L.A. power utility found irregularities on equipment where wildfire broke out
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It seems as absurd to me as if one single company were to own all of a city’s water pipe infrastructure. Maybe that’s actually common too, I just don’t understand why. If it’s simply because municipalities sold them off long ago for short-term windfalls, my next question is why we as a state allow that, in the same sense that we don’t allow selling state parks without major hullabaloo.
Granted, I’m covered by LADWP, the nation’s largest municipal water and power utility that even predates this form of the city’s government itself, and I’ve really only had outstanding service with them (I noticed a small leak with a water main forming a minor puddle on a side street and within an hour someone was out there fixing it), so I guess I am wondering what the case for privatized utilities even is.
Could someone who knows better than I please explain why the state or local municipalities don’t/can’t manage their grid?
Having spent a good part of my career consulting for state and local governments in IT, it's an easy generalization to say they're mostly all incompetently run, and not something most are equipped to support from the top down. Even when run well, they're not well funded, and if some of the people actually are good, they're probably too busy fighting and offsetting the incompetent ones to do any good.
The flip side is I've also worked for several power companies over the years, and they're not often much better. They're at times better run and better people, but so dragged back by bureaucracy and politics they can't get out of their own way to do any good if they wanted to.
For a private company in sole ownership of a utility, how does the market keep the incentive to cost-cut (i.e. increase profit by reducing expenditures on things like timely customer service or deferring capex) in check versus actually improving service and efficiency above “it still works” ? It’s not like any individual could choose another provider of electricity, so therefore it’s not much of a market at all.
What is the motive to do anything other than rent-seek without a competitor to incentivize them to improve?
At least municipal and state leaders have some sort of accountability in that they could get voted out if it’s going wrong on their watch. Meanwhile PG&E was rewarding its shareholders by raising rates and deferring maintenance for paying out high dividends rather than re-investing in itself, which seems like exactly the opposite thing the public would want to incentivize.
I've also done some contract work for a couple of power companies, and don't have the impression that they tried to maximise profit. Rather, they seemed to see themselves as safe, zero-risk, low-profit places. As someone who'd never make either large profits or losses. The teams I dealt with didn't seem like people who would face down screaming customers. Safe, low-risk, boring, staid, always profitable, never headline makers.
Assuming that the Californians are like the teams I dealt with, I would tend to explain their present state with a reluctance to offend the customers.
So for same continuous geographical area having single water utility is lot of sense.
Same mostly goes for power.
With internet, the actual infra is so small and affordable that only the last bit to consumer is expensive per unit. So in sanely operated markets you can have multiple operators at same time and competition works.
But even if you have a private company capitalize on these efficiencies of scale, there’s no competition to force them to do anything other than the bare minimum (“provide this utility, today, above some bare minimum acceptability standard that doesn’t cause the state to nationalize is” with barely an afterthought toward what maintenance capex looks down the line), and even then Edison and PG&E still can’t hop over the low bar they set for themselves.
That said, utility companies have a duty to properly maintain infrastructure, and this is an easier problem to fix. There are a few companies working on this, such as Gridware (https://www.gridware.io).
I remember driving up the main highway into Paradise, CA and saying to myself "if there is a fire here...anyone on this highway is screwed". Fast forward less than 10 years and I was watching the news reports of people driving blind through the fire at nearly the exact spot.
The entire town was on a ridge with tons of fuel (pine trees)...elevations below that was nothing but dry grass.
Although the fire was caused by power lines...All it would have taken was cigarette butt.
Well yes, in the sense that someone somewhere did something that triggered the cascade of effects that produced the boom. But assigning "100% of the cause" to that individual just lets everyone else in the chain escape blame.
If it isn't PG&E this year, it will be something else next year. Or the year after that. Like the LNU complex, it could be simple lightning.
Which is not to say that PG&E doesn't bear some responsibility, but "100% of the cause" is too reductive.
But none of those things actually happened. PG&E’s equipment caught on fire because it couldn’t handle its normal electricity load anymore, because they delayed maintenance for years.
There is no sense talking about all the things that “could” be the cause in some hypothetical future where PG&E hadn’t caused the fire that actually happened first. Because that would require PG&E to prevent the fire that actually happened, which they did not.
I think the residents and city also bear some responsibility because the risk of fire in coastal southern CA is widely known. People just don't like to follow CalFire guidelines or pay the costs of protecting their property. But if there was poor design or lack of maintenance in the electrical grid that rises to the level of negligence then the utility should pay.
It’ll be really infuriating if it turns out all the biggest California fires were caused by utility issues.