Sylvia Siegel had a captivated audience.
There were perhaps five dozen irked homeowners sitting in folding chairs crowded into a three-car garage of a custom home just off Eureka Road in the Granite Bay countryside south of the City of Roseville.
They were all there including Siegel united in outrage that PG&E — which at the time had the biggest portfolio of cheap hydroelectric power in the United States — had gotten the California Public Utilities Commission to grant back to back double-digit electrical rate increases. Meanwhile, just a mile away residents in Roseville enjoyed electrical rates almost 40 percent lower than PG&E. What was the big difference? PG&E was a for-profit utility that regularly greased the campaigns of state lawmakers regardless of their party affiliation while Roseville Electric was a city-owned utility.
Siegel — who wore owl-style glasses that sharpened the look she had of being everyone’s grandmother — had founded the consumer energy advocacy organization known as The Utility Reform Network (TURN) nine years earlier at her kitchen table in 1972.
The crowd had a splattering of well to do PG&E customers among several who were waving monthly bills in excess of $1,000 to power 5,000-square-foot homes, acres of irrigated landscaping relying on water wells, large heated swimming pools in January, and in some cases — separate servant quarters. Others were clutching much smaller bills that were approaching $60 a month to power their modest homes located in a rural subdivision that today would be a dead ringer for the Raymus Village neighborhood on the northeast outskirts of Manteca.
Siegel wasn’t there as an advocate for the poor nor to push green initiatives. She was there for one reason only — PG&E customers, period. She didn’t just believe they were getting a raw deal, she knew they were getting a raw deal.
Much of the exchange was the usual indignant exasperation that is the unfortunate birthright of captive PG&E customers. But what stood out from that early evening gathering of fed up PG&E customers 38 years ago was the collective realization that Sacramento was PG&E’s partner in crime.
Siegel laid out a compelling case that the California Public Utilities Commission (CPUC) that was founded by the state legislature using the framework of the State Railroad Commission that California’s last true reform governor, Hiram Johnson, played a key role to put in place to take much of the state back from the clutches of the ruthless Southern Pacific Railroad in the 1910s had created a situation where PG&E — just like the notorious SP Railroad had a century ago — had wormed its way into control of Sacramento’s power structure. And in doing so, the CPUC loaded with retired power company cronies was more concerned about the profits of the industries they regulated than the consumers they were supposed to protect.
Not much has changed in the past 38 years.
PG&E still has some of the highest power rates in the nation and they still game the system. The CPUC is still PG&E’s guardian angel with a track record of guarding the proverbial hen house with sharp barking during public rate hearings and then snoozing once rates are in place and the public spotlight is turned off allowing PG&E to profit from plundering consumers by weaseling around details in rate orders.
The only thing that has changed is the politicians have become complicit in the raping of ratepayers which is the real reason PG&E filed bankruptcy this week.
Much ado has been made of the $30 billion or so that PG&E says they are potentially liable for from wildfires while at the same time vehemently denying that is the case as being what forced the filing. That conveniently ignores a couple of facts. Not one wildfire case from 2017 or 2018 has gone to court. The state has essentially cleared PG&E in the Napa Valley inferno in 2017 that killed 22 people and represented about $13 billion of the overall $30 billion PG&E says it has in potential lawsuit liabilities.
PG&E has tons of assets they could sell off should they lose lawsuits including hydroelectric plants, a $1 billion corporate headquarters buildings, and the ability to divest themselves of their natural gas division to raise money to cover settlements. That doesn’t mention the fact they are sitting on $1.5 billion in cash.
But the real killer is the myopic green initiatives foisted on public utilities by politicians in Sacramento not simply pandering to the green movement but who demonstrate an eager willingness to place California consumers on the sacrificial altar. True they cross their fingers and hope the new green initiatives pencil out, but Sacramento is fully aware of the price people will pay if their bid to force the market to turn green backfires economically. But let’s be clear on one point — despite the green poison pill PG&E for the most part has made its own bed.
PG&E is upside down significantly in $31 billion worth of long-term green energy contracts thanks to carbon-based fuels used to generate electricity such as natural gas becoming cheaper and the cost of tax-subsidized green power increasing.
The bankruptcy court has the power to free PG&E from the state forced buys that ending up being worse for them than any other regulated for-profit utility in the state because of bad PG&E business decisions made with long-term power contracts.
Siegel back in 1981 foresaw the framework of what is now unfolding. The state legislature isn’t admitting complicity. The CPUC despite all of its huffing and puffing after PG&E in 2010 turned a San Bruno neighborhood to toast and killed off eight customers as collateral damage is still treating PG&E with kids’ gloves. And PG&E is snaking its way out of taking responsibility for its actions by using the court system to limit wildfire liability while freeing it from costly long-term power contracts.
Little wonder why the Wall Street Journal was reporting this week that PG&E stockholders are sticking with the company.
PG&E will defy its own ineptness and greed and will live on to plunder and pilferage 16 million customers.
Some who might be able to escape because the numbers work out and they can afford solar power installations may do so assuming PG&E doesn’t find ways to continue to gouge them.
Left will be the defenseless — the working poor, seniors on fixed incomes, and those struggling who are in the middle class — that can’t use the sun to escape the clutches of the profits over safety folks.
Siegel suggested back in 1982 that just fighting the CPUC and PG&E would not be enough. Ratepayers would also have to be willing to toss out politicians that did PG&E’s biding even if they were unwitting accomplices.
Californians did that once already when they jettisoned Gray Davis and made Arnold Schwarzenegger governor.
Bankruptcy court isn’t about customers, consumers, or ratepayers. It is about saving the firm filing, in this case PG&E.
The only real recourse those forced to be PG&E ratepayers have is to make elected state officials from the governor down to the Assembly pay if the for-profit utility cheats death again by manipulating the system instead of being broken up into public operated electrical concerns.