It's kind of nice to sue PG&E for fires. If bought out, we'd only be suing ourselves, and then tax payers would be the ones on the hook for bailing out all the homeowners who wanted nice cabins in the woods.
What I don't understand is why we'd want the regulators that let PG&E get so bad take over the place.
If the former, I'd like to know how you came to that conclusion. If the later, that doesn't mean the regulators are worse.
I'm not saying I'm pro-regulator or think PG&E should be bought out. I just am perplexed by your comment.
If the regulators taking over somehow makes it worse, we can always privatize it again. There are other private power companies in the state that will remain private.
More lives, more money, more vegetation, more houses, more resources.
If you're going to replace something, it's usually a good idea to have some reason to believe what you're replacing it with will be better.
I'm not advocating for PG&E, I don't know enough to have an informed opinion. But currently I don't see any obvious solution to the situation.
Are any of those examples in California?
You can see a partial list of public-owned utility companies in CA here: https://ww2.energy.ca.gov/almanac/electricity_data/utilities...
There are 365 days in a typical year. That's the theoretical limit for how many days Californians can go without power. That should give you an idea how much you have to lose from a power availability aspect. On top of that, there are millions upon millions of acres of unburnt land in California. A even more mismanaged PG&E could result in many more fires than we've seen thus far.
Basically, there is a LOT you can still lose.
I agree there is a lot to lose. But I think you're being a little aggressive with your negativity.
Because unlike a privately-owned and publicly-regulated utility, it would be subject to undivided public accountability.
Does that system actually align incentives so that the utility is motivated to preempt problems like these?
No, and that would actually defeat undivided accountability for outcomes.
> Does that system actually align incentives so that the utility is motivated to preempt problems like these?
Do politicians like to be blamed for burning down the state with no one else to point to?
PG&E could easily fix the lines and pass the price onto the consumers. If anything, if their profits are limited to 10%, you'd think there would exist a perverse cost+ incentive on PG&E's part.
My understanding is that they could not, yes, because state regulators exercise line-by-line control over PG&E's budgets, including how much money will be distributed as dividends and how much money will be spent on maintenance.
Keep in mind that even if PG&E is doing their best to keep costs low, the cost of wildfires is being passed on to the consumer anyway (in some cases the cost is being passed on as dead humans instead of higher electrical costs). Is it better for PG&E to be able to have a profit margin of 25%, or for their lines to not cause wildfires? What about a low profit margin stops them from maintaining lines?
If the state and/or counties are operating the electrical company, profit need no longer be an issue. If they aren't making enough money to cover maintenance cost, that can come out of tax dollars or state-issued bonds just like road maintenance does. It's not as if electrical infrastructure isn't important. Taxpayers may not like higher taxes, but they also don't like having their power cut off or their houses destroyed.
[1] https://www.macrotrends.net/stocks/charts/PCG/pacific-gas-el...
"The CPUC meets publicly[15] to carry out the business of the agency, which may include the adoption of utility rate changes, rules on safety and service standards, implementation of conservation programs, investigation into unlawful or anticompetitive practices by regulated utilities and intervention into federal proceedings which affect California ratepayers."[0]
It is also their mission to assure access to reliable utility services.
"The CPUC regulates services and utilities, protects consumers, safeguards the environment, and assures Californians’ access to safe and reliable utility infrastructure and services."[1]
However, the CPUC does not regulate governmental utilities.
"The CPUC does not regulate the rates of utilities and common carriers operated by government agencies."[0]
I would prefer that my county was responsible for utilities as they are much more responsive to local demands and its much easier for me to justify rate increases for safety improvements.
[0] CPUC Wikipedia
[1] CPUC Mission Statement
"The Constitution of California declares that the Public Utilities Code is the highest law in the state, that the legislature has unlimited authority to regulate public utilities under the Public Utilities Code, and that its provisions override any conflicting provision of the State Constitution which deals with the subject of regulation of public utilities."
They often veto PG&E's proposed maintenance and infrastructure expenditure: https://twitter.com/cjg2127/status/1187969182182166530
The fact that this is often forgotten may be a political convenience: https://twitter.com/cjg2127/status/1187978236891807745
Yes. See https://twitter.com/cjg2127/status/1187969182182166530 and https://twitter.com/cjg2127/status/1187972495250341888 for the mechanism whereby this happened. If state regulators are striking specific line items to do with maintenance from PG&E's budgets and the awfulness is that PG&E doesn't do enough maintenance, then yes, the state regulators are forcing PG&E to be awful.
A drought combined with decades of highly aggressive fire suppression has sent the number of dead trees in CA forests skyrocketing. PG&E is an absolutely perfect scapegoat for CA politicians, but what would we say if one of our bosses told us to completely disregard mitigating impact, and instead focus all our attention on reducing the likelihood of failure to 0?
EDIT: not that PG&E is without responsibility, but it's just aspect in a complicated issue.
When fires happen in California, short-sighted shareholders from all over the place short sell their stock, sue them and waste money on legal expenses, and otherwise deprive them of funds they need to fix problems.
Imagine if every highway in the Bay Area were a publicly-traded company. Accident happens on I-280 due to a pothole. Shareholders panic and short sell I-280 stock. Accident never gets cleaned up. Pothole never gets fixed. Because they don't have funding to fix it.
When there are problems in infrastructure, like fires, we should be pouring money into fixing and upgrading infrastructure immediately so it doesn't happen again, not taking funding away.
I occasionally hear this argument about "the roads" mentioned, but I'm genuinely curious if there are notable real life examples of this scenario.
Should a publicly traded utility be relying on new investment to pay maintenance costs though? That seems like a horrible practice and a sign of more systemic issues at such a utility if one were to exist.
Tax/rate payers are paying in either scenario. Private ownership just means shareholders manage to siphon off some of the money in dividends before the lawsuits.
I'm not personally a fan of suing them because it comes out of customers' pockets and not executive compensation or dividends, but we need to do something. I'm happy to see state ownership considered as an alternative to the lawsuits.
The power shut-offs are in response to the past fires, which were caused by poorly maintained lines.
Yes, there is a strict liability regime. Yes, this makes the definition of negligence irrelevant. No, this doesn't make preventive maintenance irrelevant: strict liability only applies to fires caused by their equipment, and preventive maintenance obviously effects that (that's what it is preventive of.)
But, in any case, if there weren't at least negligence involved, the behavior contributing to the fires would probably not have been found to be a violation of their criminal probation on top of any civil liability for damage caused by the fire.
On the bright side the lawsuits have impacted PG&E's stock prices which does make it easier to take the company over, but the loss of power + increase of prices is not an ideal outcome.
[1] https://en.wikipedia.org/wiki/Wildland%E2%80%93urban_interfa... [2] https://www.fs.fed.us/nrs/pubs/rmap/rmap8/rmap-nrs-8-WUI-MAP...
"About 48 percent of the population inside micropolitan statistical areas lived in incorporated places, while about 52 percent lived in unincorporated areas"
https://www.census.gov/population/www/documentation/twps0082...
anecdotally the pursuit of not being around "public services" is a large part of the motivation. Personally as I'm leaving my 20s far behind I realize all the neon and jazz of the city did nothing but pacify a deeper realization that a more clear seeming experience of mind was on hold or somehow diluted...convenience can be very distracting.
... hopefully this makes some kind of sense. different kinds of folks/values. a lot of my peers live right in the city, which makes sense. convenience of stores / hospitals etc for raising a family. for me alone give me 50 acres and a 2 bdrm ranch home. and an invisible driveway :)
in all of the US 62% live in incorporated areas.
United States 281,423,231 175,062,893 62.2 106,360,338 37.8
https://www.census.gov/population/www/documentation/twps0082...
https://en.wikipedia.org/wiki/Bel_Marin_Keys,_California
That's an unincorporated area, populated by an affluent community, with all the services you'd expect.
I think the answer is actually in the negative becuase the common amenities include pretty basic services like roads, police protection, or grid power. As far as I'm aware that level of disconnect is very rare.