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California Lawmaker Proposes a State Takeover of PG&E

California Lawmaker Proposes a State Takeover of PG&E

Gov. Newsom eyes takeover of PG&E, says utility ‘no longer exists’.

https://www.youtube.com/watch?v=IoGGuPoFm74

Given the epic failure of the Democratic Party’s caucus app, you might think that it would lead to some reflection about how much managing its members should actually be attempting to handle.

However, one California lawmaker is proposing a takeover of a troubled electric company.

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.”

California Governor Newsom has threatened if PG&E didn’t work to get itself out of bankruptcy, that the state might take over the entire company as early as June.

Exactly one year after PG&E Corp. filed for bankruptcy, Gov. Gavin Newsom said PG&E “no longer exists” and doubled down on a state takeover if the utility doesn’t shape up by June 30.

“There’s going to be a new company or the state of California will take it over,” Newsom said at an event with the Public Policy Institute of California in Sacramento about the future of the state’s energy Wednesday.

“Because if PG&E can’t do it, we’ll do it for them. Period, full stop. We’re sick of excuses and delays,” he said.

But the state cannot just take over the private utility without federal bankruptcy court approval. The plan may not work out as Newson hopes given President Donald Trump’s disdain for how California’s politicians handle its infrastructure. It also doesn’t help that PG&E Corp. won court approval of a settlement with bondholders and is on track to exit bankruptcy by the end of June, in time to qualify for a statewide fund designed to cushion utilities against the rising risk of wildfires.

One of the chief reasons that the electric company is having fiscals problems is related to the demands of California’s green energy regulatory requirements. As California Globe editor Katy Grimes notes, resolving the bankruptcy favorably may mean PG&E is freed from the state stranglehold.

The real goal of the PG&E takeover appears to be to control the state’s mandated renewable energy goals so PG&E’s bankruptcy does not sell off or shut down the utility’s renewables division. While PG&E is in Chapter 11 bankruptcy, the court has to examine where the financial drains to the company come from (renewables division) and where the profits are. The Bankruptcy court is the one place PG&E could divest itself of the state’s renewables mandates… and California’s Democrats can’t have that.

This news does not hearten California’s taxpayers and energy users.

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Comments

Go for it California! Everyone knows what a great job you’re doing with crap in the streets and other issues.

Ah hell, that’s a great idea and when they do they can bring Gray Davis back to run it for them.

    TX-rifraph in reply to NotKennedy. | February 7, 2020 at 3:18 pm

    Greta can be an advisor and AOC can be the CFO.What could go wrong? How hard can it be? It’s just a simple electric utility after all.

    Nah … I say bring in the head of Venezuela National Energy. His thinking is much more in line with California’s.

Paul In Sweden | February 7, 2020 at 3:32 pm

It does not seem right that Sacramento is so worried about a selloff of the renewable division by PG&E. Someone else would be operating it. They would not mothball it. Sounds more like some well-connected PG&E stakeholders need a cushy bailout.

    CaliforniaJimbo in reply to Paul In Sweden. | February 7, 2020 at 10:06 pm

    The renewable division loses so much money, it couldn’t stand on its own. It needs the rest of the company to balance the books. California will never admit to a green energy boondoggle.

      There is an ample supply of clean, cheap, natural gas and California is wasting billions on green energy. I really shouldn’t complain. 5 years ago with the tax credits I got from the government I got solar panels that supply all my power for free. Now I usually pay a $19.00 service charge a month. I tried to explain to my neighbors that they could have free electricity, but no one would believe me. Only my sister took advantage.

Haven’t we had enough Wiener politicians?

The only way to make PG&E worse is having the government running it.

Yes. Who needs on demand electric power anyway. Go GREEN!!!

Bloomberg is reporting that LTC Vindman was “removed” from the White House!

    Firewatch in reply to MarkS. | February 7, 2020 at 6:27 pm

    Now for the other evil twin.

      Edward in reply to Firewatch. | February 8, 2020 at 9:26 am

      I read elsewhere this morning that both twins were relieved of their assignment to the National Security Council (NSC) and sent back to the Army for further assignment. Don’t know that is an accurate report, but it would make sense for the President to get rid of both from the White House staff.

      The President had issued an order on 4 October for the new National Security Advisor to cut the NSC staff by 33% (the staff has grown from under 100 in 1991 to 310 under the last administration). Might as well take advantage of the cuts to rid himself of some of the seditionist element.

        Edward in reply to Edward. | February 8, 2020 at 9:49 am

        I’ve seen several numbers now. Most recent states that the NSC under Bush 43 was 100 staffers and the last administration increased it to somewhere between mid-200s to 310 when President Trump was inaugurated. No matter, it needs trimming to be an effective, lean team advising the President.

California can take over PG&E and then hire all the homeless to run it. Think of all the savings minimum wage jobs will bring to rate payers.

    Dream on, it’ll become the biggest rip off of taxpayer dollars to the democrats and their supporters in the state. hunter biden will get a $100,000 no show job along with a bunch of other parasites.
    Think pelosi is rich? If they take over PG&E then you’ll really see the graft flowing like the Amazon.

      dunce1239 in reply to 4fun. | February 8, 2020 at 10:22 pm

      All the workers would become state employees eligible for free health care, early retirement, and fat pensions plus it would near impossible to fire anyone. They would not raise taxes right away but would raise rates to cover the bloated costs and the problems would not change but likely get worse. Many new hires would have political connections with minimal qualifications.Stupid is as stupid does.

I think it’s a fabulous idea. Our republic was envisioned by the founders to be a grand experiment of different ideas competing against each other at the state level.

If the leftists in California are so confident in the powers of the state, let them go for it. Then we can all watch the results and react accordingly.

What could possibly go wrong? Behold the lovely sidewalks of San Fransisco, now just imagine what happens when the lights go out.

Socialists cannot help themselves. Their dreams inevitably lead to totalitarianism.

Let’s see if the voters continue to support Newsome when he takes over the utility company and the rolling blackouts and brownouts get worse. There’s nothing like depending on an inept politician for your heat, lights and air conditioning.

The Friendly Grizzly | February 7, 2020 at 4:45 pm

Sounds a bit like communism.

As the professor from some college back east offered, “We can turn off the heat” to further the green agenda.

Fascists wanting to take it all over.

Pete Butthead is all aboard with another stupid idea:

Buttigieg Argues for End of Electoral College:

https://www.breitbart.com/politics/2020/02/07/pete-buttigieg-argues-for-end-of-electoral-college-after-iowa-victory-without-popular-vote/

    And the MSM will continue to say he’s a “moderate”. He’s the most focus group and polling tested candidate the country has ever seen, and destined to not be elected President should he get the Socialist-Democrat Party nomination. He will need the elimination of the Electoral College if he is ever to be President. Flyover country isn’t ready for his husband to be First Husband.

I know of a few municipal owned power companies that provide reliable lower cost electricity to their residents. The ones I’m aware of have one thing in common. A local hydroelectric source large enough to produce more power than the municipality uses, with surplus sold to the grid at demand market rates. Construction of a power plant with a natural water drop is inexpensive. Putting a dam up where there’s plenty of flow but no natural drop costs more. But in both cases, once the plant is built, fuel costs are zero. Maintenance and personnel are the cost factors.

    gospace in reply to gospace. | February 7, 2020 at 5:27 pm

    Forgot to add. No way a whole state with a state owned utility will provide inexpensive power. Municipal grids have nearby private companies that would absorb them in a minute if they charged more than they did, with voter approval. A statewide system wouldn’t have any incentives to hold down costs. No competition.

      OldProf2 in reply to gospace. | February 7, 2020 at 11:01 pm

      No way the Dems in CA would install anything to do with hydroelectric. Although hydroelectric is the only controllable renewable source, the greenies are totally opposed to hydropower.

      Here in WA, the Dems keep trying to force us to take out our dams. They even passed a stupid law that requires a certain percentage of our power to be from renewable sources. BUT they also defined hydropower to be a non-renewable source. They want to define it out of existence. So our electric rates went up so the utilities can install huge windmills that only turn 5% of the time.

      I hope CA ends up freezing (and roasting) in the dark.

        not just ca or wa, there are about 45 locks and dams on the Mississippi build during the 30’s I believe, Le Claire IA wanted to add a power generation plant to one of the dams and the environmentalist went nuts, the dam is already in place, it has nothing to do with saving the environment, just to increase the misery level

        dunce1239 in reply to OldProf2. | February 8, 2020 at 10:31 pm

        The federal government paid for the dams and the state gets the cheap electricity.The aluminum companies built plants there to take advantage of the cheap electricity. Take the dams out and try sell wind electricity to them and they will move very quickly taking those good paying jobs and tax revenue with them.

    JusticeDelivered in reply to gospace. | February 7, 2020 at 10:07 pm

    This is why we should be taking out Iran’s hydroelectric.

    D Grant in reply to gospace. | February 8, 2020 at 2:23 pm

    I have a relative that works for PG&E in southern CA. He hasn’t been there long, but he gets inexpensive (less than $200/month) healthcare for him and his wife, who is old enough for Medicare, but quit getting it because it was cheaper with PG&E. The state defines the pay scale for the company, so the benefits are great. He gets 20% off of his electric bill each month. After 5 years, he will receive retirement. The customers need to be made aware of this.

    Also, the linemen that come to CA to work make astronomical paychecks. My son makes $600/day x 6 days a week, in Pennsylvania at the present, and if he goes to CA he will make even more. Some of the unions in CA pay $300 per diem, plus the $50++/hr just to get the workers they need.

It will run as smoothly as the Iowa caucus….

This has me nostalgic for the good old days of Dennis the Menace Kucinich and Cleveland Muni Light. Yes, you can provide cheap power as long as you run up a huge debt.

American Human | February 7, 2020 at 6:53 pm

The new CEO of PG&E will be a Willie Brown protege. Brown-outs will be a euphemism for the position. The board of directors will become political patronage positions. The will all leave the board as multi-millionaires.
PG&E will become Venezuela Oil production.

Starnesville.

What could possibly go wrong …* GRIN *

Subotai Bahadur | February 7, 2020 at 7:36 pm

Given the fact that the California State Government is a functional one-party Marxist State, the takeover of PG&E is a given; even if they have to openly defy a Federal court. California is above the law.

The new “Peoples’ Power Conglomerate” will have certain guaranteed results.

1. Anything that the State has criticized PG&E for as a fault will by definition be now praised as a positive because it is being done by the government.

2. It is a given that power outages will become the norm, with the State prioritizing politically reliable areas for what power is available.

3. Costs will rise on all power consumers, including rates, backup power arrangements, and legal penalties for having backup power arrangements.

4. Much of the power used by California is imported from other states. The new “Peoples’ Power Conglomerate” will somehow find it too technically challenging to pay for that power and there will be power cut offs for failure to pay.

5. They will assert that they have the sovereign right to receive power without paying for it, and sue in Federal court to try to force other states to furnish it.

6. Businesses will react to deal with the power crisis. That reaction will involve the loss of tax base as businesses reduce their operations and number of employees in California. They will be characterized by the “Peoples’ Democrat Republic of Alta California” as being Kulaks, Wreckers, and Saboteurs.

7. There will be violence, some with the collaboration of the State. Those more than 100 miles from the coast may want to prepare for waves of looters from the coast, politically and operationally.

8. They have made this choice themselves. It is not the function of the rest of the country to take steps to rescue them from their choices until they have endured them long enough to learn a lesson about what works and doesn’t work. If they consider themselves above and outside the law and Constitution, they are above being aided by those who consider themselves under the law and Constitution.

Subotai Bahadur

    MajorWood in reply to Subotai Bahadur. | February 8, 2020 at 3:02 pm

    Sort of like the plot from “Lucifer’s Hammer.”

    Let’s address some of these, point by point:

    1) The state blames its problems on Trump, climate change, racism, etc. It can still use them as scapegoats with a takeover.
    2) Power outages seem to be increasingly the norm anyway.
    5) I don’t care what a court rules. Good luck with other states continuing to deliver power. Do you think Trump would enforce this in his second term?
    6) That’s easy to solve. When businesses start fleeing, seize the assets and jail the owners. Turn the business over the leftist cronies. Problem solved.
    7) Silly person. The state has to go house-to-house first, and take the few remaining guns first, before the “People’s Militia” delivers justice to these backwoods racists. Who are now mostly Hispanic.

Create a problem to solve a problem for profit. A neat trick, if they can pull it off.

“Venezuela here we come!!” continues apace.

Government, especially when lib dems are in charge, always make things better.

If it doesn’t, you just didn’t apply enough government.

Try harder next time.

The good news is if they apply this plan hard enough eventually the forest fires will run out of fuel.

All of these big utility companies need to be broken up. About 20 years ago, an stock analyst at Smith Barney (then Shearson Lehman Brothers) produced an epic research report laying out why power generation and distribution needs to be decentralized and privatized. Electricity doesn’t transport well (almost all long-distance power transmission failures are weather-related, wind, fire, lightning strikes, animals chewing through the wires when they stretch out and can touch the ground, etc… So sprawling power grids are very inefficient. And with everything now being connected to the web, it has also become a national security problem.

The other problem is how inefficiently centralization copes with big swings in electricity usage throughout the day and seasonally. His recommendation was to link the growing independent power producers (business and home solar) to the network and let the market work it out. Business was already becoming high tech back then and so many large companies required “cleaner” electricity than what was coming off of the grid so they “weaved” their own electricity to “clean” out the instability and spikes. Home demand peaks at night. Business demand peaks during the day. All producers would benefit from more stable 24 hour demand which would create a more efficient overall investment in production facilities. The companies could continue producing into the grid after hours when utilities were over-taxed. Everyone could pull off of the grid when prices warranted. Home owners could sell their excess solar/wind production onto the grid.

I know, CA have a disasterous experience with “deregulated” electricity. But they didn’t do ANYTHING but deregulate the utilities allowing them to set prices to whatever they want and famously falling victim to Enron. People need to understand that this was just corruption masking itself as “deregulation”. The idea is to break up the monopolies and introduce a regulated structure similar to the Glass-Steagall Act to protect the free market mechanisms rather than a bureaucracy reinforcing the inefficiencies of a politically corrupted utility.

CA should be moving in that direction for ALL of the electric utilities not just PGE. SCE is also a major disaster and just as corrupt. There are plenty of small power plants that are very efficient. Pasadena and Burbank are two I am familiar with. Those utilities would do well in a deregulated environment. We really should give the idea another try only this time, do it right.

There is a scene in the movie Lawrence of Arabia in which electricity is cut off in Damascus because the Arab tribesmen do not know how to operate the system. The British eventually step in to restore electricity, but not before letting the Arabs wallow in their technical ignorance.
Under government operation, California’s electrical system would work as well as that in Damascus.

It would be better for the failed PG&E to takeover the failed government of California. Degree of failure, and all.

I dunno if the state buying CA is a good idea or not … but if you guys think you’re so brilliant why don’t ya go to CA and constructively help to fix some of their problems rather than shooting your mouth off.

Another great idea from socialist commiefornia. Just like the utterly stupid Demoncrat politicians phewlousey, Schiff for brains, max maxine, and all the others they keep re-electing.

Wasn’t a state takeover the endgame all along?

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