Ignore the empty slogans. Let’s make PG&E pay fire victims, protect renewable energy

There is one thing a good policymaker learns early: Beware of anyone who cloaks a solution with a slogan.

Whether it’s a promise to blow up boxes or make something great again, a slogan is always intended to sound appealing without offering any details on what a given proposal would actually deliver.

With that in mind, it’s time to shed some light on the latest slogan being cynically floated in Sacramento: “Stop the PG&E bailout.”

The slogan is being summoned in an attempt to prevent the discussion of a proposal to allow PG&E to quickly compensate wildfire victims by issuing low-interest bonds that would be paid back solely by the company’s investors.

But who are those who are floating this slogan? What do they mean by that? And what is their agenda?

Obviously, victims of California’s horrific wildfires must be compensated, and PG&E must be held accountable. No one is suggesting otherwise.

The company will be paying out billions in damages. It is in bankruptcy and its stockholders have lost most of their investments. State law continues to hold PG&E strictly accountable for wildfires sparked by its electrical equipment.

Clearly, “Stop the PG&E bailout” has nothing to do with that.

Rather, the slogan is intended to stop lawmakers and Gov. Gavin Newsom from acting to quickly compensate wildfire victims, protect California’s commitment to renewable power and prevent Wall Street hedge fund managers from dictating our state’s energy future.

California is a world leader in transitioning to renewable power. I am proud that, when I was the leader of the state Senate, we committed California to producing 100 percent of its power from renewable sources by 2045. We are already more than halfway there.

One big reason is that contracts with PG&E have made possible sustained investment in solar and wind generation. Those contracts are essential and must be maintained. But the hedge funds seeking to consolidate control of PG&E have a history of hostility toward renewable power.

Last year, Elliot Management used its investment leverage to push Sempra Energy to sell its renewable assets. It did the same with NRG Energy, forcing it to sell off its renewable portfolio.

By enabling the issuance of low-interest bonds to compensate wildfire victims, the Legislature would protect those crucial renewable energy contracts rather than risk putting California’s energy future in the hands of those who have no interest in the long-term sustainability of our energy supply.

Elliot Management is run by billionaire investor Paul Singer, a notorious “activist investor” who is also a leading contributor to the Republican Party, an enthusiastic supporter of President Trump and a leading investor in one of the nation’s top coal-mining companies.

Like other hedge funds, Singer’s tactics when he invests in a distressed company is to use facile slogans to suppress discussion of facts. “A signature Elliott tactic is the release of a letter harshly criticizing the target company’s C.E.O., which is often followed by the executive’s resignation or the sale of the company,” according to a profile of Singer in The New Yorker.

A Bloomberg profile called him “aggressive, tenacious and litigious to a fault.”

In this case, here are the facts that the slogan doesn’t want us to consider: There are two ways for PG&E to raise the $20 billion it needs to compensate wildfire victims. If allowed to issue low-interest bonds that would be paid back by reduced future income for stockholders, it would retain ownership among traditional utility investors such as pension plans, employees and retirees seeking stable earnings and concerned with the company’s long-term sustainability.

The alternative is to sell massive new shares of stock, which would effectively transfer ownership almost exclusively to hedge funds and other investors whose sole interest is to make as much money as they can as quickly as they can – California’s energy future be damned.

No one wants to bail out PG&E, and no one is considering it.

But this issue is not about PG&E, whatever one might think of the company. It’s about protecting California’s values and charting the best course forward for our state. That won’t happen if we let Wall Street take the helm.

This story was originally published September 6, 2019 at 7:01 AM.