Thanks to your thousands of letters, emails and phone calls and the tireless work of TURN staff for the past three years, we succeeded in stopping a ratepayer bailout of billions in wildfire damage caused by PG&E’s negligence. In its first bankruptcy in 2001, PG&E was able to saddle customers with about $7 billion of its debt, costing each of you an additional $1,500 over the next ten years. This time around TURN prevailed in protecting ratepayers and forcing PG&E shareholders to pay $24 billion in wildfire losses out of their own pockets. I want to share with you some of how, with your help, we were able to achieve this enormous victory.
TURN Battles Global Capital to a Standstill
TURN is proud of our track record of beating utility companies in the state legislature. However, something different happened after the huge firestorms caused by PG&E in the fall of 2017. Global capital in the form of Wall Street firms and rating agencies started flying out from Manhattan to Sacramento on a weekly basis to threaten key legislators with the spector of junk bond status and financial ruin for PG&E, and hence the entire state, if PG&E failed to win a customer bailout. I know because every week I would get a request to meet in person with Citi, JP Morgan Chase, Bank of America, Merrill Lynch, Standard & Poors, or Moody’s—nearly all of which I declined. Even Senate Bill 901, which we branded as the “Ratepayer Bailout Bill,” fell far short of the hopes of PG&E and Wall Street due to fierce opposition from TURN member’s letter writing and the large coalition of ratepayer groups we organized.
PG&E Gets a Second Chance for a Bailout by Filing for Bankruptcy
PG&E was not pushed into bankruptcy by the horrific Camp Fire that killed 85 residents and destroyed 20,000 buildings in Paradise. PG&E chose to rush into bankruptcy in order to give itself another shot at the massive ratepayer bailout that it had failed to win from the CPUC or the legislature. After all, in a Chapter 11 restructuring bankruptcy, creditors are king. Shareholders, debtholders, wildfire claimants, insurance companies, government agencies and contractors are all represented—but not ratepayers, so we’re at a huge disadvantage. After the bankruptcy court denied TURN’s request to recognize an official ratepayer committee that included AARP, large manufacturers, California Farm Bureau, and U.S. Military Bases, the generous financial support of our members enabled us to hire our own attorney to fight to protect customers’ interests.
Governor Steps Up to Protect Ratepayers in Bankruptcy Process
Governor Newsom and his staff were instrumental in adopting legislation that protected ratepayers in bankruptcy court. Several legislators, led by bill coauthors Senator Bill Dodd and Assemblymember Chris Holden, felt burnt by the broken promises of SB 901 to keep PG&E out of bankruptcy, and transformed into strong TURN supporters. One of the key provisions of AB 1054, negotiated by TURN, required that PG&E use shareholder funds to settle $24 billion in past wildfire claims. It also granted the CPUC the authority to determine compliance of any bankruptcy settlement with the ratepayer protection provisions of AB 1054. Adoption of this bill was the only reason that the bankruptcy court was forced to take ratepayer protection into account in settling the PG&E bankruptcy case.
You Deserve Credit for Sharing in this Victory
I want to thank each and every TURN member who wrote a letter to a legislator, signed an online petition to the bankruptcy court, showed up at a public hearing, or made a contribution to the Ratepayer Protection Fund. Your continued support is essential to our success in holding utility companies accountable to customers, and we’re deeply grateful.