Q&A: Tom Steyer defends plan to break up utility monopolies after SF blackout

Democrat Tom Steyer launched his campaign for governor last month by placing a target on investor-owned utilities like SoCal Edison and Pacific Gas & Electric, pledging to break up “the monopolistic power of utilities” in an effort to lower costs in California.

So after power went out in San Francisco on Saturday and plunged thousands of customers into a multi-day blackout, Steyer wasted no time slamming PG&E and doubling down on his plan.

The utility has drawn fire from other Bay Area Democrats for the outage, which left about 130,000 customers without power for multiple days and shut down traffic.

Sen. Scott Wiener, D-San Francisco, said he will introduce legislation to let his and other cities “break up” with the utility, which provides power to more than 5 million households in Northern California and has come under fire in recent years for high energy costs.

Rep. Eric Swalwell, D-Dublin, on Tuesday called the blackout a “national security vulnerability.” He serves as the top Democrat on the House Cybersecurity and Infrastructure Protection Subcommittee.

“When a single substation failure leaves 130,000 people in the dark, stops our transit, and freezes our most advanced technology in the streets, it isn’t just a ‘utility problem.’ It is a security failure,” said Swalwell, who is running for governor. “In 2026, energy security is public safety.”

The East Bay Democrat said if elected, he would move to prevent major blackouts by hardening the grid with “military-grade resilience standards” and decentralizing power to “neighborhood microgrids.”

Another gubernatorial candidate, former state Attorney General Xavier Becerra, wrote on social media that PG&E “owes us a thorough evaluation of what happened” and that privately-run utilities “need to be held accountable to serving the public interest.”

Of the candidates for governor, Steyer has been one of the most critical of PG&E and has used part of the $20 million he has so far put into his campaign to call for utility reform. He spoke with The Sacramento Bee on Tuesday about the San Francisco outage and his energy platform.

The following interview has been edited for length and clarity.

The PG&E outage was a big interruption for people. What are your thoughts on what happened?

It was super unfortunate and upsetting. I’ve been saying that monopolies don’t really work, and PG&E covers 40% of California. They’re charging us twice the national average for electricity, and they have more than double the outage times than comparable utilities around the country, so obviously something is not working. And the fact that this happened on the biggest (shopping) weekend of the year – if you’re a restaurant, that’s a huge hit. If you’re a retailer, that’s a huge hit. So it really brought home the point that I’ve been making: we need to have a better, more competitive system.

Sen. Scott Wiener announced he’s going to introduce legislation to allow San Francisco and other cities to “break up” with PG&E. Would you support that?

In all fairness, I haven’t seen the details of the proposal. Whether it’s good or bad, I don’t know specifically because I want to look at the details. (Sen. Wiener) is running for Congress in San Francisco. He’s making the point that this isn’t working the way it should. Every time I read an opinion piece — which I did in The Bee — I read that this is the best we can possibly do. I just don’t think that’s true. We have a monopoly charging monopoly rents and providing low service. That is not the best we can possibly do.

Bee opinion writer Tom Philp recently argued that breaking up the utility monopolies, as you’ve talked about doing, is easier said than done. How would you actually go about doing that?

Look, what I said was we want more competition. What I didn’t say was that we necessarily needed to rebuild the whole system. If you take a step back, the incentive of an investor-owned utility is to get as much investment into the rate based at as high a rate as possible. That’s their goal. Therefore, there is no incentive to bring down costs. I did read that article which basically said, ‘Okay, this system may not work, but there’s nothing we can do about it.’ And (Philp) starts exaggerating how much can be done, and I think that’s absolutely false. The rest of the country pays half as much (for electricity, on average). PG&E doubled the cost of electricity over the last decade, so we’ve done better in the past.

This may not be the silver bullet, but we need to change the oversight. We need to change the speed of connecting renewables to the grid. We need to change the opportunity for people to generate power and sell it on a community basis. The point is that we need more competition here, and I think that’s what San Francisco shows – this is an unacceptable outcome.

On that note, we saw an effort in the Legislature this year to scale back existing benefits for solar panel owners. Supporters said it would lower costs for everyone else. Opponents said it was breaking promises to solar owners. Should that have gone through?

I have not looked at that specific proposal. Let me say this: we should be looking at changing the relationship between generators and PG&E. That is something which, in effect, we have already done for people who are now adding solar to their roofs. Of course, PG&E’s argument is that the only thing we can possibly do is pay the people who (previously) put solar on their roof less because they’re the problem. That’s not true. We need to do this in the context of a broader vision of more competition, and how do we generate that competition and drive down costs? I want to look at anything like that in a much broader context about incentives and cost production.

Something unrelated: There’s a proposal to implement a one-time 5% tax on people with assets worth $1 billion or more. If this lands on the ballot in 2026, would you support it?

I’d like to understand what the impacts are before I comment. But I have been in favor of a wealth tax at the federal level for a long time. This isn’t even on the ballot yet, so I want to look at it specifically, and then I want to look at it in terms of what else is on the ballot.

California is the place that people come to invent the future in creativity and art and movies and politics and business. In all of those things, I believe the sky should be the limit, so I’m not in favor of putting a lid on people’s creativity or success. But if people are going to come here and build their dream in an ecosystem that’s been built and run by working people for well over 100 years, then they’re joining a community, and I will insist on them being good members of this community and the state.