Reforming and Re-regulating PG&E

(CPUC # I 15–08–019)

Key Recommendation: The California Public Utilities Commission must enforce vigorous regulation and structural reform to compel PG&E to provide electric and gas service to its 16 million customers that is safe, clean, reliable and affordable.

Vigorous Regulation of PG&E

The CPUC can no longer rely on a “trust and verify” approach and must instead hold management to the highest standards and force the company to put people before profits.

  • Enforce Compliance
    • Require complete compliance with all safety standards by stepping up its oversight of PG&E’s operations through increased inspections and embedded staff on the ground.
  • Prioritize Safety over Profits
    • Replace profit driven management bytying executive pay packages to safety outcomes and by requiring safety expertise of corporate board members.
  • Promote Corporate Accountability
    • Hold PG&E accountable for safety by making a portion of PG&E’s authorized return on equity dependent on demonstrable safety outcomes.

Structural Reform of PG&E

  • Public Ownership of Transmission System
  • The CPUC could consider a public purchase of PG&E’s transmission system, through the framework set out in a previous agreement with SCE for a similar takeover.
  • State ownership and control could prevent skyrocketing federally-set costs and protect against efforts by FERC to interfere in California’s wholesale markets.
  • Public Ownership of Hydroelectric System
  • Acquiring PG&E’s hydroelectric system would enable the state to retain cost-based rates, eliminate shareholder returns, and reduce the cost of debt and monthly bills.

Put Consumers First If PG&E is Sold or Broken Up

  • Protect customers’ investment by assuring that if any PG&E assets are sold those assets will be available to serve customers for their useful lives at a fair and reasonable price.
  • Require that high costs of fire mitigation and liability is shared by all customers currently living in PG&E territory, so that the burden doesn’t fall on rural customers if there is a geographical break-up of PG&E.
  • Don’t price out lower income customers who can’t afford their bills already. Every penny that is added to bills increases the risk that vulnerable consumers will face shutoffs.
  • Maintain progress toward renewable energy goals by continuing the current system of coordinated statewide resource planning.