Legislators dust off ‘too big to fail’ defense for California energy company after wildfires

Daily Kos Staff

Friday November 23, 2018 · 10:01 AM PST

2018/11/23 · 10:01

PARADISE, CA - NOVEMBER 10: A Butte County sherriff deputy stands by at a destroyed home where a deceased victim of the Camp Fire on November 10, 2018 in Paradise, California. Fueled by high winds and low humidity, the rapidly spreading Camp Fire ripped through the town of Paradise and has quickly charred 100,000 acres and has destroyed over 6,700 homes and businesses in a matter of hours. The fire is currently at 20 percent containment. (Photo by Justin Sullivan/Getty Images)

Just a couple of weeks before the recent tragic wildfires that ravaged Northern California, Pacific Gas & Electric (PG&E), the main utility company in the state, pre-emptively shut down power to over 60,000 customers. The move was temporary and proactive, as arid conditions and high winds hitting the areas in question were potential factors in starting wildfires. However, the wildfires that have claimed dozens of lives and, when all is said and done, may have claimed hundreds of lives, might be the fault of poorly serviced PG&E infrastructure.

The many billions of dollars in damages that these wildfires have caused could very well hurt the energy giant, which has already admitted it doesn’t have nearly the amount of insurance it would take to cover the projected costs. But as the New York Times reports, California politicians are rushing to figure out a way to bail out PG&E.

Edward Randolph, director of the commission’s energy division, who was also on the call, said the officials had stressed that it was not in the interest of PG&E customers to allow the utility to go into bankruptcy.

“It creates a lot of uncertainty around the companies’ ability to have access to cash to have money, which is critical for the utility to buy electricity and to buy natural gas,” Mr. Randolph said in an interview Friday. “Absent a road map to a smooth transition to an alternative to PG&E, we still need an entity in Northern California that can provide electric and gas service.”

Tell that to people who lost everything in the town of Paradise. Legislators, including a lot of California’s Democrats, have been shoring up private-utility liability defenses for a while now. In September, Gov. Jerry Brown signed a bill that, in essence, bailed out companies like PG&E for 2017 fire damage and offered up a way to create legislation that will free them up from liability in this fire. Not every Democrat has gone along with Brown’s version of “liberal governance.”

“What a happy Thanksgiving gift this is for PG&E shareholders, directors and executives to enjoy this holiday weekend, while over 12,000 residents of Butte County spend Thanksgiving in shelters, tents or their cars with some mourning their dead or distraught over loved ones who are missing,” state Sen. Jerry Hill, D-San Mateo, a frequent critic of PG&E, said Tuesday.

This is problematic for a variety of reasons, not the least of which is that companies like PG&E have spent hundreds of millions of dollars lobbying against socializing our utility systems, but clearly want the Californian taxpayer to incur all of the costs of treating the company like it actually was a socialized utility, but with none of the benefits. When the legislation to make PG&E less liable for damages was passed in September, the company explained itself like this:

PG&E said it would not be financially sustainable without changes to state policy. PG&E reported second-quarter net losses of $984 million, compared with net income of $406 million a year earlier.

So, you are not a viable business. That’s what you are saying, PG&E. You are facing your second potential bankruptcy in 15 years, after teetering on the edge of extinction after the manufactured 2001 energy crisis. That any state would allow you to continue to pretend to function as a private entity is madness.

For a more nuanced conversation about the many complexities involved in California’s current wildfire and forest fire issues, head on over to this community diary and discussion.

Legislators dust off ‘too big to fail’ defense for California energy company after wildfires

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