Tag Archives: PGE

SB 917 is a plausible PG&E public buyout plan, if the public wants to pay the price

by Steve Blum • , ,

A credible PG&E public takeover plan is on the table in the California legislature. Senator Scott Wiener (D – San Francisco) introduced senate bill 917 on Monday. It’s a detailed guide to acquiring PG&E’s electric and gas business, including financing and operating plans and responsibilities.

Wiener wants to create a massive utility district that encompasses all of PG&E’s vast northern California territory. It would own most or all PG&E’s infrastructure and business, after it’s been acquired via an eminent domain process – the state would use its sovereign authority to take over ownership, with the compensation paid to the company likely determined by a court. I haven’t seen any estimates of how much that would be, but when San Francisco proposed a similar takeover last year. It initially ballparked the cost at “a few billion” just for the assets and operations within the City, and ended up offering $2.5 billion, which PG&E rejected as inadequate.

Top management would work for the new Northern California Energy Utility District, but nearly all the work of running the utility would fall to a non-profit operating company. Executives aside, PG&E’s employees would end up working for the operating company.

Both the district and the operating company would be run by boards elected via a popular vote, in the same way as other Californian special districts, for example the Sacramento Municipal Utility District, which provides electric service in Sacramento County.

The most or all caveat is there because the bill also gives cities, counties and local utility districts a de facto right of first refusal. San Francisco, say, can jump in on the eminent domain proceeding and slice off PG&E assets, customers and employees within its boundaries if it “contributes its proportionate share of the compensation paid for the assets”, according to the summary of the bill prepared by the legislature’s non-partisan attorneys. Slicing off customer and cash dense urban territory could be problematic if the mega-district is left with mostly rural communities.

No surprise: PG&E doesn’t like SB 917. It released a statement saying the company opposes the bill and a public takeover “would not create a safer or cleaner operation”.

The bill promises just that, though. It includes a long list of directives, including twice a year inspections, minimising the scale of preemptive power cuts and reducing greenhouse gas emissions. Which is possible, but at a price. Similar to other local governmental agencies, the new northern California utility mega-district would have a limited ability to impose taxes, including particularly to pay back the money taxpayers would have to borrow to foot the bill for taking over PG&E.

Political dreams, not business sense drive plan for public takeover of PG&E

by Steve Blum • , , , ,

Glinda the good witch

It’s not a co-op, despite being “customer owned”. It’s not a utility district or a municipal utility, despite operating “as though it were a public agency”. And it’s certainly not a profit making company. Which leaves wide open the question of what kind of organisational beast San Jose mayor Sam Liccardo and 113 other northern California elected officials think will take over Pacific Gas and Electric’s operations and assets.

The group released a set of “operating principles” for a new, quasi-public entity that would replace PG&E. Key details are missing, including where the money is coming from – bankruptcy judges aren’t in the habit of giving something away for free when others are willing to pay for it – and whether they want PG&E’s natural gas business too.

It’s an all things to all people proposition. Somehow, this new utility will have oversight responsibility for community choice aggregators, which are local governmental agencies – joint powers authorities – that buy electricity and manage customers, via PG&E, in some California cities and counties. But it will have “‘private’ entity legal status” as a “customer-owned utility”. Which makes it sound like a traditional electric cooperative, except that “excess revenues will be re-invested into the communities” it serves, and not rebated to the customers who own it, as co-ops do.

The group’s manifesto includes a long wish list of other goodies the new utility will bestow upon people and public agencies in PG&E’s service territory, such as prioritising capital investment to “prevent wildfires, reduce public safety power shutoff events, and improve overall system reliability”, and “maintaining and growing a skilled workforce” that will improve safety and reliability, as well as customer service. They seem think it’s possible to do all that, while improving “affordability” and offering “options to reduce costs for all ratepayers”.

That would be a neat trick. But it’s only possible to make those kinds of promises when the only cost involved is the price of a press release. Public ownership of monopoly utilities is worth considering, but it’ll only work if the owners – tax payers – are willing to back it financially and if the people running it focus on the tough business of delivering service.

Contrasts of competence as California assesses power cuts and utility pole route management

by Steve Blum • , , , ,

Pge outages 9oct2019

California’s privately-owned electric utilities and their regulators have a long and difficult job ahead as they try to figure out what was good and what was bad about last week’s massive wildfire prevention power cuts. Their eventual conclusions will have a significant impact on how utility pole routes are managed in California, including possible new, and more costly, design standards, and budgets for maintenance and wildfire prevention. Those costs will ultimately be shared with telecommunications companies that also use those poles.

The only major private electric utility that appears to be squarely in the good column is San Diego Gas and Electric. They shut off power to 395 customers, had them restored by Friday afternoon and did not start any fires. An excellent article in the Los Angeles Times by James Rainey and Joseph Serna details the operational, grid design and maintenance decisions SDG&E has made, and successfully implement, over the past decade.

The contrast with Pacific Gas and Electric is stark…

San Francisco-based PG&E is struggling to catch up with San Diego Gas & Electric Co., which has become California’s recognized leader in forecasting fire danger, tailoring narrow outages for the most endangered neighborhoods and communicating the emergencies with the public, a top state regulator said.

“Those have been three pillars of success for SDG&E, and they are currently sources of failure for PG&E,” said Elizaveta Malashenko, deputy executive director for safety policy at the California Public Utilities Commission.

PG&E took a much blunter approach, cutting power to 738,000 customers in 34 counties across northern and central California. A customer is reckoned as a home or business – at least two million people were affected. Two dozen or more transmission lines – major, high voltage lines that feed regional and local distribution grids – were shut down. Full service wasn’t restored until late Saturday.

Whether or not it was necessary to cut off so many customers is a question that will be debated for months, if not years. What’s not in doubt is that PG&E completely fumbled public communications and poisoned relationships with the public, as well as state regulators and elected officials. Both CPUC president Marybel Batjer and California governor Gavin Newsom excoriated PG&E’s management and performance, even while conceding the necessity of “public safety power shutoff events”. The PG&E website was largely useless, and in some cases completely unavailable, and much of the information that did get out was inaccurate.

On the other hand, PG&E has not been implicated in any of the (relatively) small wildfires that broke out during the days of high winds and low humidity. To that extent, PG&E’s wildfire prevention efforts were successful.

Southern California Edison might not be as lucky. Although SCE won qualified praise for planning and executing its wildfire prevention program last week, its equipment might have been the cause of a major fire that began on the northern edge of the City of Los Angeles, and had spread through nearly 8,000 acres as of last night. Eyewitnesses said the Saddleridge fire began at the base of an SCE transmission tower, on a line that was still electrified. The LA fire department is treating those reports as credible, but its arson investigators have not reached any conclusions about the cause.

SCE shut off power to 24,000 customers, and restored power to all but four last night.

Broadband deployment will be more rigorous and costly in California, following U.S. supreme court ruling

by Steve Blum • , , , ,

Southern California Gas and Electric can’t pass on wildfire costs to ratepayers. The federal supreme court declined to hear SDG&E’s appeal of a California Public Utilities Commission decision that put some of the burden of a 2007 series of wildfires on company shareholders. California’s strict “inverse condemnation” law requires utilities to bear the full cost of any damage when their pole routes, or other equipment in the right of way, is even partially to blame. Monday’s decision lets that principle stand. As a result, electric utilities will spend more on pole route maintenance and be tougher on inspections and standards enforcement.

Some of those additional costs, and all of the added rigour, will land on telephone, cable and other broadband companies that occupy space on utility poles.

According to a Los Angeles Times article by Rob Nikolewski,

Investigations into the causes of the Witch, Guejito and Rice fires — three of the worst wildfires in a devastating firestorm that befell San Diego County in October 2007 — found they were sparked by SDG&E equipment that had not been properly maintained.

The three fires combined to kill two people, injure 40 firefighters and destroy 1,300 homes…

SDG&E spent $2.4 billion to resolve more than 2,000 lawsuits related to the 2007 wildfires, but it insisted the blazes were ignited by factors it could not control — including extreme Santa Ana winds, a lashing wire owned by Cox Communications that hit an SDG&E power line and a tree limb that fell onto an SDG&E line due to high winds.

Properly maintained or not, SDG&E’s equipment was in the chain of events that led to the Guejito fire. So was Cox’s line, but even though it was the trigger, the California Public Utilities Commission tagged SDG&E with responsibility: it should have known that the cable company’s line was too close to its electrical line. According to investigator’s measurements, the two lines were separated by a bit more than three feet, instead of the six feet required by CPUC rules.

Cox ended up reimbursing SDG&E for a relatively small fraction of the $2.4 billion in liability claims that were paid out as a result of the three fires. But that was between the two companies; as applied by the CPUC and courts, California’s law put the liability burden on SDG&E.

The same legal principles apply to Southern California Edison and Pacific Gas and Electric, California’s other two major investor owned electric utilities. They’ve lagged behind SDG&E’s wildfire prevention efforts, and are now playing catch up. The result will be higher levels of maintenance work and more rigorous inspections of pole routes, among other things. The cost of all of that – time, effort and money – will eventually be shared with telecoms companies. Deploying and maintaining broadband infrastructure in California will only become more expensive.

PG&E pole attachment shot clock ready for another CPUC vote

by Steve Blum • , , ,

Fiber attachments 625

The do-over of a settlement resolving a utility pole attachment dispute between Pacific Gas and Electric and Crown Castle is queued up at the California Public Utilities Commission. The original settlement was drafted by administrative law judge Patricia Miles and approved in March. But commissioners reversed the decision due to procedural mistakes, and told Miles to fix those errors try again. She did, and the new draft is the same as the old one.

If approved, the imposed settlement gives PG&E forty five days to “provide a response” to a pole attachment request from Crown Castle. If there’s no response, Crown Castle can go ahead with its proposed work. “Response” is not defined, but typically it means a yes or no answer, including any specs for work that’s needed to make the pole ready for a new line to be attached. Whether PG&E’s lawyers go with the typical meaning or try to craft one of their own remains to be seen.

The draft also bakes in the rejection of Crown Castle’s original request to be allowed to buy attachment space on PG&E’s poles, rather than just lease it. PG&E’s practice is to either sell ownership of the entire communications zone – the segment of the pole that’s high enough off the ground and sufficiently beneath electric lines – or lease it by the foot. Typically (there’s that word again) AT&T or another incumbent telco buy the entire zone and manage it under private joint pole rules that are, in theory, friendlier to telecoms companies. Crown Castle wanted those privileges for its one-foot of pole space, but didn’t want the responsibility of managing the entire zone.

PG&E opposes the changes proposed by Miles. It doesn’t like the way it was handled – the dispute between the companies was fast tracked as an arbitration, rather than a typical, and lengthy, litigation – and it objects to what it characterises as special treatment given to Crown Castle.

Crown Castle generally endorsed Miles’ decision, albeit after making clear that they think they should have been given the right to buy space by the foot on poles, and after asking for one change – removal of a requirement that they provide two days notice to PG&E before doing work on poles.

The commission is scheduled to vote on the proposed settlement at its meeting next week, but don’t be surprised if it gets bumped. PG&E and Crown Castle have one more round of comments to file, and if any of their arguments gain traction with Miles or commissioners, then new language would have to be drafted.

Fewer complaints, so far, as California utilities cut power to reduce wildfire risk

by Steve Blum • , , , ,

Update: PG&E shut off power this morning, as previously announced. As of this evening, it had restored power in north Bay Area counties, and some of the affected Sierra foothill communities. SCE turned power back on for the Riverside County homes affected by Tuesday’s cuts. Public reaction to PG&E de-energisation moves remained as relatively muted as it did on Tuesday. The San Francisco Chronicle spoke to one upset Sonoma County supervisor, but on the whole there was very little NIMBY outrage.

Forecasts of high winds and hot temperatures this week led two of California’s major privately owned electric utilities to implement de-energisation plans that were drafted earlier this year. Californians’ acceptance of “public safety power shutoffs” as a necessary fire prevention tool appears to be growing, although we’ll find out today if residents of the more affluent communities of the north San Francisco Bay Area are as tolerant as people in the Sierra foothills.

PG&E announced that it is turning off power this morning to 48,000 customers in Butte, Napa, Nevada, Placer, Plumas, Sonoma and Yuba. That follows cut offs in Butte, Nevada and Yuba counties for 24,000 customers that began Monday evening. Restoration of service to the first group was supposed to be completed yesterday evening. As of last night, Southern California Edison had turned off power for a few dozen customers in Riverside County, and put a 140,000 more across the Southland on notice.

San Diego Gas and Electric customers are not affected, so far.

People who live in Sierra foothill communities have more directly personal memories of the horrific fire that killed 86 people and largely destroyed the town of Paradise in Butte County last year. So they might not be happy about losing power, but they did not seem to erupt in outrage as some Wine Country residents did last October. That’s progress.

The Sacramento Bee found one Butte County resident who was annoyed. She was interviewed at one of the “community resource centers” that PG&E set up, basically a big tent with air conditioning and plenty of outlets to charge phones. Judging by the video shot by Bee reporter Daniel Kim, few people were inconvenienced enough to make use of it.

That was the only kvetching that turned up in a Google news search as power was being restored yesterday afternoon, and only a relative handful of people took to Twitter to complain. PG&E is a particular punching bag on Twitter: the proactive power cuts didn’t add much to the vitriol that’s regularly directed at the company. But there’s a somewhat different group of people affected today. Stay tuned.

“Rate neutral framework”, whatever that is, promised as PG&E offers plan to pay wildfire costs and get out of bankruptcy

by Steve Blum • , , , ,

PG&E filed its plan for coming out of bankruptcy with the federal judge handling the case yesterday. The company proposes to give $8.4 billion to those harmed by wildfires over the past four years, both individual and public agencies, another $8.5 billion to insurance companies that have already paid out claims resulting from those fires, as well as a previously agreed $1 billion to a group of northern California public agencies.

In a press release, PG&E’s CEO, Bill Johnson, was quoted as saying the reorganisation plan is a “rate neutral framework”, but didn’t elaborate. Media outlets have interpreted it as meaning that wildfire settlement costs won’t be passed onto electric customers, but there’s potentially a lot of weasel in those few words. The press release also promised “participation in the state wildfire fund established by Assembly Bill 1054” and “satisfaction” of its requirements.

AB 1054 was passed by the legislature in July, and sets up a couple of funds – one paid for by utilities, the other directly by their customers – that will provide a way of financing wildfire liabilities for Southern California Edison and San Diego Gas and Electric, and for PG&E if it clears the bankruptcy process by next summer. Since the $2.50 monthly charge for the second fund is already tacked onto customers’ bills, keeping it presumably qualifies as “neutral”. There are other ways to pass on costs to customers, directly and indirectly, so don’t assume that northern California electricity costs won’t go up even further if the judge eventually accepts PG&E’s plan.

The proposal also says that PG&E will honor existing contracts with community choice aggregators, lean energy producers and employees, and pay back its debts to lenders.

Just ahead of the filing, the City and County of San Francisco sent PG&E a letter offering to buy its electric (but not gas) system for $2.5 billion. It’s a follow up to a municipal power plan floated earlier this year by San Francisco mayor London Breed. According to the San Francisco Chronicle, PG&E unsurprisingly responded that the offer wasn’t in “the best interests of our customers and stakeholders”.

CPUC orders a do-over on PG&E–Crown Castle pole dispute decision

by Steve Blum • , , ,

White road attachment

A California Public Utilities Commission decision giving Crown Castle the right to work on Pacific Gas and Electric Company’s utility poles without permission, including attaching cables if PG&E doesn’t respond to requests for permission within a set time limit, was reversed on Thursday. Commissioners voted unanimously to send it back to the administrative law judge (ALJ) that originally heard it.

That doesn’t mean the substance of the decision will change, though.

PG&E based its request for a do-over on procedural grounds, claiming the CPUC didn’t follow its own rules for posting a proposed decision and giving the public – including particularly PG&E – the right to offer comments before a vote. Commissioners agreed…

We find that we did not follow the public review and comment requirement on proposed decisions, set forth in [the California public utilities code] and our Rules of Practice and Procedure. We grant rehearing and refer the proceeding back to the [ALJ] in order to serve a new proposed decision on the parties and provide the required public review and comment period (or issue a ruling, if appropriate, reducing or waiving the comment period). PG&E may raise any relevant remaining legal issues in comments to the proposed decision.

The core of PG&E’s legal objections is that the ALJ’s arbitrated decision ignored decades of past commission decisions and ran contrary to established policy for fairly, and safely, regulating the relationship between electric companies that own utility poles and the telecoms companies that use them.

ALJ Patricia Miles isn’t obligated to make any changes to the decision itself, and there’s no reason to think she will. The likeliest next step is for her to repost it with any minor changes to dates and such that might be needed. Thirty days later, or when ever the next meeting after that is scheduled, commissioners can vote again. In between, PG&E will have a chance to ask for changes.

Wildfires burn in northern California, but proactive power cuts might have limited the damage

by Steve Blum • , , ,

Thomas fire 2018 utility lines 300

Pacific Gas and Electric did two rounds of proactive cuts over the weekend, in response to warnings of high fire danger due to weather conditions. It was no false alarm. Cal Fire’s online map shows more than a dozen wildfires in PG&E’s territory, including the Sand Fire in Yolo County that’s grown to at least 2,200 acres. There’s no basis to speculate why any of those fires began – that’s a question for later.

However, there is reason to suspect that it might have been worse if PG&E hadn’t cut off electricity to approximately 23,000 customers in Butte, Napa, Solano, Yolo (but not where the Sand Fire began) and Yuba counties. Before power could be turned back on, PG&E crews had to inspect 800 miles of lines and, according to a PG&E press release, they “found instances of damage to de-energized equipment caused by the extreme weather event”.

Cal Fire pins Camp Fire blame on PG&E, but won’t release investigation details yet

by Steve Blum • , , , ,

Camp fire landsat

PG&E equipment started the deadly Camp Fire in Butte County last year, but the details of how and, perhaps, why are still under wraps. On Wednesday, Cal Fire announced that its investigation found that PG&E started two fires near the town of Paradise on 8 November 2018…

CAL FIRE has determined that the Camp Fire was caused by electrical transmission lines owned and operated by Pacific Gas and Electricity (PG&E) located in the Pulga area.

The fire started in the early morning hours near the community of Pulga in Butte County. The tinder dry vegetation and Red Flag conditions consisting of strong winds, low humidity and warm temperatures promoted this fire and caused extreme rates of spread, rapidly burning into Pulga to the east and west into Concow, Paradise, Magalia and the outskirts of east Chico.

The investigation identified a second ignition sight near the intersection of Concow Rd. and Rim Rd. The cause of the second fire was determined to be vegetation into electrical distribution lines owned and operated by PG&E.

That conclusion is backed by a full report, but consistent with past practice it’s been forwarded to the Butte County district attorney’s office for use in the ongoing criminal investigation into the blaze.

That doesn’t necessarily mean that Cal Fire thinks PG&E broke the law. Butte County DA Michael Ramsey started his own criminal investigation last November, and the full report was sent to him. According to a Bay City News Service story, he won’t release it “until a final decision is made on whether to file criminal charges”.

Cal Fire’s conclusion comes as no surprise to PG&E, which has been working under the assumption that it will be held responsible for the Camp Fire, given the way California utility liability laws work. Even if PG&E (or any other electric or telecoms company that uses utility pole routes) did everything it was supposed to do, if its equipment started the fire, it has to pay the full damages.