As this week started, it looked like it could be a pivotal one in the story of how safe and reliable electric power will be provided to Northern California.
Gov. Gavin Newsom had objected to PG&E Corp.’s bankruptcy reorganization plan, saying it fell short of corporate governance and wildfire safety requirements under a new state law. The publicly traded company’s stock plunged on Monday.
But that didn’t stop PG&E from winning bankruptcy court approval for a $13.5 billion legal settlement with wildfire victims.
Meanwhile, the San Francisco-based utility said it would continue working with the governor on the terms of its reorganization plan.
All this comes as a lot of people in the state are thinking about how to make PG&E into something more like the Sacramento Municipal Utility District, with its less expensive power and better safety record. Some cities served by PG&E, including Davis and Rocklin, are thinking about how to provide their own power, while a coalition of more than 100 leaders in the state is pushing a plan to have PG&E’s entire Northern California territory served by a customer-owned cooperative.
Earlier this week, I discussed the various plans for reforming PG&E with Mark Toney, executive director of The Utility Reform Network, a San Francisco-based advocacy group. TURN, Toney says, advocates on behalf of residential utility customers.
Toney said this is the first time, to his knowledge, that there have been serious proposals to turn the entirety of PG&E’s system over to management by a public entity. Plans for either a cooperative model or a SMUD-like public utility have been laid out “in concept paper form,” Toney said.
“We really need to see more detail on how these plans are going to improve wildfire mitigation, meet California’s clean energy goals, keep rates affordable and what they provide for consumer protections,” Toney said.
He observed, however, that all of those may be easier to provide if PG&E’s territory isn’t broken up. He expressed concern about proposals pushed by individual cities to set up their own utility services.
The cities putting forth those proposals tend to have relatively low wildfire risk and to be relatively inexpensive to serve, Toney said.
If those communities break off from PG&E’s system “what you’re left with is territory that nobody wants, where there’s a lot of poverty and extremely high fire risk and high cost to serve,” he said. “There’s some serious equity concerns with breaking it up that way. We’re interested in spreading the risk and spreading the costs among a wide set of customers.”
The tendency for individual communities to go their own way has exacerbated some of California’s big, statewide problems before. Our housing crisis comes to mind, with most cities in the state failing to allow enough homebuilding to keep prices down.
Change is clearly needed at PG&E. The fires and outages are unsustainable. It is a good thing that local leaders are thinking seriously about how to stop them.
But the main victims of PG&E’s failures have been people in places like Paradise and the far north of the state, and we’re all still paying to help them recover. However the utility system is fixed, it should be fixed for everybody.