Hacker News Reader

Comment by tkel | Hacker News Reader

The problems aren't unique to PG&E. Any company for which profit is the primary motive, they will seek to minimize costs. And safety is very expensive. Which is why PG&E has been directly implicated in the deaths of over 120 people and made homeless tens of thousands of people only in the last 2 years. I needn't get into why open markets aren't viable for many industries e.g. roads, utilities, water treatment.

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.

View on HN

>they will seek to minimize costs. And safety is very expensive

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.

In the UK a lot of infrastructure (e.g. energy, fixed-line telecommunications, railways) is run by for-profit companies that are heavily regulated by the government, but the service to consumers is provided by separate for-proft companies (sometimes owned by the same group who controls the infrastructure) which compete on price and the service they provide.

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.

> In the UK a lot of infrastructure (e.g. energy, fixed-line telecommunications, railways) is run by for-profit companies that are heavily regulated by the government

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.

>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.

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.

> Eliminate the profit motive, and the service will be cheaper, safer, and directly accountable to the people.

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.

Neither law nor business operations work like that. For-profit just means owner has the right to reap profits, not that business has sole duty of profit. Non-profit owners do not have the right to reap profits, not that non-profit cannot profit.

Oddly, the US airline industry is regulated, safe, and makes a good profit. These things are not at odds with each other.

Reply on news.ycombinator.com