Opinion: PG&E bankruptcy: Was outcome ever in doubt?
It’s fair to ask a simple question as Pacific Gas & Electric Co. gets set to exit bankruptcy sometime before a June 30 deadline: Was the outcome a done deal before this ever started?
That’s a valid question because while PG&E will emerge with a mostly different board of directors, it’s essentially the same company as ever, covering the same territory with the same personnel and customers. This repeatedly felonious utility, admittedly responsible for about 100 premature deaths in the last 10 years, will stay in business partly at the expense of electricity consumers almost everywhere in California.
PG&E is also a model for the state’s other two large privately-owned electric suppliers, Southern California Edison and San Diego Gas & Electric, whose own maintenance problems caused multiple deaths in recent wildfire seasons. In short, if PG&E could get away with its crimes, the others will have the same privilege should they cause similar damage. While the others have not caused harm on the scale of havoc inflicted by PG&E, they have caused plenty of destruction via fires from San Diego to Ventura.
Early on in the bankruptcy proceeding, which played out in federal court in San Francisco, there was plenty of loud talk from Gov. Gavin Newsom about a possible state takeover of some PG&E equipment and functions. At one point, he said PG&E “No longer exists.”
Uh-uh. Its customers and victims are discovering PG&E very much exists.
In fact, state regulators are treating this blighted company just as they always have, even though some faces on the California Public Utilities Commission changed in the last two years. That is to say, PG&E still gets the same favored treatment over its customers, just like all utilities have through the last 60-plus years.
If the outcome was not pre-ordained, how else to explain what happened to some of the 70,000-plus uninsured or underinsured victims of Northern California blazes the utility helped cause over the last three years, including the Camp Fire, which destroyed the town of Paradise and killed at least 85? Just two weeks before the voting deadline in mid-May, a still-unknown number had not received ballots in the vote on whether to okay a settlement with PG&E. Yet, the PUC did not try to delay the deadline, even though there had to be a yes vote on the settlement before the utility could exit bankruptcy.
The vote was by no means certain, as about half the proposed $13 billion settlement consists of PG&E stock currently worth much less than the value it’s given in the settlement.
How else to explain that out of a so-called $2.1 billion fine the PUC assessed the company for negligence, $1.9 billion will go to maintain and upgrade equipment? That’s not a fine; it’s an investment. Meanwhile, the regulators excused PG&E from paying the other $200 million of the “fine,” reversing a decision by their own administrative law judge.
How else to explain the fact that the state’s new Wildfire Fund, designed to reimburse utilities for future damages they expect to cause, was partly designed by the woman Newsom later made president of the PUC? She then helped the commission approve charges to most California consumers without even an evidentiary hearing on whether any charge to ratepayers is justified.
The Wildfire Fund next “borrowed” $2 billion from the state’s Surplus Money Investment Fund, which normally buys high-yield securities with budgeted money unused by state agencies. The state’s schools and other general fund agencies sorely need that money right now, with massive budget cuts coming. Will it ever be clawed back or will it merely wait for the utilities to do more damage?
The strong implication of all this is that the outcome as pre-ordained. Said San Diego consumer lawyer Michael Aguirre, “The governor (and his appointees) spent all of 2019 (and part of 2020) using state powers to save the debt- and liability-ridden PG&E – his longtime financial backer.”
Aguirre is now suing for an end of consumer payments for the Wildfire Fund, which he maintains were illegally okayed by the PUC.
All of which makes it logical for every electricity customer in California to figure PG&E’s survival was completely assured before the ballyhooed bankruptcy proceeding ever started.
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Email Thomas Elias at firstname.lastname@example.org. His book, “The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net.