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

PG&E Would Become a Public Utility Under Newly Introduced Bill

The utility company would be government owned but privately operated

By Evan Symon, February 3, 2020 4:01 pm

California would take control of the bankrupt electrical provider PG&E under a new bill introduced in the Senate on Monday.

Under the bill, introduced by Senator Scott Wiener (D-San Francisco), current shareholders of PG&E would be forced by California to sell their shares to the state, assuming control via eminent domain. Municipal bonds would be used to initially pay for everything surrounding the takeover. A state power authority run by Governor-picked members would lead the company temporarily before transitioning into a seven member municipal board. Each member would represent an area of PG&E’s coverage area within the state based on an equal population ratio.

However, under the bill, PG&E would be operated by a private entity (public benefit corporation). This would enable all employees to not be listed as government employees and would have the blame for any future wildfires caused by the company to be paid for by the municipal board and ratepayers, with California escaping any fault.

Senator Wiener largely modeled this setup based on another public utility, New York’s Long Island Power Authority (LIPA). LIPA has been running under the public and board system since 1985 and was shown to be successful after LIPA took over an electrical transmission system on Long Island in 1998.

The bills’ introduction comes less than a week after Senator Wiener promised to have a bill introduced on a PG&E takeover ‘soon’.

“PG&E is a failed utility with a track record of prioritizing profits over safety,” said Wiener to the press on Monday. “It’s time for a new start.”

In an earlier press conference, Senator Wiener also focused on the reasons for the takeover. He said that the terrible company leadership and the deplorable infrastructure conditions were just too much for the state to not takeover the company.

“PG&E is a failed company. It is an irresponsibly run company,” stated Senator Wiener. “It has allowed its infrastructure to completely deteriorate to the point that it is causing wildfires. It has just allowed its system to spiral out of control.”

“It is more beholden to Wall Street and the shareholders than maintaining its system and providing safe and reliable service. PG&E operates a monopoly as a privilege granted by the state of California, and that privilege can be revoked. I support public ownership of PG&E.”

Governor Gavin Newsom. (Kevin Sanders for California Globe)

Governor Gavin Newsom has also been in favor of the plan. Since November of 2019, Newsom has called for a state takeover. In press conferences, Newsom noted that PG&E had caused the deadly Camp Fire, was bankrupted, and caused mass blackouts as a way to suppress wildfires despite causing misery for millions of customers all in the span of a year. Just last week he revealed that he was still completely on board with the idea of a state takeover.

“We are making progress on governance, we need to make progress on financing,” announced Newsom last week. “If we don’t see progress in the next few weeks then we’ll be laying out the architecture for a very detailed plan for a state takeover.”

“It has to to be completely re-imagined, completely transformed company. If PG&E can’t do it, we’ll do it for them.”

Senator Wiener’s bill also comes less than a week after his Senate Bill, SB 378, was passed, making PG&E and their shareholders solely accountable for all wildfire damages. PG&E itself underwent major reforms Friday to appease Governor Newsom, changing company rules to have at least half the board members to live in California.

PG&E currently has until the end of June to escape bankruptcy before the state takes the takeover into it’s own hands, barring Wiener’s bill being passed and signed into law sooner.

In addition to the new bill and the Governor’s June threat, PG&E is also facing city specific takeover threats from San Francisco and San Jose. San Jose’s plan has even gained more and more support since Mayor Sam Liccardo first proposed his plan in October.

Wiener’s bill, despite Governor approval, has already seen an outcry from other utility companies, business leaders, and even PG&E employees. Many are upset about the government taking over a private business, while others have said it would only lead to an equally poorly run company. Many PG&E workers have been apprehensive of any changes because of possible retirement, benefit, and pay changes, although Wiener has pointed out there would be no changes under his bill.

“For me, protecting these workers is a top priority. Everything will be the same, but they will be working for a publicly owned utility instead of an investor-owned utility,” said Senator Wiener during a press conference. “I have no desire to harm the workers and we want to keep them completely whole.”

The new PG&E takeover bill will enter Senate Committee voting in the coming months.

Evan Symon
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One thought on “PG&E Would Become a Public Utility Under Newly Introduced Bill

  1. Don’t let this communist take over of PG&E take place. It’s just another attempt by Newson to get his hands on anything that can make money for the state. Tell Newson to get rid for the state imposed mandates on the company so they can become profitable again!!!!

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