San Jose mayor joins push to break up PG&E

by Chris Reed | October 24, 2019 5:50 pm

The Rocky Fire burns in Lake County in 2015 in PG&E’s service area.

The political pressure on Gov. Gavin Newsom, the Legislature and the California Public Utilities Commission to break up Pacific Gas & Electric has grown rapidly since PG&E ordered power outages from Oct. 9-12 that affected more than 2 million people in response to the fire threat posed by heavy winds.

The utility began another planned outage Wednesday that affected 178,000 homes and businesses — once again saying it had no choice because gusty winds could cause its infrastructure to spark fast-moving wildfires.

But the idea that one of the great wealth-producing regions in the world can’t keep the lights on infuriated many in Silicon Valley and the Bay Area. San Jose Mayor Sam Liccardo said his city was interested[1] in buying all or part of PG&E and turning it into a municipal utility. “I’ve seen better-organized riots,” Liccardo said of PG&E’s preparations for the Oct. 9-12 outages.

San Francisco has sought parts of PG&E for months. On Oct. 9, Mayor London Breed offered PG&E $2.5 billion[2] for its energy infrastructure serving her city. The utility rejected the offer.

Meanwhile, Newsom’s Oct. 14 call for PG&E to provide residential customers affected by the Oct. 9-12 outage a credit or rebate[3] of $100 and small businesses $250 was rejected[4] Tuesday by the utility. This was seen as an effort by the governor not just to get PG&E to pay for the mass inconvenience it had caused but to create an economic disincentive to the utility imposing outages even when fire risks were only moderate.

Will Newsom drop support for PG&E getting out of bankruptcy?

Newsom is in a difficult situation that could lead him to abandon his support for PG&E emerging from its Chapter 11 bankruptcy, which was declared in January after the utility acknowledged it faced $30 billion or more in wildfire liabilities. The utility must do so by July 2020 to be eligible for a $26 billion wildfire relief fund the Legislature passed this summer to help utilities deal with the massive cost of fires. 

As recently as November 2018, support for PG&E among state lawmakers was significant enough that Assemblyman Chris Holden, D-Pasadena, told reporters he would carry a bill[5] to protect the utility from wildfire liabilities. But such support is no longer evident in the Capitol. Newsom’s recent descriptions[6] of PG&E as greedy, incompetent and untrustworthy resemble the longtime rhetoric of the utility’s harshest critics, such as state Sen. Jerry Hill[7], D-San Mateo.

Pundits from several state newspapers and news websites have speculated[8] that Newsom’s political future depends[9] on how he handles[10] the PG&E crisis. They noted that Gov. Gray Davis was so hurt by rolling blackouts in the winter of 2000-2001 that a Republican-led effort to replace him in 2003 rapidly caught fire and culminated with Arnold Schwarzenegger replacing Davis.

“I’ve seen this movie before,’’ Garry South, a Democratic strategist and a top aide to Gov. Davis, told[11] Politico California.

But even if Newsom deftly handles the PG&E matter, he could still face blowback over what some experts expect to be a series of big increases[12] in power bills from utilities overwhelmed by the cost of wildfires and of preparing for them in an era of hot, dry conditions. California’s rates are already 50 percent higher[13] than the national average, according to data from August.

As South told Politico, Californians may not have had cause to blame Gov. Davis for the 2000-2001 blackouts. But when bad things happened that affected the basics of modern life, they blamed the person in charge, he said. 

  1. was interested:
  2. $2.5 billion:
  3. credit or rebate:
  4. rejected:
  5. carry a bill:
  6. descriptions:
  7. Jerry Hill:
  8. speculated:
  9. depends:
  10. handles:
  11. told:
  12. series of big increases:
  13. 50 percent higher:

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