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PG&E claims no connection between rate increases and $2.2B jump in earnings (abc7news.com)
129 points by _dp9d on March 4, 2024 | hide | past | favorite | 120 comments


For people outside USA/California, PG&E serves gas and electricity to two thirds of California.

They're featured in the film Erin Brockovitch for knowingly dumping 1400 million litres of hexavalent chromium contaminated water in the 50s and not informing the water board until the 80s, resulting in countless cancer deaths in Hinkley, California.

Their equipment has led to many wildfires (eg, approximately 40 of the 315 wildfires in PG&E's service area in 2017 and 2018 were allegedly caused by PG&E equipment). They've been guilty multiple times of criminal negligence, including for gas explosions (see comments below from epistasis and toomuchtodo).

They've had controversies surrounding tax dodging, deforestation, dirty tactics to maintain monopoly, collusion with regulatory agencies, and rates that are among the highest in the US (eg, electricity rates in 2021 were 80% above the national average).

Overall, a real treasure of a utility company.

https://en.m.wikipedia.org/wiki/Pacific_Gas_and_Electric_Com...

https://en.m.wikipedia.org/wiki/Pacific_Gas_and_Electric_Com...


One of the many times they have killed: eight people in San Bruno in 2010 due to a gas pipeline explosion:

https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion

> On January 13, 2012, an independent audit from the State of California issued a report stating that PG&E had illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses.

This while charging unbelievably high rates for some of the worst reliability rates I have ever seen anywhere in the US.


That isn't really on the same scale as 1.4 billion litres of hexavalent chromium. I'm not sure if they are meant to be the same incident, but at $10 million/life, $100 million in savings at cost of 8 lives would be an appropriate design choice. We have to draw a line somewhere. I don't think that is the comparison you're trying to draw, but I'm not sure what you are trying to say, so...

Life be risky. Perfect safety is not a reasonable goal.


It's not $100M savings, it's $100M paid to executives, illegally, instead of on the safety repairs.

As far as whether trading $100M is an appropriate tradeoff for 8 lives, well.... let's hope you never are in a position to make a choice between $10M and a person's life.


> well.... let's just say that I wouldn't be spending any more time around you if I could put a face to that statement. Come on.

I suspect I could be any civil engineer, assuming that I didn't remember the wrong order of magnitude. Decisions have to be made about how safe to make things. It is quite difficult to do that without putting a dollar figure on human life, and AFAIK it is order of magnitude 10 million.

Otherwise when do you stop bubble wrapping infrastructure?

The numbers are close enough that they probably were skimping, but we can't tell that from the outcome of 8 people dying.


You continue ignore that money was illegally taken from safety funds to pay executive bonuses.

This is not an engineering tradeoff decision. That's not even relevant, and it's weird that you would invent such a situation.


US DOT maintains a valuation of a statistical life specifically as a metric for this reason. (https://www.transportation.gov/office-policy/transportation-...)

For 2012 it was 9.1 million. So 8 people doesn't quite get us to 100 million, but it isn't far off.

Also PG&E absolutely doesn't deserve the benefit of the doubt on their safety culture.


Cars are one of the main causes of death in the US, and we just accept it. So perhaps DOT can get away with it. But we do not accept this tradeoff in, say, approval of medical devices or drugs.

I doubt Boeing is happy with the tradeoff of counting lives in millions of dollars right now.


> But we do not accept this tradeoff in, say, approval of medical devices or drugs.

It is applied in hospital care though, they have the same problem that they also have to cap spending somewhere. A bunch of people could technically survive but die because they can't afford care. Since care is rationed by more direct economics than design that means it would be capping out at figures far lower than 10 million/person in practice.

> I doubt Boeing is happy with the tradeoff of counting lives in millions of dollars right now.

The public reaction to Boeing is a bit hypocritical though, because of the road transport example. No-one would bat an eye at a delivery driver on a motorcycle but that seems to be a comparable level of risk to these Boeing planes. Consistent standards should be applied between different modes of transport.


When the wheel falls off of the motorbike, it has pretty limited crash damage compared to a plane.


Don't forget that incident also leveled 35+ houses; damaged more, and injured 58 people, some badly.


The PG&E rates are hard to believe for anyone outside their grip of death. From my February bill:

peak: 53.0 + 18.3 = 71.3 c/kWhw

partpeak: 51.3 + 11.1 = 62.4 c/kWh

offpeak: 34.4 + 09.8 = 44.2 c/kWh

Electricity is my third largest monthly expense (after mortgage and food) but at the current rate of increases, it'll be the second largest in a few years.

This is for a tiny house with nothing special using electricity.


What the actual fuck. I live in Germany and pay ~35c/kWh, I thought power was supposed to be cheap in the states.


The US is big. It is very location dependent and whether your utility is private or public.

I live in rural Washington and my rate is $0.0634/kWh. My utility is a public one and also non-generating. The power comes from a Federal agency(Bonneville Power Administration) which is is in turn overseen by the Department of Energy.


In bengaluru, which is notorious for is high electricity rates, I pay an equivalent of 10c a unit. As a part of a government subsidy, my first 200 units are free too!


I believe that PG&E, even more than high housing costs, is going to ruin California. The costs are already so astronomical and they keep rising so fast, that it's becoming more and more unreasonable to afford. Even on a silicon valley salary, those bills are shocking.


What are the two things summed? Are they really both c/kWh? Just confused because in the UK they'd be p/day and p/kWh respectively, and the numbers look 'in the right ballpark'. (Except that it would be mental to have the standing charge vary according to peak/not time.)


Assuming it’s the same as my PG&E bill, it’s split into “generation” and “delivery” charges.


As the other post said, the numbers are delivery cost (the larger number) and generation (the smaller one), both are cents per kWh.



Are companies like this not proof that the free market system does not exist? I mean how could PG&E still exist if this were the case?


What do you mean by "free market"?

In any case, that might be a tangential, as regulated utilities are decidedly what nobody thinks of as a free market. They are a monopoly, but trade off regulation of their pricing and investment decisions in return for the monopoly status.


> What do you mean by "free market"?

I mean the concept that bad actors in a market will eventually die out because new competitors will emerge that offer better value which will then get all the business.



> Their equipment has led to many wildfires

Who are the antagonists in this story?

California decided that people who live in fire areas deserve (1) the last marginal sales price of the homes in their burnt down area (2) paid by taxpayers, in disguise, through their utility bills (3) and in exchange, get what?

Why should anyone be living in the places where these ancient powerlines are?

The essentially infinite land the US + cars have played an important role in keeping home prices from rising to truly stratospheric levels in the urban US. So I understand that it also benefits many communities to have the escape valve of this housing.

But there must be better land and better places than wildfire prone California. You have to draw the line somewhere. There are people who in the same breath say PG&E is the antagonist, that they are to blame and not the recklessness of the communities that live in these places; but then, they complain about wetland restrictions being rescinded and that taxpayers should not be paying for repeat flood victims in Florida, Louisiana, whatever, in red states. It's the same fucking thing!

I don't know why the money to achieve this ridiculous compensation scheme has to meander through the utility company's liability. Obviously if it were an ordinary tax - I mean, it's a tax, that we're paying, through these utility bills - people would not do it. The only reason PG&E liability is on anyone's radar is because of some kind of complex political shenanigans that I do not understand and I wish were not a part of my community at all.


It's only wildfire prone due to the incompetence (corruption?) of PG&E and public forest management. Your argument only works if people aren't the cause of a significant amount of the risk.


Dont the utility regulators and local governments allowing property owners to put themselves in harms way get any blame in this?


This comment reeks of victim blaming. Natural disasters happen literally everywhere on earth. When someone's house is destroyed by a tornado in Tornado Valley do you tell them "Oh well you were really irresponsible for living in tornado valley"? Or how about Florida, which has been hit by over 40% of US-landfall hurricanes? Do you tell the hundreds of thousands of people whose homes have been destroyed that they should have just packed up shop and moved away since they get regular hurricanes?


> "Oh well you were really irresponsible for living in tornado valley"?

um, yes? I mean if you build it from cardboard especially. that doesn't mean they deserve no support, of course they do, they most likely live in some by-thy-bootstrap central crazytown), but it's not a good strategy to keep encouraging/enabling living/building without the appropriate measures to make it sustainable. (ie. heavy duty sprinkler systems with enough water, sufficient clearing, etc.)

one of the important functions of the state is to inform people of risks, and in a neoliberal setup it is also ought to enforce that markets price in those risks.


Obviously I believe that governments should support people suffering from natural disasters, and that even huge amounts of money given directly to victims are an appropriate way to deal with disasters.

> Natural disasters happen literally everywhere on earth

Taxes also happen literally everywhere on Earth. This is an article about rate increases, not natural disaster policies. But like natural disasters not all taxes are the same.

My neighbors have voted themselves a tax benefit where they've been paying property taxes as though their homes are worth 0.01-0.05x what they are, for years. Read all about it here - https://en.wikipedia.org/wiki/1978_California_Proposition_13 - it's the single most important law in this state, if you live in California you ought to understand what it is.

So if I bought a home in San Francisco, I would pay normal taxes like "everywhere else on Earth." But not these folks.

Let's say there's an earthquake in San Francisco and a bunch of crumbling 100y old Victorians valued at $1.5m but whose owners have been paying taxes for decades on as though they were valued $40k-300k - those crumbling houses fall apart. Should we pay every resident in a crumbling Victorian they haven't maintained at all, in communities whose schools and roads and institutions they have not been paying for, yet simultaneously benefitting from their land values rise as a consequence of the human capital arriving every year and sort of have nothing to do with, and they also haven't been paying any meaningful taxes: should we give them a giant check as though they sold their home, at market prices when only 1-5% of home inventory moves a month, in that no longer existing city that wasn't earthquaked?

Listen this would affect me, I mean I know I would love a check that lets me hit the "reset" button the event of a natural disaster, but there was actually no universe in which I live here and benefitted from not paying taxes for decades. That was never given to me as a literal constitutional right it was to people who basically won the lottery.

So who is the antagonist? This is what I am asking you. It's so easy to come from a place like whatever community you live in, where things follow normal rules and you can be pretty confident that your neighbors deserve full and just rescue. But my neighbors have given themselves an entitlement that yielded all sorts of crappy disfunction and I'm not the only person who is sick of that bullshit.

The fire prone areas in California just synthesized their bullshit into some weird ass rigamarole where other Californians pay for that bullshit through the utility company.


Californians are uniquely bad at handling wildfires. Fire is perhaps man’s oldest enemy. We know how to handle it through preemptive controlled burns. California just refuses to implement them.


No, PG&E is uniquely bad at maintaining infrastructure. The fires were caused by century old towers with hooks that have literally worn out:

http://www.wsj.com/graphics/california-wildfire-pge-drought/

( https://archive.is/2023.08.17-195423/https://www.wsj.com/gra... )


Every American utility company I have ever looked into has numerous crimes and controversies associated with it. It's kind of weird.

I actually suspect it's due to them being publicly traded. They literally are not allowed to do things that would jeopardize the share price, so they will hurt themselves and people in order to make a minor profit increase YOY. You shouldn't need to be a capitalist enterprise (with the whole "infinite revenue growth" thing) if your purpose is just to make sure your customers - who won't ever really grow much, because, you know, only so many babies born etc - have power, water, etc. But as publicly traded companies, their first purpose is just to increase shareholder revenue. If you end up (accidentally) burning down a forest, poisoning some communities, or compromising a state election with a fake candidate, that may just be an unfortunate side effect in the service of increasing the stock price.


"Fiduciary duty" is probably the single most damaging policy/legislative decision that was made in US history. Even though it technically doesn't force companies to chase short term gains above all else, it still creates enough perverse incentives to create a lot of harm.


The public companies also suffer from corruption and such. I guess there just must be some law of a universe where if you have a sufficient sized captive base of income, people who might be inclined to abuse their position to take advantage of the situation will strive to take advantage of the situation. Then it becomes not a matter of if there is any corruption, but when will you end up with a corruptible individual in a position that can be corrupted.

Maybe these organizations or government bodies can be organized like a RAID away. Mirror these positions of power and use redundant pools. Identify corrupt bits by comparing results between these mirrors and hot swap the corrupted positions for a new candidate. Incrementally replace your array on schedule to avoid chance of future corruption and to mitigate batch effect.


IMHO the problem is that utilities are like no other company in that they have a monopoly but are supposed to be reigned in by regulators. But the vast majority of regulatory bodies are either captured or incompetent at regulation.

Public versus privately traded doesn't matter as much as the fundamental conflict, wherein they profit more when the costs increase, and there's no penalty for literally killing people.

HIPAA violations result in jail time for executives. Meanwhile PGE illegally raids safety fund accounts to pay executive bonuses while regular people are killed due to failing infrastructure.

CPUC and PGE executives need to face serious consequences, and most certainly jail time, for their malfeasance.


Maybe every publicly traded company should be subject to a fiduciary liability: when convicted, the judge can order an imposed hit on share price, and forbid dividends for a lengthy period.


The presumed legal duty to break the law in the interest of shareholders is grossly exaggerated... Nobody can sue you for failing to commit a crime on their behalf.


Goddam weird how we treat a corporate as though it has history and morals: PG&E is not a person.

Projecting past crimes and predicting future actions makes zero sense.


Unlimited year over year growth is cancer, and it's killing most of us. A lot of other companies are raking in records profits as well.

[Edit]

Much of these profits have just as much justification as pg&e - "I want more."

[Edi]

Wow, they have the audacity to say the profits are "primarily driven by an increase in customer capital investment," as if customers chose to give their money away.

https://www.pgecorp.com/news/news-details.d78413bf-71e9-4a77...


Profit is not a problem. The problem is PG&E is pretty much a monopoly enabled by Californian state.


Why is the state government so adverse to nationalizing them vs allowing them to leach off of their collective customer base? $2B in profits after a rate hike? Outrageous. Who cares what it costs to nationalize at this point, y’all are already getting raked over the coals with no end in sight.


I think in part this is bc PG&E donates to a bunch of political organizations, office holders and candidates. They don't even spend all that much ... But since there's not a "nationalize the utilities" PAC making comparable donations, PG&E will stick around. A few years ago there were stories about how PG&E had continued to make political contributions while their victims/victims families settlement fund was partly in stock bc supposedly PG&E didn't have enough cash.


It’s already nationalized, just in a much more clever way. Now pols can dump backpocket money to their friends, yet still point the finger at evil corporations.


> $2B in profits after a rate hike

$2B were because of rate increases in 2022 and 2023. Technically the rate hike is after $2B profits, which is somehow even worse


Why? Two big reasons off the top of my head:

1. Because then they'd have to pony up the money to capitalize the company, which now, is done by shareholders.

2. The next major screw up and the government would be blamed, not a company, so now votes are at risk.


Nationalizing them is likely to have far worse outcomes and the entire company would turn into a leech that neither produces electricity nor makes profit.


Honestly I have no idea. They are a D-tier company in really any metric, it’s amazing they’re still in business after how many people they’ve killed. If I had to guess it’s because Newsom is eyeballing 2028 and it could be a bad look. If not for centrist voters, then for larger corporate donors.


You know with this state being how it is, pge will manage to put it in front of voters and confuse them enough to vote against their own interests.


Correct. They donate to right politicians (both on left and right).


I don't think they said profit is the problem. They said it being expected increased profits year on year is the problem.


Profit at any cost is absolutely a problem.


Profit in free markets drives competitors to come in and eat those profits.

The problem we have right now is that BigCos use government to erect barriers to entry.


The problem becomes when growth of profits is the only driving metric. At some point the company will look at ways to screw over any entity outside of the company to ensure profits and growth. Sure they erect barriers but this issue is prevalent among all big companies in the US.


There are plenty of monopolies, duopolies, etc in the "free" market that have nothing to do with governments. Example: How broadband companies share the map and don't intrude into each other's "territories".


They're literally granted monopolies by local governments.


Largely in part due to regulatory capture; it is not necessarily innate of a government to cause this. Maybe restrictions on how corporations are able to influence governments to act against their constituency might solve this problem, rather than giving corporations carte blanche to do anything...


Both ISPs and PG&E are monopolies/duopolies by government mandate. Those markets are incredibly far from the capitalist ideal of a free market.

What you're looking at is corruption, not capitalism.


When the capital investment to compete with large players in the ISP/electricity market is enormous you will, eventually, end up with a monopoly either way.

Laying cables for internet/electricity is expensive, I cannot comprehend why the USA hasn't understood this particularity and hasn't attempted to create a publicly-owned national grid and fibre infrastructure where providers can plug into and offer internet connectivity and electricity production over it.

You do not want multiple competing companies laying down their own electricity cables, nor internet cables, it's wasteful and just creates a huge barrier for any competition to appear...


Other countries have tackled this issue by regulating that the company that owns the cable and the company that provides the service over the cables are separate entities, frequently with the cable owner being the state.


You are right, I forgot about that. I guess it is capitalism/greed induced corruption.


BigCos using government to erect barriers to entry isn't a distortion of free markets. It’s an inherent outcome of capitalism's maturity, where monopolies and oligopolies emerge naturally.


Public utilities don't operate in a free market. It's not possible, the infrastructure is public.


Power grid operators are basically a textbook example of a natural monopoly. In other words, it wouldn’t make sense to have multiple companies running power lines to houses. This isn’t like a coffee shop where it makes sense for there to be multiple in the same neighborhood competing on price.


It would make sense to have public wires built the same way as roads, and private power companies that I pay to put power into the grid, that compensate for the power I draw out. If the natural monopoly is the wires, so be it, but there's no natural monopoly on solar farms.


If we’re going to have a public road system I don’t see why the grid should be privatized. Why should the grid be run at a profit but roads be run at cost? Is PG&E really doing a much better job as a private company?


The government can require that the lines must be available for rent to other power providers. Such that consumers can pick provider independently of whom builds or maintain the lines.


I’m not sure whether you will agree wholly or partly with this, your comment can be read more than one way. But several child commenters seem to be reading it as “Government is not the solution to our problems, government is the problem”. So I’m going to address the ever more psychotic Reaganomics that still haven’t “trickled down” 40 years later and how that ties into the energy situation in California. He won his second term the year I was born, in California, so I watched all of this since like, 1989 and was hearing about it in the womb.

Enron is arguably the nastiest collapse of any large company due to sanctioned crime, there’s just not another word, a bunch of people went to jail.

They lobbied to get energy business de-regulated, and it was so extreme that they had the pull to get something like half the base load generation turned off, spiking the price per kilowatt hour over 4k USD at one point, fire departments were rescuing people from elevators in blackouts.

Capitalism sounds awesome: I hope I live to see it. But it’s not practiced in the United States in any credible way: you’re always hearing “it not what you know, it’s who you know”, “you get jobs through your network”, “the value of an Ivy university degree is the people you meet”. “The YC network is an advantage no startup should turn down”.

That’s not capitalism, that’s how to get a decent pair of shoes in East Berlin in the 1970s. Or so I’ve been told.

Our system is a capture kleptocracy with a core economic engine built around “indentured” labor, and has been since Jonestown Virginia in the 17th century. For a time people from Africa got by far the worst of it to date, that’s substantially (though by no means completely) addressed now, and now you see headline after headline (like this one) about staggering corporate profits, or stagnant wages, or both pricing traditionally solidly middle class people out of an existence in which they have any real choice about whether to work, for who, and for how much. If you’ve got a diabetic kid, and the insulin (that’s basically too cheap to meter anywhere else in the “developed” world), you don’t get to “negotiate the value of you labor on a fair, free, transparent, and competitive marketplace. That’s just one example of one friend who got popped with a pay decrease recently and has no real option but to take it.

Dumbass children(-in-law) will be hanging around the White House, doing crime no matter who wins the next Presidental Election. You see the occasional wealthy or successful person who friggin ground it out from nothing, those people exist, everyone knows a few examples, but it’s not a defensible claim that this is typical.

Jon Stewart (who for some reason is not regarded as patriotic by many in spite of choosing better treatment of 9/11 first responders and their families as his “wedge” issue, laboring tirelessly and often shaming corrupt Congresspeople by standing on their steps personally), recently interviewed Larry Summers (who brought you hits like crippling the CFTC in a no minutes hatchet job on Brooksley Born, who called the 2008 financial collapse and regulated the derivatives and would have personally prevented the collapse):

https://youtu.be/tU3rGFyN5uQ?si=E6bLq1jYxRMeqpc6

Judge for yourself, but Summers sounds pretty full of it I think, and I think there’s a grudging consensus around that.

The topic being a planned increase in unemployment (openly declared by the FOMC) to reduce wages (this is for real) to combat inflation (as defined by the CPI and a dartboard).

Stewart’s assertion, and I think, that of any humane person, is that corporate profits can’t be shattering record after record while wages are suppressed in broad daylight.


Good analysis, but one point: you say that's not capitalism, but something else. I'd say that is capitalism working as intended.

There is really no other end-state to capitalism than a winner-takes-all race to the bottom, where everyone but the big owners of capital get completely screwed.


PG&E's rates and operational budget is approved by the California government. They can't just raise rates on their own. Or spend less to make more profit.

So consider the profit "CA government approved". Does that make you feel better?


PGE charges me 50c/kwh just to deliver my power. I still spend an additional 12c/kwh for it to be generated. My bill last two months were $200 each for a 1 bed in SF. Insane.


At this rate, the cost of electricity in SF is going to rival the cost of gasoline for an EV. That's already the case in some places in Europe.

In SF, gasoline is roughly at $5/gallon. If your ICE car gets 31 mpg but your electricity works out to be $0.70/kWh on an EV that gets 4.2 mi/kWh (eg Tesla Model 3), you're ever so slightly better off choosing an ICE vehicle vs an EV in a strictly financial sense in that case, according to chooseev's calculator*.

* https://chooseev.com/savings-calculator/


Yes, Model 3 charging works out about the same sa fuelling a Prius C.

One would think solar is the answer given such price per kWh. PG&E have lobbied for NEM3 and got it, to make rooftop solar less viable, look that up!


"there's nothing wrong with lobbying, its just how corporations participate in democracy"

i have seen this argument made and anyone who holds that opinion should look at this comment, and have a long hard think as to whether they still think that's a good thing


The cost of gas has come down in the city - around $4.30/gal for where I fill up. So yes, it’s actually cheaper to drive an ICE than an EV in SF.


In Florida FPL has an unlimited non peak hours EV charging plan for around $30 a month. Imagine your bill for driving each month never exceeding $30.



Where in Europe is gasoline only $5/gallon, or do you mean their local rate for gasoline?

I was surprised recently when BC’s gas prices were about the same as WA’s, it’s almost always been more expensive in my lifetime.


edited my comment to say that SF gas prices are $5. It was two separate thoughts. The broader point is that gasoline vs electricity is energy either way, and the cost of different kinds of energy aren't always going to favor electricity in San Francisco in the near future, it seems.


One thing to consider is energy independence. It’s maybe more relevant in Asia and Europe, but not having your cars depend on imports is a huge win if you can manage it. For CA, the whole PG&E thing is a mess, I’m in the PNW and my EV is insignificant to fill while our gas prices best CA.


I have a Rivian. It's equivalent to 16.7 mpg given its mi/kWh, and electricity and gasoline costs.


For the last few months, we have done our best to reduce both our electric and gas usages. Unfortunately, regardless of however much we reduce, each bill came higher than the one before.


This has roughly been my experience in San Diego with SDG&E as well. We are renting with mostly older appliances, including an electric water heater that with an energy rating sticker suggesting a cost of nearly $100 month - the numbers look much better on it because they use 12c kWh lol.

We do nearly all vacuuming, washer, dryer and dishwasher on the weekends when it's cheapest. We don't use an AC or heater. But, we do cook nearly every night on an ancient electric stove and I do work from home with 1 or 2 32" monitors. It seems impossible to pay much less than $150 month.


I moved somewhat recently from Seattle to SF. The electricity in Seattle was 7c/kwh when I was there. I did the math, it would have been cost-effective to heat my home with bitcoin mining, because electricity was so cheap (but GPUs - not so much).

My partner likes to use a space heater to warm the bathroom during the morning. It costs almost $1/hr to do that in SF with a 1500w space heater. We also spend $200 a month on electricity now, and we don't have an EV, and we have a gas stove and clothing dryer.

I miss my $5 electricity bill from when I was single in Seattle.


That's insane. Are they sweeping all the state/city mandates into the delivery charge?

Example from the SE: base charge of $35 (static, I believe) + 10.6c/kwh.


> Are they sweeping all the state/city mandates into the delivery charge?

Nope, not on my bill.


If you want cheap power you need a public provider. LADWP charges 16-21c/kwh depending on your usage.


But you are saving the climate


PG&E has also done everything they can to stop San Francisco from providing its own power. But hopefully that's finally coming to an end:

San Francisco is taking the biggest steps in history toward creating a full public-power system.

In filings with the California Public Utilities Commission, the city has established that PG&E’s local property is worth about $2.3 billion—and if the commission agrees, the city can move to seize those assets under the power of eminent domain.

https://48hills.org/2024/03/after-111-years-sf-is-finally-mo...


Seems like an absurdly low number, $2.3 billion couldn't even recreate a fifth of the current electrical grid in SF.


So they should be able to drop prices without it affecting earnings


What would happen if the state took ownership of distribution and ran it at $0 profit? Customers could choose any generation service they like.

Any downsides?


Urban ratepayers would still be subsidizing the infrastructure upgrades, utility undergrounding, and legal settlements involving wildfires in more rural/wildland areas. Profit notwithstanding, there's a reason why SMUD (Sacramento Municipal Utility District) rates are significantly lower than PG&E: https://www.smud.org/en/Rate-Information/Residential-rates.


Well, profit is about 10%, so peak rates for electricity could drop to $0.63/kWh instead of $0.70/kWh, which is still a ridiculous rate, even in California.

And instead of shareholders capitalizing the company, the government would need to use tax payer money.

And worst of all, when the state company fucks up, then the politicians would take the blame and might lose votes.

#1 and #2 are possible, but #3? Never going to happen in California.


Certain political parties hate anything not making a profit, even government services, so the major downside that I see is getting politicians to agree to it.

For what it's worth, I agree with you and feel many things should be turned into non-profit government services.


> Certain political parties hate anything not making a profit

Since we're talking about the one party state of California, I assume you're talking about Democrats.


That's literally communism.


State-run services are not communism. Don't be obtuse.


Yes.

It works in much of the world. Plenty of places have have government run the power companies.... like, for example, the capital city of California, or the largest city in California (LA). And SF, another major city, is looking into having a municipal power company as well.

I grew up in a small town on the east coast, and we had a municipal electricity company. Service was better and cheaper. And we got discounts on next month's electricity if the company accidentally ran a profit the prior month.

Americans have such a visceral reaction to their own perception of communism they forget that it can work, even in America.


We have state owned electricity company and it's not communism ( very loaded term )


Download the General Rate Case (GRC)…all 1000+ pages, on the CPUC website and see how much control PG&E has over its operations and rates.

https://www.cpuc.ca.gov/industries-and-topics/electrical-ene...

(Hint: it’s near zero)

PG&E can’t fill their toilet paper dispensers in their bathrooms without CPUC’s ok. Ok, a slight exaggeration, but things like replacing a chain link fence on a substation that costs $200k gets rejected. That’s how detailed CPUC gets into PG&E’s operation and finances. Keep in mind it took 3 years for PG&E and CPUC to finalize these rates. They started in 2020.

You’re probably asking, who the hell is CPUC? And who nominates those on the CPUC board? Governor Newsom. He nominates them directly.

My theory is keeping PG&E private provides a convenient whipping boy for the state politicians. If it was made public then all those problems would be Newsom’s (political) problems? Right now? Newsom gets votes for his “tough talk” about PG&E which is hilarious to me.

Newsom! PG&E? That’s you buddy!


PG&E is an investor-owned regulated monopoly. Other utilities in California are publicly owned (either government, or non-profit. For example, LADWP, SMUD, Palo Alto, Turlock and many, many more). Those publicly owned utilities have much lower rates.

PG&E has a "revenue requirement" which is the amount it needs to bring in to cover operating, energy procurement, construction, and profit. At the most simplistic level, rates ($/kWh) are set by dividing the revenue requirement by the anticipated quantity of electricity sold.

The amount of profit it is allowed to make it determined primarily by how much it has invested to safely and reliably deliver electricity. Some of that is regulated by the Federal Energy Regulatory Commission (FERC). Something like a 9% return on equity for investment.

This creates a misalignment of incentives: PG&E would rather spend CapEx than OpEx. This is the market failure (of the natural monopoly) that the regulator is supposed to address.

However, PG&E's lack of maintainence on a metal hook (over > 80 years) which eventually failed caused the Camp Fire. Instead of replacing all of the hooks (a relatively inexpensive OpEx), PG&E proposed, and the CPUC blessed, an incredibly expensive effort to underground transmission lines. [0] This is a windfall for PG&E's investors and organized labor in California. But a huge headwind to the economy of California, and California's efforts to electrify. As others have noted, PG&E's rates are now so expensive that driving an EV doesn't save materially (or at all) over gasoline (even with California's relatively high gasoline prices).

[0] https://www.wsj.com/us-news/climate-environment/pg-e-wins-ap...


Here in Ontario we are similarly bent over the barrel by Hydro One. The key to operating a regulated monopoly is to inflate your expenses so that the regulator has no choice but to approve the increase the rate you charge. Hydro One accomplishes this by sending out 6 people to do a job that only requires 2 or 3. Works great -- our delivery rates have never been higher!


I'm constantly amazed by the fact that in California, one of the world's most expensive places to live, with a GDP rivaling that of some countries, a company like PG&E is responsible for providing electricity and gas. Surely, we can expect a higher level of service?


I love how at the bottom of the article it says, "In the meantime, if you do need help paying your PG&E bill, there is help available here."

Click it and it goes to a 404.


I wish it was just an image of a middle finger.


"Increased profits have nothing to do with increased rates" is like saying "the wetness on your leg has nothing to do with me taking a leak on it." I don't know if they think people are stupid, or if they just have a monopoly of they're little slice of the country so there's nothing anybody can do.


If you want to actually stick it to the PGE investors, consider opening a short position during wildfire season.


I mean, technically they're right.

There's no connection between a rate increase on Jan 1 2024 and reported earnings for 2023.

Bad title.

But it will be curious to see how 2024 goes financially for them.


Sure,

> But the notion that anything coming out of our earnings report is in direct result of the rate increase, is completely false.

emphasis on the rate increase.

But of course there was a rate hike in 2023 as well:

The average PG&E bill may soon be going up a shocking $35 a month - Feb 3, 2023 https://www.sfgate.com/news/article/pge-utility-bill-increas...


PG&E has had rate increases in 2022 and 2023. There is no way they can claim no relationship between rate increases and profitability.

If anything, 2023 profits should then mean 2024 rate increases which were made on the claims of company losing money were unnecessary.


Rate increase means more profit. As PGE is granted a preset profit margin of revenues.


For the current year. Not last year.


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The use less energy comes from the fact that most energy production comes from fossil fuels and that messes up the environment/climate. If everythig is generated using solar you won't be hearing progressive saying use less energy


I feel like it has become a degrowth cult, may be not on HN but your random Karen in Oakland wants to cut down on energy usage all-together, not realizing that China is polluting on a monumental scale without remorse. Climate cult makes no sense in America: They lobbied their tails off in 70's and 80's against nuclear power, robbed America's future from their kids. America could have been way cleaner if we stop listening to woke idiots from California about energy policy.


Energy efficiency is about making it practically abundant.

With LEDs, energy is no longer a major limit on light for example.


LED light bulbs suck for the most part.

After all these years, we still don't have the following:

- 3000K-1800K dimming characteristics like halogen

- 100 CRI

- Truly Flicker-free

LED lights have only 2 things going for it: Long life and low energy usage. We can render the latter irrelevant if we make energy abundant and cheap.

You can't even buy Halogen in California, hope someone sues the shit out of them.


Everyone on Reddit keeps posting outrageous bills. Meanwhile we've never broken $200 in a 2000 sq ft San Francisco apartment. I just set the thermostat for 72 F and forget about it. Sometimes we then turn on the air conditioner to cool things down since the apartment is multilevel and we sleep on the top floor.

So, COULD_NOT_REPRODUCE


The delivery fee is different for every building in the city. I’ve been receiving $200+ bills and been asking around to friends and their delivery fee per kWh is less than mine, for whatever reason. Sounds like you got lucky.


That may well be true. I suppose then we should simply post our usage. Our highest bill (at $199.88) had 327 kWh total of energy consumption and 31 "therms" (apparently about 3.27 GJ) of gas energy. I would obviously prefer they measure gas by volume or mass of it provided but overall that doesn't seem outrageous.




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