Is there a public utility option for California’s PG&E?
Monday, November 04, 2019
Damage from 13 different wildfires has affected California during the past week. Sonoma County’s Kincade fire grew to 77,000 acres, ravaging large land swaths, whole neighborhoods, and grape-ripening vineyards.
At 80% contained, it is nowhere near the size of 2017’s Thomas fire, which scorched 281,893 acres. But all the fires combined, including Ventura County’s Marie fire, will yield more damages incurred for the already embattled energy industry in the state.
The Thomas fire caused $2.2 billion in damages and heated debate about fire prevention. Pacific Gas & Electric (PG&E) and Southern California Edison (SCE) have faulty equipment linked to rampant wildfires — resulting in litigation and ongoing bankruptcy restructuring for PG&E.
Additionally, controversy surrounds PG&E’s lobbying towards Gov. Gavin Newsom’s election and the passing of AB 1054, which set up a wildfire fund described as a “bailout” for investor-owned utilities.
Attention toward alternative electric grid management will continue to grow with the sheer number of people impacted by wildfire damage. Poor air quality is now commonplace in the health-focused state, and this issue alone may press more people to consider radical solutions.
Fittingly, the Bay Area Air Quality Management District recent hosted a public seminar on wildfire air quality with recent fires burning. Short- and long-term exposure to fine particulate matter — airborne toxic substances — were explained in detail.
Asthma and lead poisoning risks in low-income neighborhoods are established public health hazards. These same communities, which include majority immigrant, nonwhite, and single female-led households, are differentially impacted. There are scientific links to more serious health conditions: “...therisks of major neurological disorders, such as dementia, Alzheimer’s, autism spectrum disorder and stroke, go up when people are exposed to fine particulate matter, according to one study.”
As particulate matter mixes with agricultural dust and oil refinery pollution, negative impacts on health require an urgent public response. When electric companies neglect maintenance, the public is left to its own devices.
One of these devices is to make PG&E’s electric grid a public utility: an idea more politicians are connecting to the Green New Deal proposal, backed by presidential hopeful Sen. Bernie Sanders, I-Vt.
Power grids as publicly owned goods eliminate shareholder expectations that conflict with public safety and health concerns — as the recent Boeing debacle proves.
Public ownership is no magic bullet here; public utilities can be mismanaged, too.
Consider the debate about Puerto Rico after Hurricane Maria. Puerto Rico Electric Power Authority (PREPA) was government-owned and cash strapped with debt from archaic infrastructure and corrupt contracts when Maria hit. Many supported continued government ownership of the grid, with vast repairs including burying power lines and a transition to 100% clean energy sources by 2050.
The public view didn’t win there, and a $20 billion privatization plan to rebuild infrastructure was recently unveiled, instead of a democratically run public PREPA. The government will choose a private company to take over by January 2020, with a Nov. 1 rate hike in effect.
Puerto Rico is implementing a popular microgrid model increasingly powered by renewable solar and wind — an idea now de rigueur regardless of ownership status. PG&E could also be restructured as a microgrid; the company serves 16 million customers with “106,681 circuit miles of electric distribution lines.”
In the climate change era, long, above-ground power lines are proving disastrous.
PREPA offers just one example of how public utilities management does not automatically translate to democratic access and control by the citizens it serves.
Some public energy commissions need reform as they grow predictably defensive, exhibiting a fight-or-flight mentality, which can evolve into an “arm’s length corporatized version of public ownership.” The Huffington Post reports: “The regulatory bodies now prioritize profit for investor-owned power companies and fall victim to ‘regulatory capture’ when private utilities deploy their war chests to finance election campaigns and lobby sitting officials.”
A public power grid for Northern and Central California sounds attractive for many reasons: sustainable energy commitments, public health concerns, rising property costs and taxes, and the sheer inconvenience of constant blackouts and evacuations top the list.
Gov. Newsom has appointed a new energy team, with an energy czar, to review the situation as PG&E faces impending fire damage claims. Damage liability totals already amount to $30 billion— which bankrupted the company.
Newsom rhetorically acknowledges a public ownership option but expresses private proclivities. He recently invited Warren Buffett’s Berkshire Hathaway to bid on PG&E’s failing infrastructure, which is now worth a paltry $2 billion, down $22 billion after valuation at $24 billion a year ago.
Two hedge fund groups have offered private takeover options. However, they are both deterred by federal bankruptcy court language “allowing the investment offers to be changed or withdrawn if new fires attributed to PG&E have caused the destruction of 500 structures or more before the end of the year.”
No one really wants to invest in conditional wildfire-prone infrastructure.
San Jose Mayor Sam Liccardo wants a seat at the restructuring table with his proposal to form a company to buy PG&E and turn it into an energy renewable microgrid cooperative. Post-Maria Puerto Rico popularized this model before Silicon Valley’s cryptocurrency pirates altered the investment landscape.
Here’s a lightbulb moment: Maybe Liccardo and Newsom should recruit California’s Big Tech/cryptocurrency billionaires (and others) to kick down the $2 billion for PG&E, then walk away from company control, leaving an aspiring democratically run utility in residents’ hands.
A recent Guardian piece on Silicon Valley’s “insatiable pursuit of power” claims “the share of digital technologies in global greenhouse gas emissions has increased by half since 2013, from 2.5% to 3.7% of global emissions.”
There’s a public responsibility here, when "each Bitcoin transaction currently required 80,000 times more electricity to process than each Visa credit card transaction." California just got its first Bitcoin ATM as Facebook pushes its cryptocurrency service, Libra.
Maybe Big Tech should pay it backward and forward, giving the grid to the people who, unwittingly, provide a steady supply of free data?
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