Home>Articles>San Jose Proposes Leaving PG&E And Creating Its Own Public Utility

San Jose Mayor Sam Liccardo. (Photo: Wikipedia)

San Jose Proposes Leaving PG&E And Creating Its Own Public Utility

PG&E has said that they will not sell to the city, but may have to under bankruptcy law

By Evan Symon, October 25, 2019 3:33 pm

The City of San Jose, Pacific Gas and Electric’s largest covered city, may soon have its own electrical system, due to frustration over numerous planned blackouts during the last several months.

San Jose Mayor Sam Liccardo presented the plan to the San Jose Rules Committee late Wednesday. The plan states that the city should buy all of the bankrupt PG&E’s electrical utilities and create their own consumer-owned public utility, similar to several other cities in California such as Los Angeles and Pasadena.

Other cities are also currently weighing in on taking over electrical duties from PG&E following the planned blackouts, including San Francisco.

San Jose’s proposal would allow the city to not endure any further PG&E planned blackouts. The blackouts have heavily affected Northern California, with San Jose itself losing $500,000 in lost business and tax revenue due to having no power.

“We need to align the financial interest of PG&E with the public interest,” said Mayor Liccardo after the Rules Committee meeting. “Customer-owned utilities don’t have to pay federal taxes, they don’t have to pay shareholder dividends, they can access capital at much lower costs and that is going to be critical for us in the years ahead, given the extraordinary investment that we’ll need in the system.”

City of San Jose may create their own consumer-owned public utility. (Flickr)

PG&E responded to the proposal by saying that no part of PG&E is for sale, and repeated that they have a commitment to their customers. However, due to PG&E’s bankruptcy, the decision to sell or not to sell isn’t PG&E’s anymore. The bankruptcy court has that authority, as Mayor Liccardo noted.

“Although PG&E has stated that the company’s assets are not for sale, in fact, they’re in bankruptcy court,” said Mayor Liccardo. “They are for sale. And whether they like it or not, they are at the mercy of a bankruptcy court.”

Local reaction has been mostly positive, with many saying that they want to get away from PG&E as a provider due to mismanagement, allowing planned blackouts to happen, their bankruptcy, and poor customer service.

“The sooner we get away from them, the better,” said San Jose Resident Ricardo Reyes. “Nobody likes them for what they’ve been doing, but we haven’t had a choice. Now we do.”

San Jose is also looking into building its own infrastructure as another option for electricity following a break from PG&E.

The proposal was accepted by the rules committee and will go before the San Jose City Council on November 19th. PG&E representatives are planned to be in attendance.

Evan Symon
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6 thoughts on “San Jose Proposes Leaving PG&E And Creating Its Own Public Utility

  1. This proposal is great insofar as local distribution is concerned, but does nothing for a) source of actual electricity and b) high voltage transmission from that source. Given that high voltage transmission from power plants, and high voltage distribution to major substations, is the main fire risk, PSPSs to address those risks will continue until a) major portions of the transmission & distribution network are undergrounded and/or b) serious forest and vegetation management policies are adopted and implemented, which get after the excess density of forests and undergrowth. Buying out PG&E’s local distribution grid does nothing to address those major problems. And San Jose does not want to get into the high-voltage transmission business, due to utilities’ strict liability for fires!

  2. Keep in mind another factor. Affluent cities such as San Jose are where power companies such as PG&E make most of their profits. These cities have the largest demand for electricity within the smallest geographic area, as well as customers well able to pay high rates. PG&E will fight this tooth and nail, although their bankruptcy ploy to get out from under billions in lawsuits will make fighting hard. PG&E needs money and San Jose is the most ready source of that money.

    “San Jose is the county seat of Santa Clara County, the most affluent county in California and one of the most affluent counties in the United States.” https://en.wikipedia.org/wiki/San_Jose,_California

  3. It could be a leap into the 21st century for us. It would be an opportunity to develop a distributed grid. It should be a microgrid that could be integrated with neighboring microgrids. Now that the coulda, woulda, shouldas have been generally acknowledged the real work begins.
    To dismantle our outdated macrogrid and create a is a massive undertaking that requires public and private partnerships, new methods of regulation, training for skills that emerge from deploying new technologies. We oughta do this.

  4. Greens are convinced that high energy taxes are the way to turn down the global thermostat. What would a bunch of screaming greenies do with a utility company? We may find out!

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