Once again, PG&E’s impact on the public brought it negative attention and, this week, multiple competing proposals from California lawmakers that may drastically change the future of the utility.
On Monday, the stock price investor-owned utility parent company tumbled after a weekend of fire, widespread power shut-offs and the evacuation of approximately 185,000 residents.
Meanwhile, approximately 960,000 customers across the state, including almost all of Marin County, sat without power due to a widespread Public Safety Power Shutoff instituted by the utility.
In recent weeks, state politicians, including Gov. Gavin Newsom, have been more inclined to publicly criticize the state’s largest utility while Wall Street players continue to consider whether they’re interested in the bankrupt utility.
On Monday, Assemblymember Marc Levine, whose district covers Marin County and the southern half of Sonoma County, announced a plan to increase oversight of the utility by creating legislation to install a “responsible adult in the room to right PG&E’s wrongs.”
Under Levine’s legislation, which he plans to introduce in January 2020 when the next legislative session begins, the California Public Utilities Commission would create a test to determine whether a Public Administrator should be appointed to oversee PG&E.
The CPUC’s test would include “an analysis of PG&E’s financial health, the reliability of the utility’s infrastructure and its safety record,” according to a statement from Levine’s office.
“The Public Administrator would be authorized to work with PG&E leadership and make decisions necessary to restore critical infrastructure, ensure that proper safety protocols are followed and increase public confidence in the utility,” according to the statement.
The Public Administrator would remain in place until PG&E reached requirements of the test created by the CPUC. If the utility failed to meet the CPUC’s requirements again sometime down the road another Public Administrator could be appointed, Levine says.
Still, with two massive power shutoffs in October and several fires over the weekend that may have ties to PG&E’s equipment, the Legislature’s January session seems a long way off.
Now Berkshire Hathaway, an investment fund owned by Warren Buffett, may be in the running to purchase the utility.
At least, Newsom was reportedly supportive of the idea, according to a report from Bloomberg News on Saturday afternoon.
“We would love to see that interest materialize, and in a more proactive, public effort,” Newsom told the business publication. “That would be encouraging to see. They are one of the few that are in a position to make a significant run at this.”
Levine was not as interested, saying that neither Buffett’s firm, nor any other investor, would save Californians from “years of misplaced priorities” by PG&E’s management team. Furthermore, Berkshire Hathaway’s track record of investing in dirty energy sources, including coal, could cause concern in a state focused on reducing its impact on the climate.
In April, Buffett told CNBC that reports of Berkshire Hathaway’s interest in buying PG&E were “100 percent not true.” He has yet to comment on the reports over the weekend. However, after a disastrous weekend for the utility and its customers, analysts speculated about whether any private bidders will still be interested.
PG&E has already acknowledged its equipment may have involvement in starting the Kincade Fire in Sonoma County and another fire in Contra Costa County.
PG&E Corp’s stock prices hit $3.80 per share, a new low, by Monday afternoon.
Prior to the October 2017 fires, the company’s stock price briefly topped $70 per share in September 2017. The price fell with each successive debacle.
On Tuesday morning, U.S. Congressman Ro Khanna announced his support for a public takeover of PG&E.
“When you have a state that has Apple, Google and Tesla in it, there’s no excuse for not getting power to our people,” Khanna, who represents San Jose and nearby cities, said in a statement. “I’m calling on Gov. Newsom to support turning PG&E into a customer-owned utility. We need to have more municipal public utilities providing energy.”
While the push and pull between those calling for a public takeover of the utility and those advocating for continued private ownership has existed for the past 100 years, the current moment may be historic, according to Woody Hastings, an energy analyst at The Climate Center, a nonprofit in Santa Rosa.
(DISCLOSURE: This reporter completed an unpaid internship at the Climate Center in the summer of 2013.)
“PG&E is hugely vulnerable. This is a watershed moment,” Hastings said on Monday.
In the near-term, modern equipment—including local electrical grids, energy storage infrastructure, and production capacity—needs to replace PG&E’s dangerous infrastructure, Hastings says.
“Every penny needs to be reinvested into making safety improvements, developing a 21st-century system, and combating climate change,” Hastings said.
In his personal view, some sort of public ownership could help achieve those goals. Although existing publicly owned utilities in the state are not perfect, they are responsive to people, not profit, Hastings says.
Levine does not currently support a public buyout of the utility. PG&E’s aging infrastructure, including 90-year-old transmission lines in Marin County, would constitute a “massive liability” for anyone, public or private, who buys the utility, Levine says.
Levine also said San Francisco’s recent offer to purchase PG&E’s infrastructure within the city for $2.5 billion could increase the burden on other PG&E ratepayers.
Instead, Levine says someone acting in his proposed Public Advocate role could help PG&E right the ship.
The “adult in the room” would be in a position to guide PG&E to reinvest any shareholder profits into much-needed infrastructure improvements, Levine says.
