Gov. Gavin Newsom’s first state of the state address announced a “strike team” that seeks a rapid and equitable resolution to PG&E’s self-induced bankruptcy. And since the governor has constantly emphasized strong representation on behalf of the customers effected by PG&E’s recklessness, it is well past time for the California Public Utilities Commission and the Legislature to consider a public ownership model of PG&E. To make that happen, they need to engage immediately with the California and national electric cooperatives to ensure a rapid and smooth transition.
PG&E has not operated in Californians’ best interest for decades. The well-documented recklessness has resulted in lost lives. The city of Paradise has been wiped off the map in a raging wildfire, displacing over 25,000 locals and causing a new wave of homelessness in nearby Chico. The culprit: PG&E’s underinvestment in wildfire mitigation.
This is not PG&E’s first go-round with negligent practices, which include:
• Faulty PG&E equipment, identified by Cal Fire, for starting 17 wildfires in 2017.
·• PG&E’s San Bruno pipeline debacle in 2010 that killed eight, injured dozens, and damaged more than 100 homes. (PG&E ignored previous calls for fixing the pipeline.)
• The groundwater contamination in Hinkley, made famous by Erin Brockovich. Ongoing studies find that the toxic effects of PG&E’s contamination continue to ripple beyond Hinkley.
Why hasn’t PG&E been proactive in all of these matters? As an investor-owned utility, its primary goal is to extract as much value as possible from all of us to send it to their shareholders, not to consider the welfare of those living at the intersection of wildfire fuel and outdated PG&E infrastructure. Its business model puts us in danger. And here’s the rub: PG&E has no qualms stacking the deck in its favor, as is evident in a massive $80 million settlement for PG&E’s backchannel deals with regulators. This was of course paid for by customers through increased energy bills.
Destroying entire communities is one thing. Diverting monies from California’s general fund is adding insult to injury. PG&E was bailed out in 2001 and again is claiming it may need more money from not only ratepayers, but also all residents of California to fund this embarrassing excess of greed.
It’s time for a new model. There are more than 800 electric cooperatives providing electricity at-cost (unlike PG&E, co-ops invest their profits back in to their infrastructure or give it back to the ratepayers). They are owned and governed by their ratepayer households, serving as effective workshops of democracy. These co-ops provide cutting-edge, smart grid services in far-flung North Dakota, and have coupled water and broadband services in the suburbs of Indianapolis. California’s own Plumas-Sierra electric co-op is bringing broadband to the rough terrain of its mountain residents.
PG&E, however, has actively sought to undermine competition and choice in the energy market, financing Proposition 16 in 2010 in an attempt to make it more difficult to form a locally owned utility. Despite using $45 million in ratepayer monies to fund this effort, the proposition was defeated. There are now more than 19 additional community-owned Community Choice Energy Agreements and an additional four cooperatives throughout California.
PG&E has attempted to undermine alternatives that could generate community economic development opportunities in community ownership of renewables, speed along the transition to the carbon-neutral future, enhance our water systems, and secure 100 percent broadband access across the state.
California policymakers could turn over ownership of PG&E infrastructure to CCAs, or work with the National Rural Electric Cooperative Association to put customers in control by bringing innovative utility cooperatives back into California public policy and economic development.
Newsom’s “strike team,” the Legislature and other policymakers should engage with the CPUC and the electric cooperative sector today to make this happen.
Keith Taylor is an extension professor at the University of California’s Cooperative Extension and the UC Davis Department of Community and Regional Development.
