PG&E falsified gas pipeline records for years after deadly explosion
latimes.com
latimes.com
If someone is a CEO, and they care about society and about doing a good job, this will almost always mean passing up opportunities to maximise company profits. For example, in this case a diligent CEO would ensure that the company is paying for the maintenance of its equipment.
However, this isn't necessary to maintain revenue given the monopoly position that the company is in. And thus a company board looking to maximise its return on investment may choose to replace this CEO with someone who will prioritise profit over things like societal good and doing a good job.
It is these shareholders that our legal/economic system gives power to. And a majority of shareholders are amoral entities like pension funds who are not concerned with ethics, but are simply looking to maximise profit.
Thus our society also takes on these values.
The person who signed the falsified reports is likely in the second-lowest level of employees (the lowest level of management), who was ordered by the guy above him, who was pressured by the guy above him, who was incentivized by the guy above him, who was winked at by the guy above him, who concocted the scheme to please the guy above him, etc. Nobody really wants to see some low level employee's life ruined and his kids starve simply for being the dummy who accepted a promotion to sign the reports.
You’re right that we don’t want the guys in the trucks getting busted for fraud, but that shouldn’t mean that we allow the upper management to get off.
If they knowingly participated in it, why not? In the military, where subordination is far stricter, there's still the concept of unlawful orders, and subordinates are expected to refuse to carry out such orders - and if they do not, they can be held accountable for that.
Why aren’t the infrastructure parts taken over by the state (or managed by an accountable non-profit body), and competition encouraged for the customer facing parts? Or maybe just do that via the state too, if there’s little commercial interest?
Whether or not monopolies would have actually developed had the government stayed out of it is something we may never know. At the moment we have the worst of both worlds -- monopolies that gained their position because the government wanted them to, not because they emerged as natural monopolies by beating competitors. It's impossible to threaten their business because you need to get government permission to compete with them and you probably won't get it. They have no reason to care if their customers are happy.
If the government had built the power lines (or allowed private companies to build them in exchange for selling access to others), and then allowed any number of private companies to generate power and deliver it over those lines, competing for customers on price and quality of service, I think we would be better off. If the natural monopoly theory turned out to be true then action could be taken at that time.
I live in one of the few California cities that are allowed to form their own power companies and I'm definitely better off than my friends who have to use PG&E -- I get the same or better service for a lower price.
Therefore Americans tend to prefer that private companies are allowed operate a business for profit will produce a more desirable product/service for the market. When they fail a correction in the market should occur and the business should fail. A competitor should be allowed to fill the void.
Yes, Enron was headquartered in Houston, but:
+ CEO Ken Lay was from Missouri;
+ Later CEO Jeff Skilling grew up in New Jersey and Illinois, although he did go to college at SMU in Dallas and spent most of his career in Houston;
+ CFO Andy Fastow grew up in New Jersey.
Because the political alignment which might ideologically support that is fairly new in California, and there is significant resistance to experimentation in how electricity is managed because the last time that was done (albeit, in a deregulatory direction), it combined with federal regulatory mismanagement to create the worst energy crisis in the State's history.
Utilities are too damn important for the bottom line of humanity to allow things to continue playing out in the same sad, pathetic, greedy fashion. The point of having public utilities is to enable a high standard standard of living so hopefully the really important problems can be solved before it's too late. PG&E seems to think the primary goal is for the utility company to be politically powerful and make cush millions for the execs. Sickening.
It's a free country. If you are a shareholder, or affected by their gross negligence, feel free to sue them to force a staff turnover.
On the plus side, you can now easily get solar + batteries + inverters as an alternative :). Costs more, though.
Well said.
As time goes on, I feel more and more like my intended purpose is just to be grist for the mill of American capitalism.
Until there is competition people will have no alternative but to pay PG&E for power every month, so PG&E has no incentive to improve. If they get fined they'll just make that money back from their captive customers.
Eliminate the profit motive, and the service will be cheaper, safer, and directly accountable to the people. The utility can operate at cost and not jack up rates to pay shareholders or an $8M CEO salary. If there are any profits, they will be funneled directly back into the utility.
If that were true, we wouldn't have private airlines because planes would be falling out of the sky every day and nobody would fly.
Increase fines for negligence or make sure they can be sued (IIRC California makes it difficult to sue PGE) if you want to fix the problem. Don't do something as stupid as making it government run so it either becomes extremely expensive, extremely unstable, and/or a tax burden for the state.
>Eliminate the profit motive, and the service will be cheaper, safer, and directly accountable to the people.
Eliminate the profit motive and nobody will be incentivized to improve anything. This will likely make it much more expensive in the long term. The military has no profit motive either and they spend money like it grows on trees.
From a consumer point of view this is good, as you have a choice over which provider you use. On the other hand the actual service you get is going to be the same from either provider, taking internet as an example, if you use the common infrastructure the speed you can get will be the same from all providers, and the only difference is in price and artificial limitations like data usage. Maybe electricity is a better example, as the electrons you receive will be exactly the same no matter which provider you use.
Although the infrastructure is run for-profit, there is only so much than can be done on its own. The government regulations also limit upgrades, as they favour spending on underserved areas. This means even if you live in the most remote part of the UK you can probably get broadband internet (>1mbit), but in major cities you are getting much slower speeds than what other parts of Europe can provide (often no more than 70mbit).
Most of the infrastructure was inherited when it was privatised 20-30 years ago, so all they have really done is run the infrastructure rather than build it out. A good comparison is mobile telephone infrastructure, which in the UK is exclusively owned, built and run by for-profit companies with minimal government oversight.
With the exception of HS1/Channel Tunnel, the vast majority of the UK's fixed rail infrastructure (stations, tracks, land, etc) is publicly owned.
The train operating companies (TOCs) are, with some exceptions, privately owned. But because of the way they are franchised and regulated there is little competition between them, so it's quite different to the electricity or internet markets.
> taking internet as an example, if you use the common infrastructure the speed you can get will be the same from all providers
Not necessarily. Although each provider may share a common "last mile" infrastructure, ie the lines that run to your house, they must each arrange their own equipment and backhaul in the local exchange where that line terminates. Not all backhauls are equal and some providers perform better than others, especially at peak times.
> Maybe electricity is a better example, as the electrons you receive will be exactly the same no matter which provider you use.
Every unit of electricity you use has to be generated somewhere - and not all sources are equal. As a consumer, I might place a premium on low-carbon electricity, and choose a provider which promises to purchase only from wind turbines and other low-carbon sources.
The economics of airlines and monopoly energy companies are completely different. Flights are subject to intense economic pressure, the airline industry has very thin margins of profit.
You can avoid an unsafe plane but you can't avoid an unsafe statewide power company.
If that is universally the case, and there are no downsides, it would logically follow that everything needs to be nationalized.
Societies that tried that didn't fare well, though. So, clearly, it's not that simple. It may well be the case that this particular company would be better off as a non-profit, but the explanation can't be as simple as "safety" - practically everything has some safety aspect to it.
Admittedly, I don't know PG&E's history, but as a utility company that offers natural gas and electricity, I know many would call it a natural monopoly.
As such, how does competition work in a natural monopoly?
Certain things like roadways are owned by the state because it's impossible to profit from them. Perhaps the safe delivery of electricity and natural gas to consumers should be managed by the state.
And if anything PG&E and potential competitors would compete on the production of electricity / natural gas, which the state buys and safely delivers to the people.
And, to be honest, any cause less than ~1000 deaths per year (and PGE is about ~20) would barely even register as a blip on the top 50 causes of death in the state. It's a tragedy, but it's hardly the greatest threat to safety and health.
The fact that we have a number of public power agencies in the non-PG&E parts of California and it is different there. It's not a hypothetical.
The "value of a statistical life" has less to do with making thing whole in terms of not caring about deaths than it has to do with efficiently allocating safety spending.
Then you have percentage of the yearly wildfires attributable to PG&E. So some percentage of let's say a couple billion in fire fighting per year, and maybe 10-50 billion in property lost.
Anyway, the point is that it isn't a slippery slope discussion, and it isn't impossible to come up with an approximate number.
And yet roads continue to be built and the CDC continues to function...
Also, keep in mind that the government doesn't actually build roads. They pay other companies to do it.
Fixed that for you.
I’m going to delete this comment... No need to reply.