PG&E Would Be Bought And Converted To Public-Owned Utility Under California Mayor’s Plan

PG&E Would Be Bought And Converted To Public-Owned Utility Under California Mayor’s Plan

San Jose, California is proposing that PG&E should be bought and converted into the country’s largest customer-owned utility amid mass-blackouts and heightened tempers over their role in the state’s wildfires, according to the Wall Street Journal

San Jose is the third largest city in California and PG&E’s largest customer.

According to the Journal, Mayor Sam Liccardo hopes in the coming weeks to convince other cities to join the buyout proposal, which would change the utility’s investor-owned status to a nonprofit electric-and-gas cooperative. 

The buyout proposal amounts to a revolt by some of PG&E’s roughly 16 million customers as the company struggles to keep the lights on and provide basic services while preventing its aging electric equipment from sparking wildfires.

San Jose Mayor Sam Liccardo said in an interview that the time has come for the people dependent on PG&E for essential services to propose a new direction. A cooperative, he said, would create a utility better able to meet customers’ needs because it would be owned by customers—and answerable to them. –Wall Street Journal

In other words, Liccardo thinks a coalition of California officials can do it better. 

This is a crisis begging for a better solution than what PG&E customers see being considered today,” Liccardo told the Journal, saying of the recent Venezuela-tier power shut-offs, “I’ve seen better organized riots.” 

Faced with more than $30 billion in wildfire-related liabilities, PG&E sought chapter 11 bankruptcy protection in January. The will likely oppose the proposal as they explore how to emerge from bankruptcy, compensate fire victims, and modernize their infrastructure (for which they passed along a giant $2 billion rate hike to their customers last December). 

California officials are running out of patience with PG&E after the company shut off power to roughly two million Californians in 34 counties earlier this month to ensure that its power lines, transformers and fuses didn’t ignite fires that could spread quickly amid warnings of high winds. PG&E warned Monday that winds could trigger another round of shut-offs for parts of 17 counties later this week.

PG&E may have accidentally galvanized support for the public buyout proposal last week when Chief Executive Bill Johnson told state regulators that the utility may need to rely on power shut-offs for up to 10 years. That is a horrifying prospect for public officials, who note that the blackouts affect public safety and the delivery of other basic services such as clean water. –Wall Street Journal

“We need to align the financial interest with the public interest,” said Liccardo, adding “We hope there will be recognition that this structure better addresses the public need and we’re looking to start the drumbeat to enable all of us to march together.”

Tyler Durden
Mon, 10/21/2019 – 19:25