Editorial: PG&E debacle calls for new PUC approach

San Jose Mercury News:

Editorial: PG&E debacle calls for new PUC approach

Not just a review of the latest fire and outage fiascos, but a vision for the future that ensures affordable and safe power for Californians

PG&E isn’t the only entity failing Californians. The state Public Utilities Commission continues to fall far short at fulfilling one of its primary goals: “assuring Californians access to safe and reliable utility infrastructure and services.”

The PUC has known for a decade that PG&E can’t be trusted. But the state regulator continues its pattern of being reactionary, rather than forward-looking. And trusting of the felon utility rather than skeptical.

The latest example? In December the PUC gave the utility virtually carte blanche to conduct Public Safety Power Shutoffs, believing that PG&E would manage them in a responsible fashion. It’s yet another PUC failure to anticipate PG&E’s incompetence and install sufficient safeguards to protect California residents and businesses.

The PUC must not make the same mistake as PG&E emerges from bankruptcy proceedings in 2020.

Gov. Gavin Newsom has ignored our calls for the state to replace or break up PG&E. The governor on Sunday asked Warren Buffett’s holding company, Berkshire Hathaway, to make a bid for PG&E. But industry experts consider that a longshot, at best.

The more likely scenario is a hedge fund taking control of PG&E. Hedge funds are comprised of investors whose first priority is realizing large profits. That should raise red flags for PG&E’s 16 million customers throughout Northern and Central California seeking for the utility to finally start putting safety before profits.

The PUC’s newly appointed president, Marybel Batjer, must promptly present Newsom, the Legislature and Californians a blueprint for how she will ensure proper oversight of the utility’s operations. Not just a review of the latest fire and outage fiascos, but a vision for the future that ensures affordable and safe power for Californians. While PG&E customers pay some of the highest utility rates in the country, the company’s faulty equipment has led to 111 deaths in the past decade.

Assemblyman Marc Levine, D-San Rafael, announced Monday that he would introduce urgency legislation in January authorizing the PUC to temporarily appoint a public administrator to oversee management of PG&E if a test determines it’s necessary. The test would include an analysis of PG&E’s financial health, the reliability of the utility’s infrastructure and its safety record.

The idea has merit. Urgency bills take effect immediately after they are enacted into law. But, first, let’s see Batjer’s plan for regulating PG&E after it emerges from bankruptcy.

Critics argue that an overseer or public administrator with authority over PG&E’s operations would shift liability to taxpayers, rather than the utility. The reality is that residents and businesses already pay for PG&E’s shortcomings.

As of Monday evening, the economic impact of the latest shutdowns had reached an estimated $2.5 billion. That’s after the PUC in April approved a $373 million rate hike for PG&E to help pay costs related to wildfires. Additional rate hikes are considered inevitable as the utility’s liabilities increase.

Despite the latest shutdowns, PG&E admitted last week that its equipment may have started the Kincade fire, which forced the evacuation of 185,000 residents and has already burned 75,000 acres and destroyed 124 structures. PG&E also said that two weekend fires in Lafayette, including one that burned the Lafayette Tennis Club, may have been caused by its power lines.

Californians have endured 10 years of PG&E and PUC incompetence. It’s time to insist on safe, reliable and affordable power.