits that they can make billions of dollars on when they IPO.
- bigiain 7y agoWhich just moves the question to "why more companies / startups couldn't avoid the toxic VC influence on their business"...
- RcouF1uZ4gsC 7y agoBecause access to capital matters. If you are a non-VC funded business, you need to generate a profit. How do you compete when a VC-funded business comes in and starts selling a competing product at a loss?
- tw04 7y agoThat is in theory where the government steps in. It’s exactly why standard oil was broken up. Selling at a loss to try to create a monopoly completely breaks capitalism. I invite the folks downvoting to explain how capitalism works with a market monopoly. Since pointing out government exists to prevent just such a situation is apparently an unpopular opinion.
- ars 7y agoWhy do they need to buy it? Why can't they just pass some regulations on safety issues? Is there no public utility oversight board?
- kevingadd 7y agoThe current regulations aren't working, in part because PG&E is a private company that is free to prioritize profit and dividends over line maintenance. It seems like they've been doing that.
- jayd16 7y agoMaybe this is my uninformed opinion but I think the state should own the poles at least. Pole real estate is a natural monopoly that we subsidize anyway and it empowers existing entities to stifle new competition. It also makes sense to me that such a thing should be tied to city planning. In a perfect world power consumers and producers can just buy and sell into the marketplace as provided through the public lines. That's a long ways off because the grid just isn't that smart but maybe one day we'll get there.
- vkou 7y agoThe reason the state doesn't own the poles is that by allowing a private company to own them, the state doesn't have to finance their construction up-front. The downside is that the taxpayers are now forever on the hook of paying shareholder dividends for electricity. The best outcome in this whole situation is that PG&E is sued into bankruptcy and nationalized, leaving the shareholders with nothing. Owning a government-protected monopoly-utility that is bad at its job should not be a license to print money, regardless whether or not you ponied up some cash up front. Sometimes, you make bad investments.
- nerfhammer 7y agoThe CPUC (state regulators) already stipulate literally how much money PG&E is allowed to make, i.e. target profit margin. PG&E isn't state-owned but is largely not allowed to make its own decisions. Especially since the CPUC is not widely understood, this structure allows elected officials to present themselves as not being responsible for the tradeoffs PG&E has to make, even as the CPUC actually makes those decisions for them.
- Teknoman117 7y agoThis. Nearly all of the situations we've found ourselves in, be it power, internet, water, etc. are because we allow companies to have local monopolies over distribution systems, because we don't want to pay for the infrastructure up front, or take loans out as a towns. It's a lot easier as a politician to say that someone else will pay for something than to say that we as a municipality are going to issue 10 year bonds or something so that we can fund an infrastructure project. We then freak out 10 years down the line when we realize we're stuck with a bad system because we sold ourselves out.
- motohagiography 7y agoAn association of municipalities that invested like a pension fund would be a very interesting vehicle. They could buy infrastructure, but their mandate would be for productive assets. Public energy utilities in Canada just got loaded with off balance sheet debt and used as a general revenue slush fund for “infrastructure,” and built by unions on double time and a half, but it would be harder to get away with that today. A municipal wealth fund like a sovereign wealth fund would be worth exploring.
- blackflame 7y agoWhat about SDG&E? Why should the people of San Diego have to pay taxes for a public utility they don't benefit from?
- const_throwaway 7y agoIsn't San Diego populated by people who insist that others pay for public utilities that they do not benefit from predominantly?
- dang 7y agoWe've banned this account for breaking the site guidelines. Continuing to do this will get your main account banned as well, so please don't do this. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- kevingadd 7y agoWho says they'd have to? If you shift ownership to counties or cities serviced by PG&E, San Diego wouldn't have to pay taxes. Think more deeply about solutions to the problem.
- blackflame 7y agoI live in California bud, I know how the municipalities operate here (very poorly). I'm thinking much more deeply than you are. If I own the only powerlines in town, one of the rare true monopolies in America that will keep my family rich for generations, I'm not trading that for a one-time payoff.
- labster 7y agoIIRC SDG&E said that they'd want to sell their grid if PG&E and SCE were sold to the state. They may just decide this is a good time to sell out and transfer the risks to the public.
- blackflame 7y ago
- smsm42 7y agoI can't help thinking - what makes one suppose that California politicians would do a better job managing PG&E than whoever is doing it now who has been working under the aegis and in the full cooperation with the same California politicians as a monopoly sanctioned by those same politicians?
- kevingadd 7y agoWe have some successful non-private power companies in the state, so another power company modeled on them at least has the possibility of working out. The private approach has not worked for PG&E so far, we need to attempt fixes. If you have better ideas for how to fix PG&E you should contact your representatives or perhaps start a ballot initiative.
- smsm42 7y agoPolitician's fallacy: "we have to do something, this is something, so we have to do this". I don't see any argument so far why nationalizing PG&E is going to improve anything. It's already heavily regulated. Same bad decisions PG&E management took would be taken by State PG&E management for the same reasons. > If you have better ideas for how to fix PG&E you should contact your representatives or perhaps start a ballot initiative. This is another fallacy, for which I don't have a name. It goes like this: I assume my solution fixes the problem. In order to be allowed to poke holes in my solution, you must present another solution that you can prove fixes the problem, or your criticism is invalid.
- crimsonalucard 7y agoOh yeah this should solve all our problems. Once this happens they should hire the repair team that maintains the bart to work on our power lines. That team is the elite of the elite.
- kevingadd 7y agoBART is chronically underfunded and a chunk of its money is spent on expansions instead of maintenance and/or salaries for staff. Low pay for staff naturally leads to low-quality work and low payroll budget leads to lower headcounts (and higher workloads for individual staff). Really, BART has a lot in common with how PG&E executives are running things. The solution is to give it enough funding and ensure the money goes to the right place. We can't do that right now with a private power company and they aren't sending the money to the right place, but if set up correctly a regulator CAN do that. Whether they will is another question, but it probably won't be worse. Nobody is proposing handing PG&E over to BART. In the first place, with how much of BART's funding comes from customers it wouldn't be that different were it privatized.
- crimsonalucard 7y agoYou’re not wrong. I would think, based off of my observations of bart, that handing pg and e to the government can only at best create an entity similar to bart. Since you say it’s already similar, there’s really no point.
- algaeontoast 7y agoPeople should call this what it is, a bailout of PG&E. The only people who lose in this situation are the people of California. Granted, this is better than continuing to beat the dead horse that is PG&E for money. However, if this plan isn't accompanied by legitimate forest management and plans for controlled burns this would be like bailing out student loans without adjusting how the government guarantees student loans...
- kevingadd 7y agoThe necessary behavioral changes are not trivial to execute without a state/county takeover given that PG&E has still been prioritizing executive compensation, dividends, and profit. We need to at least start with measures to address that, even if we also need to do other things. Are you arguing that we ONLY need to do those other things, or just that we're doomed?
- billions 7y agoVenezuela nationalized sugar factories with similar reasoning with little success: https://www.latimes.com/world/mexico-americas/la-fg-venezuela-imports-20160809-snap-story.html https://www.latimes.com/world/mexico-americas/la-fg-venezuel...
- billions 7y agoLots of downvotes - can HN offer any counter arguments? Surely you guys use logic to build circuits and algorithms, not down votes.
- kevingadd 7y agoWhat makes sugar companies similar to power companies? You haven't described particular regulatory or administrative policies that hurt Venezuela and will be applied here. Every thing isn't equivalent to every other thing. Why is it automatically the case that (for example) administrative policies set in place by government regulators in Venezuela couldn't already be set in place by PG&E's private administrators? You can't just respond to every federal agency with "just like sugar companies in Venezuela". It's absurd.
- billions 7y agoWhich nationalized entity would you like to emulate? Please provide one nationalized company that is an example of quality and value we can emulate. Would you like your power to operate like the DMV?
- flukus 7y agoApart from the schools, the roads, the post office, the hospitals? No I can't think of many. Electricity and banking would have been on that list before they were privatized though. As for Venezuela, they've also been subject to US sanctions when the privatize something, so cause and effect are hard to determine.
- 7y ago
- Waterluvian 7y agoPlease tell me that there will be no golden parachutes for any of the executives. From the cheap seats it sure looks like they squeezed every cent they could out of the utility rather than ensuring it had a future. There may even be a breach of fiduciary duty, given how disinterested in a future for the company they seemed by doing so.
- subsaharancoder 7y agoI'm going to use the DMV as a benchmark of the ability of the state to get anything done, and then ask everyone to imagine PG&E being run like the DMV. Bureaucracies only succeed in optimizing additional red tape, and it baffles me that CA residents are cheering on this takeover!! *Apologies to anyone who works at the DMV
- deleted 7y ago[deleted]
- taurath 7y agoTry the military. Or the post office. Or one of the hundreds of municipal power companies, or internet service providers.
- subsaharancoder 7y agoThe post office is brutally slow!! I've limited my interactions to submitting paper based tax returns when I've done amendments.
- kevingadd 7y agoThe post office is chronically underfunded as a result of hostile federal regulation (mostly put in place by people who want to privatize it and prevent rural customers from getting the low-cost service mandated by law). So yeah, the post office is a great example: Of what happens when critical services are underfunded. The post office is also not a traditional federal agency - a directly state-operated power company would have a very different administrative and funding structure.
- adrr 7y agoWhat’s wrong with the dmv. I just got my real id, made an appointment online, showed up and was out in 15 minutes. Everything I need is automated. My car needs smog so I send in payment and go smog my car. Tabs come in the mail the next week.
- shadykiller 7y agoI live in Santa Clara city and my utilities except gas are provided by the city run Silicon Valley Power. It's cheaper than PG & E and i've had no reliability issues. I guess even a government run utility would perform far better than PG & E since the bar is too low.
- kevingadd 7y agoEven if a local utility company is privatized that doesn't automatically make it impossible for it to run well. We have many examples of both local privatized and public power companies, so we know that either system can work well if managed correctly. Given that PG&E isn't running properly as a privatized one and we have examples for how the government can do it right, we might as well take over and imitate those successes.
- dheera 7y agoI'd personally have more faith in a privatized company or a government entity (rather than a public company) because the lack of ability to freely trade shares means shareholders are more aligned with the long-term mission of the company. With public companies, the people who own the company don't even live here and they only own it to make a quick buck. They'll live in an armchair in Wall Street and short sell in a heartbeat to make quick bucks on the downturn, not realizing that their trigger-happy, short-selling behavior is actually hurting California residents who depend on the company to be funded at the worst of times to fix problems and upgrade infrastructure.
- icebraining 7y agoShort-selling doesn't take away money from the company. Except for startups looking to fund their current growth by issuing new stock, a dip in the stock price shouldn't affect their operations at all.
- dehrmann 7y ago> we might as well take over and imitate those successes Except PG&E is 100x larger than SVP and has completely different operations.
- billions 7y agoIn computer science terms this is increasing technical debt. Your app is fundamentally broken. Instead of addressing the primary issue, we try to patch via a law suit. The patch introduces 2 new bugs: bankruptcy and blackouts. Solution: NEW PATCH!
- sp527 7y ago"Technical debt" is not a computer science term. And, the most canonically tech-world facet of your hot take is complaining about something and then failing to recommend a solution.
- lucasmullens 7y agoCan you explain it in regular terms? I don't really follow what you're going for here. Buying out PG&E sounds like a bit more than a patch.
- billions 7y agoPG&E has government mandated monopoly in these cities. "Buying out PG&E" means let mismanaged cities like San Francisco handle electricity like they handle the homelessness, transportation, sanitation and housing.
- kevingadd 7y agoSo you're saying it's impossible to fix bugs with patches? Not that the content of the patches is what matters? If the bankruptcy and blackouts don't work, we need a new approach to the bug fixes. De-privatizing the power company is one thing that might work, given that it's a technique that works for other areas' power.
- tanilama 7y agoWhat do you suggest them? Change the law? How is that not another patch? I think this is proposal is definitely more than a patch though, it is pretty fundamental.
- billions 7y ago
- newfangle 7y agoI dont want to own PGE though
- Aaronstotle 7y agoI think the extended blackouts in the Bay Area make a compelling case for cities to create micro-grids with Solar/batteries so they're not at the complete mercy of PG&E. Also, California needs to start implementing controlled burns more often to compensate for the poor forest management from the last 100 years.
- Proven 7y agoThose socialists are out of control... What other results are to be expected in addition to shittier services and higher prices?
- mfer 7y agoAren’t there laws preventing fire hazard brush around electrical equipment from being cleaned up? They need a legal way to handle those situations no matter who the owner is.
- TheChaplain 7y agoI am curious if a power company like PG&E could be bought out and made into a cooperative like a credit union, where every member have a part. Would it be better or worse?
- vonmoltke 7y agoSure. Structures like that already exist for rural utilities in many places. The question is, would one that large function effectively?
- appleiigs 7y agoI have experience with municipally owned utilities. They are the worst run organizations. I really think a bunch of mayors will do a lot worse than bankruptcy. The mayors end up hiring an expensive executive - who still negotiates a golden parachute. The mayors look up to exec because of the exec's pedigree or career experience and don't have the guts or knowledge to fire him when things are going bad. Tax payers often don't know how bad things are because there is no stock price to reflect it, so they keep paying and paying. A bottomless pit.
- kinghajj 7y agoThat's why we should adopt the customer-owned utility model used for SMUD in Sacramento county.
- neonate 7y agohttp://archive.is/zl4v3 http://archive.is/zl4v3
- WalterBright 7y agoThere's no particular reason a power generation plant must be the same company as the one that operates the distribution lines.