No customer benefits in PG&E’s self-serving proposal
Customers can always trust PG&E to come up with unique, new ways to raise rates, ways that don’t improve either safety or service, but boost PG&E’s bottom line. TURN recently defeated just such a scheme, a nervy attempt by PG&E to bilk customers for $16.7 million dollars for an investment in a private company, SVTC Solar. While seeking ratepayer funds, PG&E refused to invest any of its shareholder money in the company.
With PG&E’s blessing, private, for-profit SVTC sought access to PG&E ratepayer funds to finance a risky venture under conditions that would be anathema to any private investor. This on top of a $30 million Department of Energy (DOE) grant the company had received.
According to PG&E, a major objective of the proposed investment was to “obtain for customers and California significant benefits of the solar PV renewable energy manufacturing projects.” But PG&E was unable to specifically point to actual gains in the form of jobs or economic activity that would accrue to California, or to customers, from their investment.
PG&E also predicted that the SVTC Solar project would result in a reduction in the price of solar panels and the financial returns associated with investments in solar. If those benefits were to materialize, they would mostly accrue to solar companies, workers in manufacturing facilities in Asia, wealthy investors, and SVTC executives.
“TURN presented evidence that showed the likelihood of ratepayer benefits was somewhere between limited and nonexistent,” said TURN staff attorney Matt Freedman. “In fact, under some scenarios, ratepayers could lose some or all of their investment while SVTC executives realized substantial profits.”
In addition, Freedman said, “the terms of the deal are structured to maximize potential rewards for SVTC while limiting rewards for PG&E ratepayers and insulating PG&E shareholders from any risk.”
CPUC Commissioners Florio, Sandoval and Ferron agreed, voting on May 10 to nix the ratepayer rip-off. “We need to be careful stewards of the public’s money,” said Commissioner Ferron. “I have tried to treat ratepayer money more carefully than I would my own.”