4 ms·

My concern here is that every fire somehow becomes a cash cow for pg&e. It’s not clear, to me at least, aside from this article which may be premature given the

My concern here is that every fire somehow becomes a cash cow for pg&e. It’s not clear, to me at least, aside from this article which may be premature given the arson suspect, that burying lines will solve the fire problem. So PG&E gets a ton of money, somewhat undeservedly IMO, and the state will still have fires but less resources to fight them with. I hope I’m wrong. It just seems like the worse pg&e does, the more funding they get. Perverse incentives are a real issue in economics.

notatoad 5y ago
Yeah, if it's not a power line then something else will start the fires. The problem isn't the initial spark, it's the hundreds of square miles of tinder-dry wildland. Not sure it's a perverse incentive, but it's probably not a productive use of money. But it's human nature to look for the problems that we are capable of solving, and we know how to bury powerlines. We don't know how to reverse the effects of climate change.
jdavis703 5y ago
I don’t believe the PUC will allow PG&E to have a guaranteed rate of return on undergrounding. My understanding is that ratepayers are the ones who are going to be funding this project, not the shareholders. So yeah PG&E gets to avoid liability and also sell more electricity (there’d be no more PSPS events). But they won’t be able to charge higher transmission rates beyond the cost of undergrounding.
- dehrmann 5y ago
  > My understanding is that ratepayers are the ones who are going to be funding this project, not the shareholders. I think that's the deal, though. Utility investors buy utilities knowing their rates are regulated and there's limited growth in exchange for stability. When the cost of providing electric changes, whether it's because wholesale prices increase or a new cost emerges (burying power lines), ratepayers are on the hook. The key is allocating the costs correctly. Burying major transmission lines (if this is even needed) should be shared, but local lines need to be paid for by local communities. Owning a cabin is fine, I just have no interest in subsidizing its power because it's in a fire risk area.
- lazide 5y ago
  It’s a cost plus model.

notatoad 5y ago

Yeah, if it's not a power line then something else will start the fires. The problem isn't the initial spark, it's the hundreds of square miles of tinder-dry wildland. Not sure it's a perverse incentive, but it's probably not a productive use of money. But it's human nature to look for the problems that we are capable of solving, and we know how to bury powerlines. We don't know how to reverse the effects of climate change.

jdavis703 5y ago

I don’t believe the PUC will allow PG&E to have a guaranteed rate of return on undergrounding. My understanding is that ratepayers are the ones who are going to be funding this project, not the shareholders. So yeah PG&E gets to avoid liability and also sell more electricity (there’d be no more PSPS events). But they won’t be able to charge higher transmission rates beyond the cost of undergrounding.

dehrmann 5y ago
> My understanding is that ratepayers are the ones who are going to be funding this project, not the shareholders. I think that's the deal, though. Utility investors buy utilities knowing their rates are regulated and there's limited growth in exchange for stability. When the cost of providing electric changes, whether it's because wholesale prices increase or a new cost emerges (burying power lines), ratepayers are on the hook. The key is allocating the costs correctly. Burying major transmission lines (if this is even needed) should be shared, but local lines need to be paid for by local communities. Owning a cabin is fine, I just have no interest in subsidizing its power because it's in a fire risk area.
lazide 5y ago
It’s a cost plus model.