In an effort to fundamentally reform PG&E, this legislation will turn it into a public utility focused on safety, reliability, and affordability instead of profits
Monday, Senator Scott Wiener (D-San Francisco) introduced legislation which would turn PG&E into a publicly owned utility, the Northern California Energy Utility District. The legislation will fundamentally and structurally reform PG&E, whose faulty power lines have caused deadly wildfires, killing hundreds, incinerating thousands of homes, and destroying an entire community.
In response, PG&E triggered mass blackouts, turning off the lights to millions, harming families and businesses, undermining public safety, and jeopardizing the most vulnerable residents of our communities.
“PG&E is a failed utility with a track record of prioritizing profits over safety. The ham-handed, damaging mass blackouts it levied last year only serve to underscore how broken PG&E is,” Senator Wiener said in a statement.
He added, “It’s time for a new start: a utility focused not on Wall Street and shareholder profits, but rather on safety, reliability, affordability, and ratepayers. Public ownership of PG&E will allow California to hit the refresh button and create a utility focused on the public interest.”
Senator Wiener’s new legislation comes on the heels of the Senate passing SB 378, his legislation to hold PG&E and other utilities accountable for the damage caused by mass blackouts.
PG&E’s track record has shown that its basic business model is no longer viable. PG&E has focused on profits for shareholders at the same time it has de-prioritized safety investments. As a result, PG&E’s infrastructure has deteriorated and become unsafe. In addition, PG&E’s business model — in which the company makes more money as it expands its transmission lines in to wildfire-prone areas — creates an incentive to expand endlessly and thus become even less able to take care of its own infrastructure.
Converting PG&E into a publicly owned utility will focus the company away from profits and Wall Street and toward public safety, reliability, and affordability of rates. Publicly owned utilities have a strong track record of operating in the public interest.
“In San Francisco, we are continuing our work to acquire PG&E assets so we can deliver clean, renewable energy for all of our residents,” said San Francisco Mayor London Breed. “Senator Wiener has been a strong ally in our local efforts and I support his proposal to have California take over all of PG&E, as his bill will protect the rights of local jurisdictions to create a publicly owned utility. We need aggressive action if we are going for meet our climate goals and change how we safely deliver power in our state.”
Senator Wiener’s legislation requires the State Power Authority, led by gubernatorial appointees, to initiate the purchase of all of PG&E’s shares. Once PG&E has been acquired, ownership will transition to a publicly owned utility, the Northern California Energy Utility District. Under the District will be a public benefit corporation called Northern California Energy Services, which will operate the utility on a day-to-day basis.
Jan Pepper, CEO of Peninsula Clean Energy, a Community Choice Aggregator (CCA) said: “As the energy supplier for San Mateo County, we at Peninsula Clean Energy want to see reduced energy delivery costs for our customers and a laser focus on safety.”
She added, “This is our opportunity to achieve these goals by transforming PG&E in to a not-for-profit customer owned organization. By increasing transparency, lowering PG&E’s cost of capital and removing their need to put shareholders before their customers, we can reorient PG&E to deliver safe and reliable service.”
“As a grape grower with a family winery, intentional blackouts during fire season inevitably coincide with harvest and the peak of tourism in wine country,” said Joy Sterling, CEO of Iron Horse Yinyards who is a member of the State Food and Agricultural committee. “The loss of business is an extremely costly problem, and the impact of the shut-downs on our employees is also terribly concerning. While blackouts can be a useful public safety tool, it’s clear that PG&E would rather avoid liability for its faulty equipment and let businesses suffer instead of fixing their grid.”
She added, “As Chair of the Democratic Party Rural Caucus, I appreciate that this bill would let local governments and tribes, including small rural governments, acquire PG&E’s assets and form their own local utilities. Our cities have the greatest concentration of assets, and too often in re-organizations, rural areas are left with no left assets.”
According to Richard Skaff, the Executive Director of Designing Accessible Communities, a nonprofit that works to assure that the built environment is accessible for everyone, including individuals with disabilities, “PG&E has been given permission to turn off our electricity because the money we paid to that private, for-profit electric utility went to their executives as bonuses instead of being used to upgrade their grid.”
Mr. Skaff added, “PG&E, giving virtually no notice, turned power off for thousands, causing major issues for those relying on electricity-powered life-supporting medical equipment. And what did they do for those whose lives depend on medical equipment that will only operate with consistent electricity? They left a door hanger on the front door letting you know they were there!”
Cities are currently able to create municipal utility districts, and this legislation will not take away that ability. San Francisco, which has expressed interest in creating its own local utility, will be free to continue on its path toward municipalization, along with any other cities. Additionally, under this legislation, local governments and federally recognized Native American tribes can, around the time of the transition, acquire PG&E assets in order to form locally owned public utilities.
This legislation will also fully protect PG&E’s workers. PG&E’s entire workforce will be transitioned to the new entity, and their collective bargaining agreements, wages, benefits, and retirement benefits will remain intact.