Thomas Elias: When punishment really isn’t; PUC does it again
A bit of shameful history repeated itself the other day, when the California Public Utilities Commission announced it was punishing the felonious, bankrupt Pacific Gas & Electric Co. for its conduct prior to the deadly fire seasons of 2017 and 2018.
The commission, empowered to set rates and supervise virtually all aspects of utility companies’ activity, feverishly announced it would forbid PG&E from charging customers for the equipment it lost during the Wine Country fires and the even more harmful Camp Fire that decimated the Butte County town of Paradise.
PG&E’s “penalty” is to be $1.675 billion. Of course, it’s not paying out that money the way an ordinary citizen would if fined for some kind of crime. Rather, the money will allegedly be spent to mitigate future wildfire risks, including tree trimming, and for the company to conduct community meetings relating to wildfire safety.
The last part of this PUC decision seems akin to instructing Charles Manson or Richard (The Nightstalker) Ramirez to conduct seminars on how to avoid getting murdered.
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But there’s more: Not only will PG&E be forced to spend the money from this penalty on work it should have done decades earlier with funds already collected for routine maintenance, but mere days later, the company was awarded a 3.4 percent rate increase that will shortly be costing customers more than $5.50 per month extra. This will amount to more than $500 million yearly, meaning PG&E will recoup its supposed penalty within about three years.
Some penalty. Of course, PG&E’s customers saw something almost identical just five years ago. Back then, the PUC fined the company $1.6 billion for negligence leading to the 2010 San Bruno gas pipeline explosion that killed eight persons and destroyed dozens of homes.
The huge utility, America’s largest power provider, was later criminally convicted in federal court for the San Bruno explosion and is still on probation. But no responsible executive ever paid a fine or served even one day in jail for the company’s crimes.
That time, PG&E was forced to spend most of the fine money to improve its gas transmission system, with less than a third of the funds going to the state. Both that fine and the new assessment amount to forced investment, not punishment.
In fact, these fines and the PUC’s much ballyhooed decision to limit PG&E’s profits and those of the state’s two other big privately-owned utilities (Southern California Edison and San Diego Gas & Electric) to merely a tad over 10 percent are window dressing designed to make both the companies and the PUC look good.
What company wouldn’t be delighted with a guaranteed profit of more than 10 percent of every dollar it invests in equipment or infrastructure? This can amount to billions of dollars when new transmission lines are built to bring power from distant solar thermal farms in the California desert to the big cities in the service areas of each utility.
The profit decision was another in a long series of proceedings where everyone knew the approximate outcome in advance. The utilities ask for enormous profits (in this case about 16 percent), which the PUC cuts nearly in half. Then the commission brags about how it’s protecting consumers, while the companies can boast to shareholders about their profitability.
All this for utilities that have not in recent years come close to demonstrating why they deserve the monopolies they hold in vast service areas. If this is punishment, most of the world’s big corporations would love to be punished.
The bottom line here for PG&E and its fellow utilities is that they collected many billions over many years for maintenance, but instead spent much of it on other things unrelated to maintaining their systems and making them safer — all while the PUC never policed them adequately.
To call the spate of decisions and settlements of the last month or so any kind of punishment is a bad joke on millions of Californians whose money the utilities have consistently misused for decades.
Email Thomas Elias at firstname.lastname@example.org. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, go to http://www.californiafocus.net
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