GUEST COMMENTARY--What does a State Assemblyman from Pasadena, a utility company, and the biggest fire in California history have in common?
About $10 billion dollars.
Chris Holden spoke before an audience of roughly sixty constituents, employees, and party-goers in a little tent behind his office building early Thursday evening, drawing laughter from the crowd with a joke about the catering and his growing appetite. Under heat lamps and a $500 rented chandelier, Holden recounted a successful year, listing ten bills he had helped pass, including Senate Bill 1, a provision for “fixing potholes” in the area. It was all very quaint, pedestrian, and above board.
What he didn’t mention during his speech, however, was the elephant in the room. As the crowd inside the tent cheered and laughed, insulating the Assemblyman, a separate crowd began to gather down the hall.
Fifty feet away beside a long table of pastries and beef sliders, activists united in the lobby of the office building to sing modified holidays carols, many holding signs like “PG&E Kills,” and “No Bailout For Shareholders.” They were there to talk to anyone in the Assemblyman’s office who would speak about his latest proposed bill: a billion dollar PG&E bailout.
Holden himself at first refused to speak with the activists, eventually sending one of his field representatives out to run interference, pledging that the politician understood their concerns and agreed with some of their ideas.
But the chasm between Holden’s supporters under the tent and the activists inside told a different story. Even as the field rep spoke with activist organizer, Lauren Steiner, California Highway Patrol, a Pasadena city cop and building security stood at the perimeter of the crowd acting as a barrier between the two parties and in one case, even prevented an activist who had actually voted for Holden, from joining the curated crowd within the tent.
Sidestepping the tens of thousands in campaign contributions that Holden has received from PG&E, the Assemblyman explained his reasons for drafting the bill earlier in the week using Enron’s dissolution as an example: “The ratepayers of Pasadena were going to have to pay more for the utility cost… obviously that didn’t happen. Our ceiling in terms of cost actually became the floor because our prices continued to be lowered… We were able to raise all this money and rebate it back. So, there is value to that. But that point of uncertainty, there had to be a decision to put resources on the table.”
To which a constituent responded, “You take the profit motive out of any entity and it simply becomes a service for the people. That’s the cost of doing business.”
In his lumbering baritone, Holden stammered, “Yeah and I think there is a proposal on the table… well I don’t know if it’s on the table yet — “
“Let us know and we will support it.” The constituent fired back, to which the room resounded in agreement.
So, the main argument Holden presented actually cited a precedent of a similar case in which breaking up a utility monopoly financially benefited the city.
PG&E, which has admitted to causing more than 2,000 fires in California since 2014, have turned to California lawmakers to help prevent the utility giant from declaring bankruptcy — and with some success. S.B. 901, a bill shifting a significant burden of the debt to PG&E customers, was already signed into law by Gov. Jerry Brown in September.
A loophole in the law did not cover 2018 fires, Holden’s bill hopes to rectify that by shifting liability away from the utility company altogether.
With insurance claims from just two fires in 2017 already totaling $15 billion dollars, PG&E is looking for ways to limit its liability. One such possibility is determining that the northern California monopoly maintained state safety standards in locations where an incident was recorded. Lynsey Paulo, a spokesman for the company said in an emailed statement, “Nothing is more important than the safety of our customers, employees, contractors and the communities we serve.”
Looking at the numbers, however, indicates that PG&E is responsible for five times more fire incidents than its southern California counterpart, Edison. While both utility companies serve more than 15,000,000 customers respectively, PG&E was responsible for 1,552 fires between 2014 and 2017, while Edison was on the hook for 347.
Holden’s bill is expected to go public in the coming weeks. He still has time to weigh the frustrations of the voters against the concerns of PG&E lobbyists in Sacramento. What he does next is anyone’s guess.
To view these events in hindsight will only lead to a solemn shaking of the head. The billions of dollars now in question to repay the victims of all these fires could have been spent running the most at risk power lines underground, drastically reducing the risk of incident. Instead, the focus of PG&E was on the profits of its shareholders rather than on investment in the technology that would have avoided these catastrophes in the first place. In fact, after raising rates in the first quarter of 2017, they saw their profits nearly double overnight, prompting them to file a further request for an electrical transmission rate increase with the Federal Energy Regulatory Commission.
And now a company that privatizes profits is seeking to socialize losses — and our elected officials are holding the door wide open for them.
Frankly: it’s a disgrace.
If you think that Assembly member Chris Holden should NOT introduce this bill to bail out the utilities when the Assembly reconvenes next month, call his office and leave a message to that effect at (916) 319–2041. Be sure to let his office know if you are a constituent or a ratepayer.
(Ken Franklin posts at Medium.com.)