On Monday, Pacific Gas and Electric announced its intent to file for Chapter 11 bankruptcy protection, proving what many Californians have known for years—PG&E is not too big to fail; it’s failing already.
November’s Camp Fire is only the most recent in a series of destructive events, such as 2017’s fires in the North Bay and the San Bruno pipeline explosion of 2010. The cost of this most recent disaster is estimated to reach $30 billion, twenty times more than PG&E’s currently available assets. In response, the company proposes forcing already overcharged consumers to foot the bill for these failures through increased rates, a policy that in the past has been supported by many Democratic Party legislators.
The California National Party instead recognizes that PG&E is not too big to fail, but too big to responsibly exist. As has occurred many times in the past, such as with AT&T, a large corporation with a de facto government supported monopoly must be broken up into regional and local entities for the good of the consumer.
PG&E’s plummeting stock price—having dropped in the last sixteen months from nearly $70 per share to below $7 as of this writing—has greatly simplified the California government’s ability to gain control of the company through simple purchase. If taxpayers are expected to cover the cost of a government bailout, such money should instead be used to protect the physical safety and financial security of Californians. The California government could initially transfer PG&E to state control, and in the future devolve many functions to counties and regions. In the meantime, California should use this period to upgrade the system, including the burying of electrical lines wherever possible.
The high voltage transmission grid, which spans across California and beyond, would remain a publicly administered utility, much as the major freeways and transportation lines are administered under Caltrans. Power generation itself and the lower voltage distribution grid would be transferred to the local level (county or regional, depending on circumstances). These could then determine, based on their specific needs and desires, whether to institute a public utility, such as SMUD in Sacramento, or one that is investor-owned, with oversight by the California Public Utilities Commission. Such restructuring would have to take place with input from concerned parties, such as employees.
While such changes will have complications and come with financial expense, the costs in terms of lives and health—not just in directly affected zones but throughout California—along with property damage, rebuilding costs covered with taxpayer money, and other factors, make it necessary to recognize that proper investment spending now is required for the good of all Californians, even those outside PG&E’s boundaries. For years, representatives and political organizations have received funding and contributions from both PG&E and its labor unions. Such officials are clearly already involved parties. It is time that California’s government recognize that its responsibility is not protecting PG&E’s shareholders, but California’s people.
Chapter Coordinator, Northern California
Image: Joe Mabel, Pacific Gas & Electric Co. General Office Building (San Francisco) 02, CC BY-SA 3.0