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crunchytech413

Can confirm. Deregulation in Texas is a total joke. Dozens of scammy companies vying to sell you the same power from the same grid with sales gimmicks and tricks. But ultimately still gouging you compared to areas with municipal/co-op power.


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FindMeOnSSBotanyBay

Until the grid fails because winterizing isn’t profitable, and people start freezing to death.


headbangershappyhour

People are dying here because replacing a $5 hook every few decades isn't profitable, causing the hooks to fail and drop power lines into dry tinder during high winds.


adjust_the_sails

Oh it’s profitable to do it just not *as* profitable, so they don’t do it.


topographyEtymology

Because those $5 hooks require millions in man hours. Let's not be so disingenuous here.


FightingPolish

Which is still cheaper than when they drop into dry tinder and burn to the ground.


topographyEtymology

If you go mountain climbing regularly you can see how out of the way some of these stations are. California should own their own utility because of that — it’s insane to expect a private company to try and best maintain units hanging off the sides of mountains or in the most remote areas, just because it’s going to be impossible to get good work from privately paid employees there


curiousengineer601

They should have never let them build these crazy lines, its a real problem going forward.


headbangershappyhour

Millions in man hours under what context? If you're talking about a special maintenance visit to each pole specifically to only replace the hooks, then sure, that's a lot of incremental cost. It's also horribly inefficient. If you make inspect and replace the hooks part of the repetitive maintenance program for the towers, then the additional time spent on each replacement is minimal, especially when replacements will be staggered throughout the system as a whole. Also, I fail to see were a few million in man hours outweighs repeated multi-billion dollar settlements.


topographyEtymology

Absolutely agreed, I was just pointing out why middle managers cut these things out, it’s not just $5 but a real incentive to cheat up on testing. Also a lot of these devices are so remote that it functionally is in the order of millions to use ~60 people’s time to test a specific device twice a year if ~20 of those people get put up in hotels, there are dozens of meetings, etc.


risbia

It's probably more than a single $5 hook as well... But yes, PG&E is not keeping up with their responsibility to maintain their equipment in general, cheap or not.


topographyEtymology

Well pretty simply it’s difficult to fully log, fix and keep track of things. PGE’s management can be improved, but organizations with brain power like NASA still don’t analyze maintenance data well


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FindMeOnSSBotanyBay

Yes, a “freak event” that was entirely predictable. Now because of their energy problems they’re asked to limit use until 8pm??? And it’s almost summer?


lostfate2005

Which is exactly what PGE says to do during summer


nullityrofl

Almost as predictable as any of the PG&E fires that have probably cost more lives. It’s the pot and the kettle. Really just a race to the bottom.


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Metasheep

Which one? 2010 or 2021? Or the new different upcoming freak event?


individualintersects

Not that it’s much better, but PG&E rates for residential are $0.29-$0.34 for up to baseline allocation and off-peak. The numbers you quoted are more aligned with peak and over baseline allocation pricing.


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individualintersects

Coming in with the facts, I like it. I’m not an expert in rates, but is that summer usage, and is winter a little lower?


curiousengineer601

The baseline allocation is a joke. Any normal family will go through that in the first 2 weeks


AdmiralPoopbutt

$ 0.095 for me. My 3 year fixed price contract expired so I had to roll into 12 month. I don't believe that price is achievable in a regulated environment. The Texas market tried to make rules which should allow easy comparisons between plans. The framework is fairly well designed with standardized offer forms. Companies will always push the limits and make convoluted plans though. The bigger issue is the direct marketing. People who get a cold call or a mail advertisement weren't shopping around, and may not compare plans before signing.


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Ipconfig_release

Catch is not all of Texas is deregulated. if you are on a co-op then that is your only option and cannot shop around.


crunchytech413

Co-ops are non profit so they are just billing to stay in operation. These “shop for your rate” for-profit companies take a base rate from the true electric utility provider and then apply sales gimmicks on top of it like “pay upfront and save X%, but if you move then too bad” or “use less than X kWh but if you go over then pay 3x the normal rate”. A lot of people were slapped with multi-thousand dollar bills during the epic 2021 freeze due to budget plans like that.


Cheese-Its_Christ

What the hell are you taking about? CA is **much** closer to a typical vertically integrated & traditionally regulated electric market structure than it is to retail choice (“deregulated”, though that’s a terrible term) states like Texas. The only retail choice that exists for CA residential customers is community choice aggregation (CCA), which is a very new concept and is not really impactful. Retail customers have *at most* two options: stay with your incumbent monopoly utility or get your generation from the sole CCA in your location (e.g., CleanPowerSF, EBCE in the East bay, MCE for Marin, etc). “Deregulation” is such an awful term that gets thrown around so much. All electric markets are heavily regulated, some just aren’t vertically integrated with monopoly utilities. And your claim about correlation between deregulation and increased rates is ridiculous. Texas has some of the lowest rates in the county (8.36 cents/kWh per EIA). Just looking at your map, New Hampshire and Vermont are a fantastic way to prove your statement wrong. Vermont (regulated) pays 16.33 c/kWh. Its neighbor New Hampshire (deregulated) pays 16.63 c/kWh. Seems like geographic correlation for energy prices and other factors are orders of magnitude more impactful that regulations. Price source: https://www.eia.gov/electricity/state/ Passion source: I’ve worked in the electric power industry for well over a decade.


the_arcadian00

Yeah, nobody on r/bayarea understands how the grid or power markets works... "PG&E bad" is the extent of knowledge.


SilasX

Well, I mean, at least that part is correct.


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Cheese-Its_Christ

I’m not sure what you mean by “deregulated on the utility side”, sorry. CA has an open access wholesale energy market, just like the vast majority of the rest of the country (https://www.ferc.gov/power-sales-and-markets/rtos-and-isos). These markets include both traditionally regulated and “deregulated” states. PG&E gets a guaranteed ROR on qualifying expenditures, which include capital projects, some O&M, things like that. Generators take the market clearing price of energy if they are committed in the CAISO market (ie, if they’re cheap to run, they’ll run and get paid for it at a rate that’s equal to or higher than their operating costs. If they’re expensive, they won’t run and get priced out of the market). With that said, generators can self-schedule in CAISO and take whatever price the market sets. PG&E (and the other IOUs in California) can just self-schedule, take the market clearing price, and then be made whole with the rates set by the CPUC. And I am 0% invested in any particular regulatory or market structure in CA. What I’m passionate about is correcting the rampant misinformation about the electric grid.


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Cheese-Its_Christ

I have read that HBS report before and I like it a lot. I’m not arguing about the merits of regulation vs “deregulation”, I’m just trying to clear up the rampant misunderstandings of the CA energy policy space (which, to even the biggest energy policy wonks out there, is clear as mud). You are exactly right that there have been a ton of failings that have led to California’s energy system being in the state it’s in. And I agree with just about all of it (particularly related to failings of the CPUC and their willingness to rubber-stamp a bunch of stupid PG&E plans). What the state did in 1996 (begin the process of “deregulation”) was substantially walked back after the energy crisis. We now exist in an ugly limbo between two systems that “work” (despite plenty of shortcomings in both approaches). But we are much closer to the “regulated” end of the spectrum than the “deregulated”. Frankly though, if I had a gun to my head and was asked what the single biggest issue with our state’s energy system is, I’d answer that we have *too much * (or at least horrifyingly convoluted) regulation. And I say this as a huge fan of the boring vertical integration/traditional regulation model in states like Iowa and Louisiana.


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Cheese-Its_Christ

I’d suggest referring to it as a “market region” versus a “non-market region”. Deregulation just refers to unbundling generation/transmission/distribution, where the same company can’t own all three parts of the process. But you can still have competitive wholesale markets if you have utilities that own all parts of the process. It’s just that if you go through deregulation, you *need* that market structure. So to be clear, there are market regions (MISO and SPP) that are comprised of states that have the same regulatory system that California had prior to 1996. So to come around to your original point: I think you and I actually agree that simplifying the state’s regulation setup (ie, going back to the pre-1996 landscape) would be hugely beneficial. What we have now is a primarily “regulated” construct with a laundry list of small but bizarre tweaks here and there that muddy up the waters terribly. Apologies for coming in so hot and arguing about the minutiae of some of these things, it just really is a subject of passion for me and I hate the term “deregulation” with a serious fire.


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Cheese-Its_Christ

I agree that grid defection has the potential to be a huge disaster for the traditional utility model, but I’m pessimistic that it’ll ever hit a scale that is actually disruptive. As expensive and shaky as our power is at times, it’s still so much cheaper and more reliable to remain grid-connected. But if that balance ever starts to shift, it will be a pretty clear case of the “haves” versus the “have nots”. And if that happens, grid power for the “have nots” will get *even more*expensive


unseenmover

Yes. Pete Wilson deregulated the energy industry during his governorship allowing what was to become PGE to buy up every provider in the State except So. Cal Edison..


FuriousFreddie

Ottawa? What does Canada have to do with this?


the_arcadian00

Yeah OP here doesn't know what he's talking about. Canada has nothing to do with California power markets.


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The_Big_Lepowski_

You mean Calgary? Also Houston and NYC.


calumin

The solutions need to be about aligning the company’s activities with the correct outcomes and to become more efficient. It’s not about being deregulated or regulated. Why does anyone think the holy grail of efficiency is to regulate the whole industry? There are examples of deregulated US energy markets working fine and there are examples of regulated utilities not being nearly as disastrous as PG&E. The whole topic is a side issue relative to the massive problem of higher PG&E salaries and compensation to reward decades of incompetence.


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the_arcadian00

That map is not remotely correct. If you want to see all the restructured electricity markets (also called "deregulated" energy markets, in reference to the fact that they are no longer controlled by **regulated** utilities, not because they are no longer regulated...), you need to search for a map of all RTOs/ISO. See the following map: [https://upload.wikimedia.org/wikipedia/commons/b/b8/Rto\_map.gif](https://upload.wikimedia.org/wikipedia/commons/b/b8/Rto_map.gif) The restructured nature of CAISO (the California ISO) has NOTHING to do with PG&E's failures. The restructuring of the California energy markets affected only the market for the supply of wholesale power. In other states (e.g., Texas), the wholesale AND retail power markets were affected, but monopoly utilities still own the transmission and distribution infrastructure. In Texas, you can buy your power from hundreds of retail electricity providers (REPs). In contrast, in California, you have one supplier (in NorCal): PG&E. PG&E is a still a monopoly utility in transmission, distribution, and retail sales. Due to the restructuring of California power markets, they now have to purchase their power from the wholesale power market instead of building their own power plants, but nothing else changed for them.


OneBeautifulDog

And Enron died a long time ago.


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OneBeautifulDog

Hence the reason why I wrote "AND Enron died a long time ago." I was agreeing with you and stating that the situation is tiresome, irritating, and should have died with Enron.


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SharkSymphony

CA’s expenditures last year were $264 billion. It’s nice to have a surplus, but that’s only a few months of buffer in a volatile economy. I don’t think we should be eager to spend it.


aBetterCalifornia

According to the LAO, the general fund buffer as a percentage of the budget is actually smaller now than pre-pandemic. There's a lot in Newsom's wish list, but what the legislature will give him may be a different story. https://lao.ca.gov/Publications/Report/4598


Hsgavwua899615

Iirc the buffer fund is capped constitutionally and its cap hasn't kept up with the growth in budget or revenue. We should really change that, 6 months of buffer time would be a huge boon to a traditionally boom-bust state like California.


jhonkas

so the government is going to take on unlimited risk in fires and also the cost to upgrade shit


kelskelsea

The government is already covering the cost of the fires


chatte__lunatique

Yeah we get fucked twice already. Once to cover the cost of firefighting and rebuilding and again to cover the rate increases PG&E tacks on after the government fines them for starting the fire in the first place


Educational-Round555

The surplus is due to the gangbusters stock market in 2021 and the fact that so many employees get paid in RSUs. Vesting RSUs automatically get taxed so a lot of people paid a lot more taxes due to this. The picture will be very very different next year.


NelsonMinar

Right. But we literally have $97B sitting in our pocket right now. It would be financially reasonable to invest $30B into a profitable company with that windfall. It'll never happen, for all sorts of reasons, but it makes financial sense.


chenyu768

Its a profitable business because its earns a guaranteed rate of returns on capital. IOUs are heavily regulated on profits and stockholders take a hit when they do something adverse. Unless they buy edison and sdg&e too youre just going to have all taxpayers subsidizing pge rather than shareholders. Rate hikes might decrease but itll be subsidized with tax dollars. And disproportionately at that without buying all ious. Also are we biying just the electric side or are we doing gas as well? Then weve got lrivate pipelines, producers, and independent storage providers as well. Might take the whole 90b plus some.


entity330

Citation needed. If you think tech employees generated an extra $90b due to income tax on RSUs, you really need to back that with data. This seems like you are projecting your personal situation onto an entire state.


dakta

Napkin math time. Assume people getting RSUs are having them taxed at 10% (people getting huge RSUs are often in higher brackets, but let's use 10%). Assume the entire surplus is due only to this factor (unlikely; we should expect a mix of contributing sources). RSUs that matured from previous year grants and vested last year would have to come to $930B in market value at time of vest. FAANG combined market cap exceeds $3T, almost 10% of total US stock market. AAPL saw 22.8B trades in 2021, at an average monthly closing price of $140, for an approximate total trade value of $3.2T. In 2021 alone Apple spent almost $8B on share based compensation, much of which accrues CA taxes at time of vest due to being granted to CA-based employees. Count for cumulative vesting for stock granted over the previous 4 years (which is their current vesting schedule for all RSUs per internet sources) the vesting value in a given year is higher than the spend due to valuation increase. Do the same calculus across CA-based tech companies and it's easy to see how many billions could be realized in RSU taxes alone in a highly inflated stock market. It seems unlikely that the entire surplus is due to RSU vests, but a pretty significant chunk of it could be.


entity330

Do you really think that $3T was paid to CA FAANG employees as vested RSUs? Again, citation needed. That doesn't mean make up more gibberish to sound like you have some secret insider knowledge that us mortals would never comprehend. It means show your actual data from a vetted source. You pretty much just claimed that FAANG paid half of all the public shares to employees (in CA, ignoring other states and countries) in the period of a single year...


alainreid

Why didn't we see a surplus after legalizing marajuana? Colorado was giving money back to taxpayers after the second year.


lettherebedwight

Also it was widely available when it was medical only to those who wanted it - I'm sure there was some extra business remaining but everyone that wanted to walk into a store to buy it basically could.


dookieruns

Because marijuana businesses don't last long enough to turn a meaningful profit to the state due to the excessive taxes here.


alainreid

You're saying that they give too much money to the state to give any money to the state.


dookieruns

I am saying they do not turn over enough profit to stay in business long enough to make a meaningful contribution to tax revenue. It would be like a recently barred lawyer or a new doctor dying after about a year.


_Laughing_Man

Not to mention almost zero reduction in black market production. Unfair competition + insane taxes = failing business


alainreid

It really sounds like the two of you are making guesses. It's actually difficult in the black market right now because of all the unfair competition from the legal market (lol).


_Laughing_Man

Lol I've only worked in the industry since before it was legal, but ok


imslowS55

These people are completely retarded. Internet incel goons that don’t understand basic business. If the business isn’t profitable and ultimately fails, then the tax revenue from that business is unsustainable. So it did not become part of a strong economy, only a small bonus for the state gov; while the company was in business.


GetMyCowTipperOn

Seems like it'd be a much better use of money to just adjust their incentive system to something that makes sense (free) and hire a few more folks to keep an eye on them. Then we can use the other $96.99 billion on something else.


nn123654

>Then we can use the other $96.99 billion on something else. Really it should go towards repaying part of the $542 Billion in state debt


gandhiissquidward

If there's one thing you can learn from the federal govt., the debt is made up and it's never gonna get paid.


MediumLong2

If the one thing you can learn from studying world history, it's that governments collapse when they get into too much debt. And the second thing you can learn from history is that every society that gets into a lot of government debt eventually regrets it.


nn123654

If it's so fictional try defaulting on the bonds and see what happens, you only need to look to Argentina, Sri Lanka, or Russia post-sanctions to see what happens. On some level I agree with you that sovereign debts are very different than personal debt, however with CA's: * They do not control the supply of US Dollars, so it's not the same as the Federal Debt. It's literally impossible for the US Government to run out of US Dollars since they can simply print more. Not so for CA. * The debt *does* have an impact on the budget because the interest must be paid. * What really matters is the percentage of the budget that goes towards interest payments. Paying off the debt is the wrong way to look at it. The main thing is the debt can't grow faster than the economy without hurting the state later on. * We will not run surpluses every year and should plan for the next downturn. * The State spent Billions on COVID, the 2019 debt level was $362.87 Bn


ThatMkeDoe

I've said it before last time this came up and I'll say it again... This is a non-solution. California buying PG&E solves exactly 0 of the issues that California is currently struggling with re: pg&e. There's already a heavy amount of governmental oversight dictating what pg&e can and cannot do, so it's highly highly highly unlikely that things would get better for the average Californian. Yes, you'd remove the for profit angle but then you'd add to the currently ongoing worker shortage that pg&e faces, you'd add in several high paying governmental jobs, many of which you'd probably have to re-hire for as the people currently working those jobs would likely rather stay private sector (higher salaries more flexibility etc). On top of that, all this would do is make all of pg&e's current infrastructure woes go directly to the state of California. Now California would be liable for damages due to faulty equipment that causes wildfires, the state would be responsible for fixing up hundreds of thousands of miles of power lines in remote areas, several power plants, etc etc. Sure the state can *theoretically* buy pg &e but they sure as hell can't afford to, it's like buying a second hand luxury vehicle from someone you ***know*** has deferred maintenance. You can afford it now, but my god you'll regret buying it when the mechanics bill comes up. Also it's not like this is magical money that just *happened* to be unclaimed by anything.... There's plenty else that California can and should spend it before buying a utility that will solve exactly 0 issues, and create an infinite amount more. For one, I really hope everyone is okay with the way the roads are right now, because buying pg&e would leave the state (now and in the future) with very little money to fix them.... Or to do anything else. In short, this is a terrible idea and a budget surplus is not magic money that the state has no idea what to do with.


_mkd_

> Sure the state can theoretically buy pg &e but they sure as hell can't afford to, it's like buying a second hand luxury vehicle from someone you know has deferred maintenance. You can afford it now, but my god you'll regret buying it when the mechanics bill comes up. We need to update the joke to say don't buy(out) a utility unless you can afford to buy three.


ThatMkeDoe

Given how many times this topic has come up... Yes yes we do!


curiousengineer601

This sounds like a huge bailout for PG&E shareholders. Seems like we could directly invest in renewable energy without buying PG&E


suckuh_punch

Confusing bailout with buyout. A bailout (as we’ve seen with airlines and banks) can be on-going. Whereas the buyout would be a one time payment to shareholders, who would then never see another penny of revenue from the power provider.


curiousengineer601

PG&E stock is at a definite low point at 12$ a share. Paying double the current price ( and taking on all the liabilities going forward) is both a buyout and a bailout for those currently stuck with the stock.


Alexa_Call_Me_Daddy

Who said anything about buying it over its current market value?


curiousengineer601

Well to do a buyout like this its going to go for a premium. Look at twitter or any other company that gets bought out. Its going at least 20% over current price.


proverbialbunny

That's normal for a buyout. It sounds like you're saying all buyouts are bailouts, which is not the case.


babybambam

What’s the alternative? Drive them out of business by not using electric and THEN domesticating the infrastructure?


curiousengineer601

PG&E is already basically run by the state PUC. A state buyout would just mean the state owns it. The same people, managers and infrastructure is still in place. No middleman is removed making anything more efficient.


techtpm

However, the state now also takes on the sole risk of capitalizing it (as opposed to private shareholders) and assuming the risks associated with running a public utility - remember how close PGE was to bankruptcy due to wildfires? While it could capture 100% of the profits (vs. the XX% or so it does now via corporate and income taxes), I think the money could be better spent elsewhere.


bluecrocsRcomfy

Probably money well spent installing solar on every home over 900sqft, those new condo constructions, apartment buildings, etc..


pug_walker

One would think, until you read about the new NEM3.0 proposal that would disadvantage any residential solar install. Why use existing, unused roof space when we have all that desert area to build a dedicated solar plant. /s


grothendieck

I thought the CPUC has indefinitely delayed voting on NEM3.0 because of the backlash.


pug_walker

Don't think so **or** the definition of "indefinitely" is up to interpretation. Seems to me like they are still pursuing it. > The CPUC decided to indefinitely delay its decision on the changes in February following significant backlash from consumer groups, trade bodies and Californian politicians, who called for a “dramatically revised policy”. **Now, the CPUC wants feedback regarding what the new system should look like**. Administrative-law judge Kelly Hymes reopened the record in a ruling on Monday (9 May) to garner insights on three separate areas, with **opening comments given a one month deadline of 10 June** (24 June for reply comments). It is looking for feedback on a “glide path”, which relates to “proposals to transition customers from the existing net energy metering tariff to a successor tariff”. [https://www.pv-tech.org/cpuc-admits-defeat-on-nem-3-0-seeks-feedback-on-new-proposals/](https://www.pv-tech.org/cpuc-admits-defeat-on-nem-3-0-seeks-feedback-on-new-proposals/) (emphasis mine)


curiousengineer601

I am not sure if individual solar is better than using parking lots and commercial buildings. But agree we should leave the desert alone


HappyHighwayman

A budget deficit is not the same thing as a budget surplus. Which one is it?


jamintime

Title meant to say "surplus" I think. Confusing because it says exactly the opposite.


mm825

I think OP intentionally got it wrong to provoke comments


HappyHighwayman

I never assume maliciousness when incompetence Is a sufficient answer


DarkRogus

Here's the about PG&E, the CPUC basically runs PG&E. When there's a rate increase, it's approved by the CPUC. When there's a dividend payout, it's approved by the CPUC. When there's political lobby, also approved by the CPUC. Upgrades and expenditures, approved by CPUC. Way too many people act like PG&E is like Chevron and has very little oversight when in reality it's the exact opposite. I know this is going to be unpopular here, but the reality is PG&E has the kind of governmental oversight that progressives like AOC and Warren want over other businesses where a government agency has a say and must approve rate changes, dividend payments, lobbying expenses, labor approval, etc.


wrennish

I think you've illustrated the problem that the CPUC is less an oversight committee and more a rubber stamp. They even got in trouble recently for not following transparency laws (https://www.abc10.com/amp/article/news/local/california/court-upholds-abc10-lawsuit-pge-regulator/103-0fe2160f-a620-45bc-a8cf-4e2f2d7de955) and the regulatory committee has previously been shown to be too friendly with the company it regulates (https://www.findlaw.com/legalblogs/california-case-law/lawsuit-reveals-emails-cozy-relationship-between-cpuc-pge/). This is not the kind of regulation that progressives want, as you claim. It's crony capitalism.


RostamSurena

I believe the technical term is [Regulatory Capture](https://www.cfainstitute.org/en/advocacy/issues/regulatory-capture#sort=%40pubbrowsedate%20descending)


FavoritesBot

Does the CPUC run PGE or does PGE run the CPUC


RostamSurena

[C.R.E.A.M.](https://www.youtube.com/watch?v=PBwAxmrE194)


HotTopicRebel

Yes, and it wouldn't change if bought by the state. State ownership address some problems, but not this one. For this, PG&E would have to be broken up.


Ochotona_Princemps

If you don't think the governor-appointed CPUC exercises appropriate control over PG&E, why would you expect anything different under wholesale public ownership? You'd still have electeds appointing a management board of some sort; not clear why one would expect a change in the quality of public governance. And if your answer is "no more private shareholders"; okay, instead we have private muni bond holders. Why is that meaningfully different?


mjk101

It’s not exactly 1:1 . The profit motive does take a toll. Viewing electricity distribution as a service and treating it as such.. like USPS… would drive down cost.


Ochotona_Princemps

That's basically the current structure: the CPUC identifies a target profit margin by looking at the cost of capital in the industry (i.e., the rate needed to induce investors to give PG&E capital), approves an expenditure budget they believe is reasonable, and then works backwards from that to set rates. If PG&E is operationally efficient, they beat the target by a bit; if not, they miss the target by a bit. A system with direct public ownership and capital provided by bond investors would be structurally quite similar; you'd still need to run the utility with enough margin to pay the bondholders for loaning the utility money.


FindMeOnSSBotanyBay

You’re missing the point - why have the middlemen at all? Get rid of the need for profit at all. Also in terms of capital, sovereign debt has gotta have way better rates than private.


Ochotona_Princemps

At that point you're just shuffling money around within the state government--okay, so the public utility doesn't raise its needed capital on the muni bond market, and has its capital costs paid directly by the state; how much does that increase muni bond issuance elsewhere in the state government to backfill the money going to PG&E capital costs now? Fundamentally, the state already has the control over PG&E it needs; the issue is the willingness to wield that control and face the consequences. The public/private distinction is not particularly meaningful in this context.


wadamday

You are spot on and the reality is PG&E is a convenient whipping boy for Californians to direct their anger at. Why would the government want to take that on?


mjk101

A lot of assumptions here on both sides of this debate. Your point is valid that shifting the burden onto the state directly may not yield lower costs to end consumers. Have any business schools done a proper financial analysis of PGE? I find it difficult to believe that neither Stanford, Berkeley, or UCLA have not produced anything. If they haven’t why not? The solution very well may be a nationalized electric grid, which would never happen in the current climate but how else can you drive down costs of distribution?


wrennish

I didn't say I wanted public ownership of pge. I was merely pointing out a flawed argument. Now you're trying to deflect from being wrong by claiming that I hold flawed positions that I never said I supported. Someone can point out your bad arguments without necessarily disagreeing with you. The end belief isn't the only thing that matters: how you arrive at a conclusion matters too.


Ochotona_Princemps

> I didn't say I wanted public ownership of pge. The context of this discussion is OP's proposal to have the state acquire PG&E, which frames how I was responding to your point. Interpret my use of "you" above in [the general sense](https://en.wikipedia.org/wiki/Generic_you) if it makes you feel better.


FindMeOnSSBotanyBay

In theory, because there’s no longer a profit motive, a return on investment for stockholders. And also public officials are in theory accountable to the people whereas in the current actuality PG&E is not held accountable.


Ochotona_Princemps

My point is if the CPUC is not "accountable to the people" currently, despite being made up of governor-appointees, why would you expect the governing board of a theoretically publicly owned PG&E to be more accountable?


FindMeOnSSBotanyBay

It’s a fair point, but I can’t see how that isn’t better than the status quo of profit motive.


Ochotona_Princemps

The profit motive isn't the main issue--given the CPUC structure, where PG&E is given a target profit margin from the CPUC on top of their approved expenses, it would be in PG&E shareholders' interests to spend a huge amount on fire prevention, charge a huge amount in rates, and then hit their margin without the downside risk from fire liability. The CPUC doesn't let PG&E do that, because they don't want the political blowback from super high rates. The core issue is the tension between the public's desire for low rates and its desire for no fires.


steffiliz

The Office of Energy Infrastructure Safety and the CPUC were both slammed for approving a PG&E fire mitigation plan with multiple critical deficiencies. Newsom’s hands are all over PG&E’s dealings with the state. No good can come from giving the state more control over PG&E.


DarkRogus

The CPUC is appointed by the Governor. There are 5 Commissioners: Alice Busching Reynolds, President (Appointed by Newsom) Clifford Rechtschaffen (Appointed by Brown) Genevieve Shiroma (Appointed by Newsom) Darcie L. Houck (Appointed by Newsom) John Reynolds (Appointed by Newsom) When you look at their bios, these are not Right Wing, MAGA Trumpers. Quite the opposite, heck Houck is pretty progressive especially when it comes to environmental issues and so are Shiroma and Rechtschaffen. So again, not sure what more you want.


wrennish

Never said I wanted anything. Just pointing out the obvious problems the CPUC has with independence and actual oversight. Newsom's appointing almost the entire board is probably part of the problem. As Oliver pointed out, he took a bunch of money from PGE in his campaign, and if you read the anti-transparency news piece I linked to, you'll see the CPUC claims it does what Sacramento tells them to do. I suppose if I want anything, it's a company that doesn't give out $5bn in dividends plus separate political contributions when its infrastructure is collapsing, killing people, ruining communities and other industries, and destroying air quality for over half the nation. I'm not going to pretend I have an answer because it's a complex problem. But I stand by what I said: the CPUC is a rubber stamp. You demonstrated that when you highlighted their track record.


DarkRogus

Fair enough. But it should also be pointed out that all 5 members are on the liberal side of the political spectrum and 2 / maybe 3 of them would be considered Progressives, especially on environmental issues, who are the rubber stamps.


kebangarang

Why should that be pointed out? Who cares about that other than you?


DarkRogus

You honestly think if these were Schwarzenegger appointees, no one would point that out, especially when one of the remarks was "It's crony capitalism."


kebangarang

If someone did, would that be a useful comment, or not?


DarkRogus

When someone says, "It's crony capitalism" the answer is yes because it's important to know who is involved in crony capitalism.


wrennish

I think it's useful to know who insofar as individuals are concerned. I don't think it's useful to discuss labels. People on both sides of the political spectrum are, and are capable of being, corrupt. They're human, afterall. And it's entirely possible for me to label myself however I want, but that may not be how I act in private. For instance, just look at Sinema in the Senate: Ran as a progressive Democrat, former Green Party activist, turned out to be a Blue Dog. Labels aren't useful because they overgeneralize and only go skin-deep.


DarkColdFusion

Also PG&E takes the heat. No one wants to own that. It's a big dry state. Fires are going to happen. Maintaining all that infrastructure is going to be expensive. Meeting all the renewable targets is going to be expensive. Basically a lot of the things that people are mad about are a big part of it existing. The state owning it means it's their fault. Instead when something goes wrong you get to blame PG&E.


spctommyboy

This. Pge uses the same equipment and infrastrucure as the rest of the country. same wire and transformers and etc as boston. Only our state recently has become hotter drier and windier. Transformers blow up faster than anywhere else. Wind and dry conditions turn the state into a tinderbox. Not to mention California kicked out the logging community years ago who cleared out large areas of deadfall. State parks and wilderness in california are majority federally owned preserves and the federal government refuses to spend money to clear out deadfall. On top of all this, PGE has agreed to legislation stating that any wildfire whose origin can be traced back to having started anywhere near pge equipment, PGE will be liable. And that's basically all wildfires. PGE is the fall guy for global warming. The company is supposed to replace it's entire infrastructure, control all vegetation over half of all of california, climate proof and meet all regulatory mandates, pay for all legal fees and cover payouts for every wildfire in it's jurisdiction, all from a position of bankruptcy, and without raising prices. From my perspective, PGE stopped being an independent company after the San Bruno bankruptcy and the California Government is just propping it up, using it as a sheild so they don't have to climate proof the entire grid, clear vegetation, make plans of action, or take any responsibility for damages. they find these ceos to come "fix pge" but really they just are people who are there to take blame and step down for big paydays when disaster strikes.


DarkRogus

Exactly. PG&E takes all the blame while the CPUC and Newsom who appointed 4 or 5 Commissioners act like it's not his problem.


aBetterCalifornia

What good is the CPUC when Newsom [micromanages] (https://www.youtube.com/watch?v=YTRX_SWw-9c) them after working with PG&E lawyers and lobbyists to save investors? Rubber stamped "safety certificates", etc? > [Newsom had inserted himself as “broker” of PG&E’s plan to exit bankruptcy. Bankruptcy documents show the company offered to support the plan only if its terms were “acceptable to the Governor’s Office.”](https://www.abc10.com/article/news/local/abc10-originals/pge-gavin-newsom-lobbiest/103-2fc7d4f4-a0e0-492d-ac1d-ec674e58a67b) The French Laundry incident, was a massive deal for the wrong reasons. It wasn't a big deal because Newsom was maskless, it was a huge deal because he was meeting with lobbyists for unsecured creditors of PG&E. Or remember when PG&E gas lines blew up some homes and it was revealed that the CPUC had ex-parte communications with PG&E about how the regulator would handle the situation? Thankfully Brown's administration swept this under the rug and no prosecutions took place.


LegitosaurusRex

And if PG&E doesn’t perform maintenance does CPUC make them, or does it do nothing while 90+ year-old hooks fall apart resulting in fires? The problem is PG&E management’s inaction on these things. They’re the ones who know what needs maintenance and how often.


kotwica42

California doesn’t have a $97 billion deficit FYI.


GaWdLy1

All it would take is one or two bad fire seasons to bankrupt the state or make it uninsurable to the risks presented by PGE. I mean, I think I agree with your sentiment, it's just that the business sense isn't there. The "doing the right thing for the people" sense is, though. It would cost a lot to buy PGE, and modernize the gas and electrical infrastructure to ensure safety.


Beautiful_Pepper415

PG&E is already basically a government monopoly (thus why it is so bad) , your idea is fun but the gov does not wanna manage the utility officially. And would lose a useful scapegoat


elcheapodeluxe

Yeah - can you imagine if the taxpayers took over the liability *directly* of running a massive utility in a changing climate environment?


Beautiful_Pepper415

Exactly. Hello higher taxes all day


Oo__II__oO

Higher taxes or higher utility bills. Pick your poison


DarkRogus

Yeap, basically the CPUC controls PG&E. Haven't see the actually video, but read an article and from what I read, Oliver was blaming PG&E for operating at a profit and nowhere does he mention that the CPUC approves the profit margin and the dividends for PG&E. But of course, that doesn't surprise me he left that part out because that wouldn't work in the narrative he created.


H2Broswim

PG&E is certainly a monopoly, but they aren’t a government one. The board that is supposed to regulate them seems woefully outmatched. As far as scapegoats go, I do agree that would be a reservation for most politicians, and almost commented that in my original post. But also people are starting to blame California politicians for PG&Es mistakes, wonder if they might sway the other direction if that trend continues. Being the governor who signed off on killing the company starting Californias wildfires could be a good headline for a candidate to run for national office on.


Ochotona_Princemps

> PG&E is certainly a monopoly, but they aren’t a government one. This is totally wrong: the government, through the CPUC, controls the rates PG&E is allowed to charge, sets their target profit margin, sets the customer base they must provide electricity to (i.e., PG&E isn't free to leave a market or quit serving certain areas), and approves PG&E's budget. PG&E is a de facto public entity. It is kept in place by electeds to act as a hate sponge for the public that doesn't want to accept the tradeoff between rates, fire prevention, and utility liability for fire damage.


nielsbot

They still have a profit motive and it’s tied to them building infrastructure instead of maintaining it. Watch the John Oliver video.


Hyndis

Any and all profit is approved by the CPUC. The CPUC controls how much money PG&E spends on maintenance. PG&E is a fantastic scapegoat so state politicians can pretend that PG&E is a mustache twirling villain and that the state has no control over it. In reality, PG&E is merely a puppet, and the governor and state legislature are the puppetmasters.


nielsbot

My main point is that they make more (regulated) profit based on infrastructure spending, necessary or not, and less profit (regulated) for doing maintenance. The legislature/PUC should change the incentives. Watch the video. https://www.youtube.com/watch?v=C-YRSqaPtMg


Beautiful_Pepper415

You are wrong there the California gov sets pge's rates and profit margins. It is basically run by the gov


Beautiful_Pepper415

It would also be a waste of money to be honest using government money to kill pg&e. Usually you buy companies to make more money. This be like lighting the money on fire.


Beautiful_Pepper415

The pg&e union is pretty strong though and donations. I think that is one reason they are relatively untouchable


BadBoyMikeBarnes

Yes, PGE + CPUC + IBEW https://www.kqed.org/news/10564656/10-emails-detail-pges-cozy-relationship-with-its-regulators Much better to take the whole joint over IMO.


Dust_Parts

PG&E is already run by state politicians. If you look at the amount of no-bid transmission contracts they land, it’s incredibly evident. There’s no reason to buy something you already own lol


OneBeautifulDog

Is that why PG&E is are so incompetent?


Dust_Parts

There’s been about two decades of tax dollars that were appropriated at the state level that should’ve went into expanding the grid infrastructure in Marin and Los Angeles counties. This never happened but nobody wants to discuss it since those tax dollars went into random social wellness programs or mysteriously disappeared into “special projects”.


OneBeautifulDog

God how I love "General Funds" /s


FindMeOnSSBotanyBay

Hah, sounds exactly like what the telcos did in the Northeast. $$$ to expand access and new infrastructure, telcos pocket it instead.


mgesczar

California should give that money back to the tax payers in the direct proportion in which they paid taxed. The surplus just means they are collecting too much in taxes. That money doesn’t belong to some politician to use as their political action money. It belongs to the people who paid it and the state should give it back


idkcat23

Most of our surplus is capital gains and we likely won’t have much (if any) investment gain next year. We should try to keep at least some of this surplus unclaimed, because it’s unlikely to happen next year.


MarkTwainsSpittoon

The thing is that PG&E is really made of four parts (to over simplify): 1. Gas Distribution and Sales Company. 2. Electrical Generation Company. 3. Long Distance Electricity Transmission Company. 4. Local Electrical Distribution and Sales Company. I think the wiser route might be to divest/purchase/eminent domain from PG&E everything but the Electrical Generation Company. Then pass a law that PG&E can only sell generated electricity to the State's system, and under a highly regulated price structure. This removes the dangerous components from PG&E, and avoids the tricky business of having the state be an electrical generation market participant and have to take possession of PG&E's crumbling generation facilities.


bumbletowne

We should set up a rotating fund to alleviate bond stress. We should DEFINITELY invest in infrastructure. Buying pGE or forcing PGE to not be traded would be great.


SeaworthinessSorry66

The government isn’t necessarily gonna do a better job…case in point DMV


ElSapio

Only people that could fuck it up more than PGE is the California government


DreamArcher

How about building that $1.8B desalinization plant they just voted against too.


uncertainlyme

How about use the surplus to pay farmers not to produce high water consuming crops like almonds this year. Instead of charging private water consumers for overages in an effort to cut water demand.


211logos

No way. They should just seize it. Given the criminal (literally; they've been on felony probation) history of this outfit like any cartel the gov't should have just seized their assets, as fruits of their criminal behavior. They mismanaged and deferred maintainance, resulting in lost lives. If you, dear reader, had caused similar havoc I guarantee a judge would probably have given you a proportionately higher financial penalty. Then we can use part of the surplus (remembering that not every Californian lives in PGELAND) to modernize and maintain that grid.


Bluewombat59

I’m not sure SoCal would agree PG&E would’ve a good investment since they have SoCal Edison & San Diego Electric.


Commentariot

There should not be a bunch of profit in public utilities. Power, Water, Education, Healthcare, Internet Access, Roads, Public Transit, Defense, Law Enforcement these are all government functions. The better they are they are the better off everyone is.


madalienmonk

The funny part is, if CA took over PG&E, it might *save* money because the rules for suing a state are different (read, fucking hard/impossible). So if they were to causes a fire after, how easy would it be to sue CA? Not a lawyer so maybe someone can fill us in [https://www.taylorring.com/resources/civil-suits-government-entities/](https://www.taylorring.com/resources/civil-suits-government-entities/) >Can you sue the government for negligence? > >Yes, you can – but it’s not always easy. There is a completely different set of rules that apply when dealing with public entities such as cities, counties, school districts, public employees or public highways. > >Unlike private companies, they have immunity from being sued under certain laws, and the amount of time allowed to file a lawsuit against them is greatly reduced.


terracnosaur

It's a publicly traded company. You don't need to buy it, just enough to have a controlling share.


perpetuatinstupidity

IMO, State AG needs to make PGE sell off and do right, then throw their board of directors in prison. But it won't happen.


SecularHumanism92

I thought California had a budget surplus? How are we gonna buy PGE on a budget deficit?


ostensiblyzero

Fuck that. They should have been nationalized when they were facing bankruptcy.


redshift83

The idea that the government of California will do a better job than a private company flies in the face of all of my experiences with California.


FuriousFreddie

Many examples of this being done well in California and elsewhere: Silicon Valley Power in Santa Clara, Sacramento Power, Seattle City Light, Tacoma Power


Optimal-Soup-62

While I hate PG&E, public utilities don't have a great track record either.


fitzcarralda

Tennessee Valley Authority does pretty well


rlaptop7

Most real PUCs get great reviews until they get privatized.


mixmastakooz

My experience with them (a cooperative in Missouri) was that they were great: think of it as a credit union but for energy! I think turning pg&e into a public cooperative would be amazing.


FuriousFreddie

Yes they do. Look at Santa Clara’s SiliconValley Power. Rates are a fraction of PGE and its grid is well maintained by all metrics. It is one of the reasons why so many companies have major operations in Santa Clara. More examples: Seattle City Light, Tacoma Power, Sacramento Power, etc


Hyndis

Thats because Santa Clara outsources all of the risk to PG&E. They use the exact same transmission lines and power plants as PG&E does, but because they're a separate business entity they can pretend to have clean hands. Its like companies that brag they don't do any animal testing on products. They might not do the testing personally, however they do rely on testing done by other companies to know what is safe and what isn't. They're hypocrites.


FuriousFreddie

It’s true that they do that for power sources outside Santa Clara. However, this means one of two things: 1. PGE undercharges them for distribution. Unlikely, since they are a private company and can charge them whatever they want within what CPUC allows which is basically whatever they ask for. 2. Santa Clara’s utility operation is so efficient that they can outsource this to a private company at a rate profitable to them and STILL offer consumers rates lower than that same private company which doesn’t outsource it.


walker1555

What sources are you using to draw this conclusion.


suckuh_punch

Whataboutism


vintagebat

Or to build an alternative. Buying PG&E would mean maintaining massive amounts of ill-conceived and unsustainable infrastructure. Build solar microgrids, offshore wind farms, and grid scale battery storage instead.


ejwu

And desalination plants too


DieTryin510

that surplus won't even cover the high speed rail project... the original projection for this project was $33B...now its $94B...by the time a passenger is able to ride from SF to LA...I surmise it'll be year 2050 and the total cost will be $1T


Juan_way_turn

How about just don't overtax? Yall cool with being overtaxed? You don't look at the prices and regulations and wonder wtf? You don't get notices from recology or the utility company and say wtf? You don't hop on the highway and see express lane rates and say wtf? You do ask yourself wtf is going on when it costs $500 a year to register a vehicle? Damn near every state that only costs $50-100. Wake up.


Honest_Art_3266

I never understood why the government privatizes critical infrastructure. Can private business do things more efficient and cost effective than the government? Probably. But their prime directive is capitalism and making money. They're going to do what is right for their shareholders, not the residents of the state(s) they serve.


anonoman925

Still stuck with shit infrastructure. Who owns the solar farms? CA? It’s just better if CA puts panels on everything and makes PG&E as close to useless as possible. The fires are from unmaintained lines. Which should be modernized (buried) anyways.


[deleted]

PG and E gets away with murder here.


runsnailrun

Sure PG&E is a complete shit show, though I have real concerns the State would be an improvement. Look at the EDD. An estimated $31 billion paid out in fraudulent claims. If that holds true or even close to that amount, it will be the largest case of fraud in the history of the United States. Sure they were swamped with claims. Now, before the pandemic I had surgery and used the state disability insurance, which EDD runs. Fyi, all W-2 employees in California are required to pay into. It was a complete shit show then too. At the time unemployment was at record lows so they should have been able to tackle that. Nope, it took them 4 weeks for the first payment, then I received weekly payments for 2 weeks, then nothing for 6 weeks, then I received a partial payment. It was like that for the full 6 months. A person couldn't get them on the phone then either. I had to drive 25 miles to stand in line at one of their offices to speak with somebody to try and straighten it out. I needed to make three trips because they said the problem was resolved each time, nope. My doctor's office was shaking their head too, saying this was a common problem with EDD. Fire all the administrators, immediately. If that sounds heartless think of that hundreds of thousands of people that have suffered, and are still suffering because of their complete incompetence. A few weeks the local news was reporting they still had 350,000 people cut off from disability benefits because there was so much fraud they had to lock it down. I don't think they're independently wealthy. It's almost as if they're trying to feed the homelessness problem. That's far from the only dysfunctional agency in the state. I've been trying to get my California professional license renewed for 4 months. It's a fairly simple straightforward process, wtf is going on. I've heard similar stories from others attempting to renew their professional license. The state of California running our energy grid, no I don't think so.


Oo__II__oO

It'd be interesting to watch the PG&E execs try to inflate the value of the stock price, only to have CA apply eminent domain


Soundslikeshit_

Counterpoint - the CPUC failings give us insight into how poorly oversight of a state run utility would be. Also, if the state isnt willing to levy criminal charges for manslaughter in the Paradise case, I can only imagine the immunity state officials would have. That being said, I honestly dont know if this would feasible or not.


Dr_Lebron

What actually should happen is PGE surrenders themselves to the State of California for no fee.


username_6916

> All for “free” to the taxpayers as the surplus has already been paid. Umm... That's not how any of that works. It's not even remotely 'free', that's all taxpayer dollars. > You cannot tell me that the spinsters in politics would have a hard time painting this as a heroic move that would lower peoples energy bills, and accelerate the transition to renewables. Oh, the politicians would paint it as such for sure. But these are contradictory demands: Adding more solar to the grid is going to become exponentially more expensive with the need for big capital investments in pumped hydro storage everywhere. Or we'll just have to accept that we just will not have power at night. > Claims that household bills will decrease as the “middleman” is cut out and household stop paying so much a “premium” over generation costs could be used to fight back at critics pointing to that. In which case we're going to make all PG&E employees civil servants.... Complete with their unions and all of *their* lobbying power. Plus, they'd now be subject to prevailing wage requirements and the like too. Plus it would be that much harder for state PG&E to fire under-preforming employees. I'm not convinced that we're going to end up with a cost savings here. Or with a higher quality service either.


TheColonialist

You think PG&E is bad now let the people who have you LA and San Francisco run it.


blahblah98

The largest city/county economies in the planet's 5th largest economy. A surplus under a democratic governor, like Jerry 'Moonbeam' Brown before him. Whaaa? Funny how regressives can't explain the cognitive dissonance that Gov't, business & society all run better under social democracy, lol.


beez_y

CA should seize PG&E, cash out stockholders at whatever price they originally paid for their stock.