California ponders state takeover of PG&E

A year of near-constant bad news continues for Pacific Gas & Electric Company (PG&E)—the SF-based utility that services most of California—as state regulators announced last week they’re considering an array of eyebrow-raising reforms that may include breaking up the company or transforming it into a public entity instead.

The California Public Utilities Commission [CPUC] handed down a ruling Friday that in the coming months it will “examine PG&E’s current corporate governance, management, and structure to determine the best path forward for Northern Californians to receive safe energy service.”

While that may sound dry and somewhat opaque, the details of what that process may mean are potentially game-changing:

Should some or all of the existing PG&E and PG&E Corp. Board of Directors be replaced; [...] should PG&E’s natural gas and electric distribution and transmission divisions be split into separate companies controlled by a holding company ; should PG&E’s corporate structure be reorganized with regional subsidiaries based on regional distinctions ; should the CPUC revoke holding company authorization so PG&E is exclusively a regulated utility ; should some or all of PG&E be reconstituted as a publicly owned utility or utilities?

The possibilities of breaking up PG&E or turning it into a public utility would have the most sweeping effect on the company and state. PG&E presently operates as a regulated monopoly.

Photo by Brock Keeling

The potentially big regulatory moves come after and in response to a series of particularly painful PR hits for PG&E, most prominent being the very real (but still undetermined) possibility that PG&E equipment and policies may have started the deadly Camp Fire that destroyed much of Butte County and killed more than 80 people this year.

This just a year after Cal Fire concluded the utility did spark some of the devastating 2017 wildfire, including the Tubbs Fire that wiped out entire neighborhoods in Santa Rosa. It’s also possible that PG&E contributed to the Woolsey Fire in Southern California.

[Correction: Cal Fire faulted PG&E for several North Bay wildfires, but the Tubbs Fire is still under investigation. PG&E does not services the Woolsey Fire area, which might have started as the result of Southern California Edison equipment nearby.]

Slightly more obscure but potentially even more damning is the more recent news that the utility faked thousands of gas pipeline safety inspections for years, even while defending itself over a 2010 gas explosion that killed eight people in San Bruno.

“Every year it’s another disaster,” San Mateo-based State Senator Jerry Hill said in a November interview, calling the utility “too big to succeed,” a phrase used previously by CPUC President Michael Picker in 2015.

The state agency notes that “parties may present other options than the ones listed above” in the coming months and that “CPUC must have more information and analysis from a range of perspectives before it can consider implementing a particular approach.”

• CPUC Ruling
• CPUC Press Release
• PG&E May Need To Break Up [KCRA]
• Should California Break Up PG&E? [SF Chronicle]
• PG&E Faked Safety Inspections [Curbed SF]
• Judge Orders PG&E To Account For Fire [Curbed SF]