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Sen. Jerry Hill. (Photo: Kevin Sanders for California Globe)

PG&E Public Utility ‘Backstop’ Bill Passes Senate, Awaits Newsom’s Signature

Should PG&E fail to get out of bankruptcy, SB 350 would make it a public utility

By Evan Symon, June 30, 2020 2:20 pm

On Monday, the Senate passed a bill that would turn PG&E into a non-profit, public utility should the company fail to emerge from bankruptcy.

A possible state takeover of PG&E

Senate Bill 350, authored by Senator Jerry Hill (D-San Mateo), was passed in a timely manner due to PG&E’s looming deadline to get out of bankruptcy by June 30th. While PG&E is widely expected to get out of bankruptcy in time and there is a three month block to definitely emerge from bankruptcy, SB 350 acts as sort of a backup plan in case that fails.

Should PG&E not get out of bankruptcy or fail to adhere by updated safety policies by September 30th, the California Public Utilities Commission (CPUC) would have a court would appoint a receiver to take all PG&E property and temporarily run utilities under the bill. PG&E, upon agreeance by the Governor, would then be turned into a non-profit, state run company called Golden State Energy. The initial board would be chosen by Governor Gavin Newsom and the legislature, with all future boards having 6 members being chosen by customers.

SB 350 would also then mandate “sufficient pay” for all operations and require a revenue model to stay efficient. The new Golden State Energy would also be given special permission by the bill to issue debt to buy property.

Lawmakers for and against state takeover

John M. W. Moorlach
Senator John M. W. Moorlach. (Photo: Kevin Sanders for California Globe)

PG&E, supported by many lawmakers and other utility companies, heavily opposed SB 350 from being passed, noting that they were close to coming out of bankruptcy.

“We intend to implement our Plan, become a new and transformed company that is positioned to meet our commitments to California and our customers and, ultimately, render this legislation unnecessary,” noted PG&E in a statement.

Many Senators agreed on Monday during the Senate vote, with many pointing out the negatives that come with a state takeover and the state running a large utility operation.

“We have one of the largest unrestricted net deficits and I’m just really concerned about whether we’re capable of actually running an operation of this substance,” said Senator John Moorlach (R-Costa Mesa).

Senator Scott D. Wiener. (Photo: Kevin Sanders for California Globe)

However, the Senate ultimately passed the bill Monday 30-8. Many Senators mentioned PG&E’s negligent behavior in not updating power lines and other equipment, causing many wildfires in the late 2010’s, including the deadly 2018 Camp Fire that killed dozens of people that PG&E recently pleaded guilty to. In addition to billions of dollars of property damage and destruction, PG& was also faulted for continuous blackouts last year, harming millions of people in the process of attempting wildfire protection.

“PG&E failed us,” said Senator Hill on Monday. “And we all know that the state cannot afford for PG&E to fail us again without having a backstop in place.”

Senator Scott Wiener (D-San Francisco) also agreed, noting that SB 350 was very close to one of his own bills earlier in the year.

“I think this is the next best approach. To say we’ll give you the one more chance, but then you will become a public benefit corporation if you don’t get it together,” added Senator Wiener.

PG&E close to getting out of bankruptcy for good, but not out of the woods yet

Industry experts were generally mixed to SB 350.

CPUC just gave the green-light for PG&E to get out,” explained Washington-based energy expert Dr. Zachary Lang. “I see SB 350 as a warning more than a real action. It gives PG&E real consequences should it fail to improve safety and reshape itself.

And what it asks is not impossible. In fact, to adhere by everything they agreed to with CPUC, it’s quite reasonable. No one wants another Camp Fire to happen. No one wants to be negligent like that. And I’m sure the company doesn’t want to pay out billions like candy like it just did.

We’ll cross the takeover bridge when we get there, but right now PG&E is on track and is showing vast improvements. CPUC wouldn’t have gave them a go if there wasn’t a clear plan in place. They’re known as one of the toughest state regulators in the country, so if you passed CPUC, you should be on par with at least Con Ed (Consolidated Edison of New York).”

SB 350 is expected to be signed soon by Governor Newsom. PG&E remains close to emerging from bankruptcy.

Evan Symon
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9 thoughts on “PG&E Public Utility ‘Backstop’ Bill Passes Senate, Awaits Newsom’s Signature

  1. State run power. What could possibly go wrong? California needs to have a new theme song. Venezuela here I come! I may have to rewrite the lyrics to fit the “green” disaster in the making.

    1. Really, CW. Imagine a disaster worse than the one we have in PG&E already. Here it is!
      Of course we knew these freaks have been salivating over this one for a l-o-n-g time.

  2. I wonder if California would be liable for all the wildfires they start as a state run utility? Somehow I suspect they exempted themselves.

    The Globe needs to report on the unfair liability laws that make PG&E liable even when they are not to blame.

  3. Calazuela, has a nice ring to it!

    DISASTER in the making.
    Me calling Cal PG&E: “my power went out”
    Cal PG&E : “we are sorry we can send someone out next month”
    😳Yes, what could possibly go wrong?

  4. Backstop my a**. This has been the end game all along. Imagine life with radical greens running PG&E and dismantling the power grid.

  5. Whatever we do the State must not pay one penny for PG&E cos this is it’s future —–
    Eventually almost every home and business will become 24/7 self-sufficient in energy ( with the introduction of new battery technology). Facilitated by a few Local Community Grids, especially for those without enough sun.

    PG&E’s $30 billion liability from the 2017 and 2018 fire seasons sprang from just 12% of the company’s Transmission and Distribution Network.
    The Utility has to announce to all of the homes and businesses within the 12% Network that they need to become independent of the Utility within 7 years ! At which point transmission to this 12% will be cut off! Thereby eliminating most of the risk of starting fires.

    Meanwhile the need for energy from the Utility’s Generating Plants will decline to zero over maybe 30 years.
    Similarly the need for all of its Distribution Network as customers dwindle to zero.
    (Local Community Grids may take over some of it but if so, their transmission network needs to be highly regulated).

    So during all this decrease:- Power Plants need to be decommissioned, Transmission Lines abandoned and Employees laid off !
    PG&E will fight it all the way !

    If the State takes over the Utility, the Tax Payer will be burdened with this huge loss.
    ( We can only hope that PG&E lay-offs get re-employed into the Renewables Industry — with the State’s help)

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