Capitol Alert
Should California take over PG&E? San Francisco Democrat proposes a public utility
A California state senator announced a plan on Monday to convert the troubled Pacific Gas and Electric Co. into a public utility, adding pressure to the bankrupt company to quickly remedy its financial woes or face legislative retribution.
State Sen. Scott Wiener, D-San Francisco, said the legislation would create a “safer, more reliable and affordable energy” service for Californians. The measure arrives ahead of a June 30 deadline for PG&E to exit bankruptcy, and after mass power shutoffs prompted statewide uproar during last year’s wildfire season.
“This legislation is long overdue,” Wiener said. “It will put and end to the dangerous roller coaster ride that we have been on with PG&E for the last decade.”
PG&E in October shut down parts of its grid because of windy, dry conditions associated with fire risk. The company wanted to avoid a catastrophe like the deadly Camp Fire of 2018, which was caused by PG&E equipment.
Instead, the blackouts exacerbated PG&E’s damaged public image and prompted new frustration from Gov. Gavin Newsom and state lawmakers who heard from older and disabled constituents who lost power for days.
Newsom promised a “new company” during a climate and energy event on Wednesday hosted by the Public Policy Institute of California. He said his staff has been meeting with PG&E daily. To avoid state takeover, he said the utility must emerge from bankruptcy ready to make a “robust investment in public safety.”
“We are pursuing a deal with PG&E. If we are not able to secure that deal, the state is prepared to take it over,” Newsom said. “It’s not the preferred option, but it’s a necessary option if they can’t do that for themselves.”
The utility unveiled a new bankruptcy plan at the end of January after Newsom rejected an earlier proposal.
Flanked by San Francisco Mayor London Breed and local officials, Wiener said his bill would end PG&E’s “broken” business model.
He added that the legislation would not disrupt cities’ plans to create their own utilities by buying parts of PG&E. San Francisco is pursuing that option.
Wiener said the bill, to be finalized later Monday, would ensure PG&E workers are allowed collective bargaining, retirement, wage protection and benefit opportunities, and promised the company would be more transparent.
The promises did not persuade a crowd gathered at the San Francisco press conference.
“Stop lying,” protesters kept yelling, drowning the speeches with loud choruses of booing. “What about the pensions?”
PG&E was also quick to disparage the plan, and said it was already working to exit bankruptcy quickly and efficiently and will build a “stronger and safer PG&E .”
“We oppose Senator Weiner’s proposed framework, and PG&E’s facilities are not for sale,” the utility said in a statement. “Additionally, changing the structure of the company would not create a safer or cleaner operation. Recent takeover attempts have largely failed due to a range of factors. We remain firmly convinced that a government or customer takeover is not the optimal solution that will address the challenges ahead and serve the long-run interests of all customers in the communities we serve.”
The opposition highlights the challenge ahead, both in bankruptcy court, the Capitol and with the public.
“Given this terrible situation with PG&E, we now have an opportunity to make real change, to try a new model,” Wiener pledged. “And that’s what this legislation is about, public ownership of PG&E.”
Capitol bureau reporter Sophia Bollag contributed reporting.
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