Pacific Gas and Electric (PG&E) has a lot to answer for. The California electric utility company’s faulty transmission lines were widely blamed for causing last year’s Camp Fire, which killed eighty-five people and destroyed 18,000 structures. Last week, it cut off power to millions of people as a clumsy precaution against history repeating itself. Meanwhile, as former Public Utility Commission administrative law judge Steven Weissman notes, “it’s not inconceivable that PG&E’s electricity customers, who already pay comparatively high prices, could see those rates double if wildfires continue at the levels we have seen recently.”
All of these problems have a common cause and a common solution. PG&E and other utilities should be brought under public ownership.
California governor Gavin Newsom made headlines by slamming the company for the “scale and scope” of the shutoffs. He made clear that he’s not against de-energizing the grid to minimize wildfire risk. Indeed, he noted that many lives were lost because of PG&E’s failure to do exactly that in the Paradise area last year. Even so, there’s a world of difference between small-scale, surgically targeted shutoffs and simply telling millions of people that they’d have to go without power for several days on end. If a company like PG&E is going to be given a monopoly and allowed to extract profits from a captive customer base, it has a responsibility to provide energy whenever those customers need it, whenever this is at all possible.
Newsom followed up his lecture with a letter calling on PG&E to issue rebates to everyone who went without power — $100 to residents and $250 to small businesses. In response, the company put out a statement saying that it had “received the Governor’s letter” and “appreciated its intent.” This is corporate utility–speak for “lol no we’re not going to do that.”
The reason the company can respond this way is that PG&E president and CEO William D. Johnson isn’t appointed by the governor or approved by the legislature. He’s responsible to a board of directors and ultimately to shareholders—mostly “institutional investors” (read: hedge funds). The company is regulated by various levels of government, of course, but even there, the influence goes both ways. Ten years ago, when PG&E — since bankrupted by litigation resulting from last year’s fires — was riding high, it was named and shamed by the nonpartisan Public Campaign for being one of thirty major corporations that spent more money on lobbying than it paid in taxes.
The Socialist Solution
As it stands, ordinary people have no control over PG&E — as citizens, or even really as customers, since a dissatisfied Californian can’t just pick an alternate utility. Various deregulatory schemes seek to target the second part of the problem, but even on their own terms that doesn’t really work for natural monopolies like power companies. A better solution was described last year by Spencer Roberts:
Under a universal single-payer power program, each home would receive a per capita energy dividend based on the average usage in their region. If they exceeded their dividend, they would receive a bill. If they greatly exceeded it, they would enter a new tier where they paid a higher rate per kilowatt hour. Tiers would be structured to penalize excessive consumption and reward efficiency. Revenues could be used to develop clean energy infrastructure and retrofit existing buildings to provide energy as efficiently as possible. We pay for it with taxes, but we eliminate energy bills. On net, we save money. Sound familiar? It’s the same proven model as Medicare for All: remove a predatory profit motive from an indispensable public service.”
Bernie Sanders’s bold plan for a Green New Deal would begin to move us in this direction. (The day he announced the plan, Senator Sanders toured the burnt-out ruins of Paradise.) His plan gives preference to publicly owned utilities on both the state and city level as well as to private cooperatives. This is head and shoulders above anything any other candidate has proposed.
In the long-term, though, we shouldn’t stop at such a patchwork approach to electricity production. The example of public schools should remind us that public ownership is entirely compatible with severe imbalances in quality between richer and poorer areas. What we ultimately need is a single national electrical service — one that will be run to benefit the public, that is safe and won’t cause massive wildfires that kill people and uproot their lives, and that can be retooled to fight climate change.
Taking the profit motive out of the equation won’t magically solve every problem. It’s entirely possible, for example, that a publicly owned system in the process of updating old equipment and changing aboveground lines to run underground might face the sort of choice PG&E faced last week about how to balance the danger of sparking wildfires over the chaos caused to residents by turning off their power. Whatever the right call may be in given instance, though, we can be sure that it would be better to have it made by public officials democratically accountable to the people who have to live with the consequences.