Is California's PG&E The First Climate Change Bankruptcy? (marketscreener.com) 410
"California's largest power company intends to file for bankruptcy as it faces tens of billions of dollars in potential liability following massive wildfires that devastated parts of the state over the last two years," reports the Washington Post.
Calling it "a climate change casualty," one Forbes contributor notes that PG&E's stock has now lost 90% of its mid-October value after a giant November wildfire, adding that "Future investors will look back on these three months as a turning point, and wonder why the effects of climate change on the economic underpinnings to our society were not more widely recognized at the time." Climate scientists may equivocate about the degree to which Global Warming is contributing to these fires until more detailed research is complete, but for an investor who is used to making decisions based on incomplete or ambiguous information, the warning signs are flashing red... there is no doubt in my mind that Global Warming's thumb rests on the scale of PG&E's decision to declare bankruptcy.
And the Wall Street Journal is already describing it as "the first climate-change bankruptcy, probably not the last," noting that it was a prolonged drought that "dried out much of the state and decimated forests, dramatically increasing the risk of fire." "This is a fairly new development," said Bruce Usher, a professor at Columbia University's business school who teaches a course on climate and finance. "If you are not already considering extreme weather and other climatic events as one of many risk factors affecting business today, you are not doing your job"...
In less than a decade, PG&E, which serves 16 million customers, saw the risk of catastrophic wildfires multiply greatly in its vast service area, which stretches from the Oregon border south to Bakersfield. Weather patterns that had been typical for Southern California -- such as the hot, dry Santa Ana winds that sweep across the region in autumn, stoking fires -- were now appearing hundreds of miles to the north. "The Santa Ana fire condition is now a Northern California fire reality, " said Ken Pimlott, who retired last month as director of the California Department of Forestry and Fire Protection, or Cal Fire. "In a perfect world, we would like to see all [of PG&E's] equipment upgraded, all of the vegetation removed from their lines. But I don't know anybody overnight who is going to catch up." PG&E scrambled to reduce fire risks by shoring up power lines and trimming millions of trees. But the company's equipment kept setting fires -- about 1,550 between mid-2014 through 2017, or more than one a day, according to data it filed with the state.
The global business community is recognizing the risks it faces from climate change. This week, a World Economic Forum survey of global business and thought leaders found extreme weather and other climate-related issues as top risks both by likelihood and impact.
Other factors besides climate change may also have pushed PG&E towards bankruptcy, according to the article. They're required by California state regulations to provide electrical service to the thousands of people moving into the state's forested areas, yet "an unusual California state law, known as 'inverse condemnation,' made PG&E liable if its equipment started a fire, regardless of whether it was negligent."
In declaring bankruptcy, PG&E cited an estimated $30 billion in liabilities -- plus 750 lawsuits from wildfires potentially caused by its power lines.
Calling it "a climate change casualty," one Forbes contributor notes that PG&E's stock has now lost 90% of its mid-October value after a giant November wildfire, adding that "Future investors will look back on these three months as a turning point, and wonder why the effects of climate change on the economic underpinnings to our society were not more widely recognized at the time." Climate scientists may equivocate about the degree to which Global Warming is contributing to these fires until more detailed research is complete, but for an investor who is used to making decisions based on incomplete or ambiguous information, the warning signs are flashing red... there is no doubt in my mind that Global Warming's thumb rests on the scale of PG&E's decision to declare bankruptcy.
And the Wall Street Journal is already describing it as "the first climate-change bankruptcy, probably not the last," noting that it was a prolonged drought that "dried out much of the state and decimated forests, dramatically increasing the risk of fire." "This is a fairly new development," said Bruce Usher, a professor at Columbia University's business school who teaches a course on climate and finance. "If you are not already considering extreme weather and other climatic events as one of many risk factors affecting business today, you are not doing your job"...
In less than a decade, PG&E, which serves 16 million customers, saw the risk of catastrophic wildfires multiply greatly in its vast service area, which stretches from the Oregon border south to Bakersfield. Weather patterns that had been typical for Southern California -- such as the hot, dry Santa Ana winds that sweep across the region in autumn, stoking fires -- were now appearing hundreds of miles to the north. "The Santa Ana fire condition is now a Northern California fire reality, " said Ken Pimlott, who retired last month as director of the California Department of Forestry and Fire Protection, or Cal Fire. "In a perfect world, we would like to see all [of PG&E's] equipment upgraded, all of the vegetation removed from their lines. But I don't know anybody overnight who is going to catch up." PG&E scrambled to reduce fire risks by shoring up power lines and trimming millions of trees. But the company's equipment kept setting fires -- about 1,550 between mid-2014 through 2017, or more than one a day, according to data it filed with the state.
The global business community is recognizing the risks it faces from climate change. This week, a World Economic Forum survey of global business and thought leaders found extreme weather and other climate-related issues as top risks both by likelihood and impact.
Other factors besides climate change may also have pushed PG&E towards bankruptcy, according to the article. They're required by California state regulations to provide electrical service to the thousands of people moving into the state's forested areas, yet "an unusual California state law, known as 'inverse condemnation,' made PG&E liable if its equipment started a fire, regardless of whether it was negligent."
In declaring bankruptcy, PG&E cited an estimated $30 billion in liabilities -- plus 750 lawsuits from wildfires potentially caused by its power lines.
neglect (Score:4, Insightful)
They neglected their infrastructure in a known fireprone area.. Now they are being fined/sued out of existance. Uh huh, yeah its climate change.
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RTFA ?
They're required by California state regulations to provide electrical service to the thousands of people moving into the state's forested areas, yet "an unusual California state law, known as 'inverse condemnation,' made PG&E liable if its equipment started a fire, regardless of whether it was negligent."
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made PG&E liable if its equipment started a fire, regardless of whether it was negligent."
In that case, would not the wise company use equipment that did not start fires?
It's time to consider to bury the power lines. Something they do here in Sweden more and more.
Even if their equipment caused it - the amount of combustible items around should have been trimmed. Maybe like the GoatFundMe [cbslocal.com] campaign?
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This. And while they're at it, move all the big gas distribution pipelines above the ground, so when they leak, somebody will notice the smell long before it can build up a giant pocket of flammable gas and explode.
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Abandon the gas lines and generate electricity from it instead.
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Every gas pipeline that has caused a fire in PGE country has been known to be in need of replacement. Every. Single. One.
What are CEOs for if not to be locked up when the corporation they helm (helm was not in my dictionary, wtf Google, nobody at the helm?) kills people through willful negligence. The PGE CEO takes home over $8M. Let's seize literally all of that, and give it to fire victims. And then let's put the CEO in prison for life, like any mass murderer.
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Re:How is that motivation out of line (Score:5, Informative)
It's time to consider to bury the power lines. Something they do here in Sweden more and more.
You don't seem to grasp the size of North America and why this isn't a cost effective solution. To put simply, the difference in size between California and Sweden is about 20k sqkm. In North America, you can restring an entire street(say 300m long) including poles, transformers and so on for around $30k-40k, if you trench it you're looking upwards of $500k-1.5m depending on whether or not you also have to deal with other utilities. Relaying lines like that sometimes happens when a street is having new water lines, sewage and so on put in at the same time. Higher priorities are placed for areas that have high disaster issues like freezing rain - central-east US, eastern US along the I75 corridor, and up into Canada and, Ontario through the 401 into Quebec and along the St. Lawrence Seaway. In California's case, you can bet your ass that there's been a long humming and hawwing over "is above ground electrical better in an earthquake zone" then below ground.
Sometimes it's not even worth the effort in high flood zones from hurricanes because companies have discovered no matter how *good* of a conduit is being used, how well water proofed it is, how resistant to salt it is. Somehow you get water or salt or end up with a vapor filled tube of salt water which when it fails, is nothing short of spectacular.
The big problem California has is the lack of proper forestry management. 40 years ago, burns were common. If you were buying a house and there was 1" of pine needles on the ground it would be automatically condemned until it was cleaned up. Now you have people who protest burns, protest cleaning up areas with highly flammable ground clutter. Give you a tip though, the entire eastern pine stands ranging from the northern US to Southern Western Canada are ripe to go up. They're effectively dead, tens of thousands of sqkm of dead trees from pine beetles and no burn policies.
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In that case, would not the wise company use equipment that did not start fires?
Most companies just trim back trees and be done with it; but here in CA our greenies love to protest and sue [goldenstat...papers.com] against trimming trees getting into power lines. So they have to run power into the forests - but are prevented from maintaining access clearances around those lines...
As far as our taxes go, those aren't for infrastructure, they're to fund feel-good initiatives that do nothing. New taxes will always be required to pay for the actual infrastructure changes that should have been paid for already (an
Thanks for the help (Score:5, Informative)
Thanks for the link! It says exactly what I was saying, PG&E is responsible for the fires... like this sentence from your link:
A PG&E transmission tower in a burned-out forest in Butte County. PG&Eâ(TM)s lack of properly insulated power conductors â" and the threat of trees or limbs falling on distribution lines â" played a role in causing some of the disastrous and lethal wildfires of 2017 and 2018,
I'll save that one to point out to others, thanks man!
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Re: neglect (Score:2, Informative)
Not first anyway (Score:3)
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Next time you might like to read to the end.
You must be new here.
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It is a bit unknown about the cause here, still. But they were negligent in the San Bruno gas explosion and they have had judgements against them for that. And they have a history of horrible public relations. Also accusation about the Santa Rosa fires last year. So they're facing a lot of lawsuits but without any evidence of culpability yet, but it's enough to cut into their finances. As for the maintenance of transmissions lines, they are doing this but they're possibly getting behind as there's more to
I think the point is that climate change means (Score:3)
The thing about climate change is it's changing how we live and work in lot of way. Mostly though it's just adding expense and making life more difficult. Plus the global economy's already pretty
Re: neglect (Score:2, Insightful)
No, you fucking dumbshit. My state has been run by ecological idiots who think they are green but actually create the forest fire mess.
The trees here -require- regular small fires to clear away the brush which builds up every year. When these complete fucking incompetent idiots stop every little fire the brush builds up for a few years providing fuel for a huge conflagration. It has been happening for many decades. Prior to self styled green morons fucking shit up we didnt have a huge forest fire every
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The quick stamping out of fires was a common practice in the past, and one done across many states and also by the feds in their federal lands. But everyone knows now, including forestry officials in California, that controlled burns are necessary to prevent more catastrophic fires. The snag is that after many decades of bad management, you can't just correct it all quickly. You're making it sound like California is still acting like the 1950's era with Smokey the Bear.
Re: neglect (Score:5, Insightful)
California was still doing controlled burns of high danger zones, and up through mountain passes in the 1980's. It was during the hyper environmentalism of the 90's and all the idiots getting elected with the environmental fear mongering that fewer and fewer burns were begun.
Hell it doesn't even have to be with controlled burns. Check out the environmental procedures that are required to start an avalanche in a closed zone, in a historically heavy avalanche area. I'm not talking about snow compaction levels, sunlight, wind, and air temperature. I'm talking about "too much noise" and 'destruction of habitat' that are used to block them. There was a good documentary done by I think NATGO back in '08ish or so on it and how in some cases it's gotten so bad that crews can't even get to the guns that were used, and instead use helicopters to trigger them and trying to create a safe path so they could get to the guns.
Re: neglect (Score:4, Insightful)
The trees here -require- regular small fires to clear away the brush which builds up every year.
Couldn't you just...you know, rake it? Like the Finns do.
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Re: neglect (Score:5, Funny)
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If you just wait for the diseased pines to fall over, you can rake them up.
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Oversimplification [Re: neglect] (Score:3)
It's not that simple. Being an environmentalist doesn't necessarily mean you are against using clearing fires. Often residents got angry when "controlled burns" or preventable fires got out
Not just neglect, pocketing money + coverup!!!! (Score:5, Insightful)
Exactly, PG&E has been proven mismanged for decades. San Bruno wasn't a one-off, they covered up their lies intentionally. This company is shit and needs to die.
https://www.mercurynews.com/2019/01/17/pge-uninsulated-power-conductors-were-factors-in-fatal-wildfires-federal-judge/
The premise that climate change was even a 50% factor is retarded. Climate change doesn't cause mismanagement of trees along power lines while the company pockets the money for their bottom line, as they provably did.
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PG&E has been proven mismanaged for decades. .
Just as Erin Brockovich
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You're mistating the California senate part here. State senators still come from districts, they're not voted on my state-wide popular vote. It is popular vote within a district, same as many other states. It is true that senate districts are not based upon county lines, but this is not that unusual.
Re: neglect (Score:5, Insightful)
Yeah... I don't get where that guy was coming from. 40% of water is diverted to wetlands restoration and over 80% of the remainder is used for farming...
Cities in California are already *really* strict with water, and you can't water your way out of fuel build-up (since water helps make more fuel). The Camp fire wasn't a climate change fire. It was a poorly maintained infrastructure fire.
Re: neglect (Score:5, Insightful)
Why do you see the issue as binary when it clearly isn't?
Climate change is clearly a factor, as is PG&E's mismanagement. Combined the two made the likelyhood of major fires a certainty. They should be held to account on both factors. A retroactive CO2 tax would be one nice way to do this, but I cant see it happening anytime soon, if at all.
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Climate change is clearly a factor, as is PG&E's mismanagement. Combined the two made the likelyhood of major fires a certainty.
Climate change is not making the trees grow faster. Climate change made the fires more severe, but it's not responsible for starting them. That's caused by PGE doing insufficient maintenance. There was no need to combine anything with PGE's mismanagement to have major fires except California's general mismanagement of forest land.
We simply don't do enough controlled burns, and have in fact permitted structures to be built in places which we need to be burning. The natives up here in northern California set
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Ha, Slashdot is just as bad with science as well. Knee-jerk responses without reading articles to declare someone's research was a waste and that there was a better analysis just waiting for the Slashdot experts to reveal. So many show up here on any topic to start blabbing out their opinions without ever once doing any research to get their facts sorted out; they go on a gut feeling alone based on a headline and pretend to be experts. Ie, blowhards who make the Slashdot editors look like geniuses.
Not Global Warming's fault that PG&E caused fi (Score:4, Insightful)
PG&E would not be liable for "Global Warming", the fact they are liable for damages is because they were the ones you irresponsibly cared for equipment and other things.
Nothing like using some mystical bogeyman to cast blame on and shift away from your own poor judgment and ability.
once a best practice, always a best practice (Score:2)
If climate were going the other way, we'd be reading about how Senegal was caught red handed with insufficient snow removal equipment.
Many people dead from icy sidewalks in July.
And you still wouldn't blame global cooling: those darn Senegalese can't get a damn thing right.
Re:Not Global Warming's fault that PG&E caused (Score:5, Insightful)
This. PG&E does bare minimum maintenance. Our power goes out about once a year for the better part of a day, entirely at random, along with an area that is a couple of miles on each side, containing several thousand homes. That's not in the mountains or in some hard-to-reach place. It's in the heart of the Silicon Valley.
PG&E is grossly incompetent. Even if you ignore their equipment malfunctions causing wildfires in 2017 AND 2018 and somehow blame that on global warming, there's also the San Bruno pipeline explosion that killed 8 people and destroyed 38 homes. There's certainly no global warming involved there. They simply don't maintain their equipment until something breaks. And this means things break. A lot.
Basically, PG&E is what happens when governments try to allow a regulated monopoly to provide critical utilities instead of a municipal electric company or a regional nonprofit. Every dollar that went to PG&E's sharedholders is a dollar that should have been used for routine maintenance and upgrades. If that money had been used that way, close to a hundred people would likely still be alive today, just from those two incidents alone. The problem is, the primary goal of any for-profit corporation, no matter how highly regulated, is and always will be profit, and their concern for public safety will always be limited to doing the bare minimum necessary to avoid getting sued out of existence.
This is their second bankruptcy this century. The first, though largely caused by the California energy crisis, was certainly not helped by a $2 million judgement against them in 1997 for failing to trim trees near power lines, resulting in a devastating wildfire in Nevada back in 1994. For them to have pretty much the same situation in 2017 is almost unconscionable. Yet judging from the frequent power outages in mountainous parts of the Bay Area, IMO, there's no reason to believe that they have learned their lesson and are maintaining trees adequately even to this day. The 2018 Camp Fire was just the additional straw thrown down on top of the camel posthumously.
Clearly, this company has failed. We should let it fail. Deny them Chapter 11. Cancel the stock. Make them file Chapter 7 and sell off the pieces. That's the only way things get better. Or at a bare minimum, order a complete replacement of all the company's leadership as part of the bankruptcy proceedings. If we keep letting the same people make the same bad decisions, how can we possibly expect different results?
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Basically, PG&E is what happens when governments try to allow a regulated monopoly to provide critical utilities instead of a municipal electric company or a regional nonprofit. Every dollar that went to PG&E's sharedholders is a dollar that should have been used for routine maintenance and upgrades. If that money had been used that way, close to a hundred people would likely still be alive today, just from those two incidents alone. The problem is, the primary goal of any for-profit corporation, no matter how highly regulated, is and always will be profit, and their concern for public safety will always be limited to doing the bare minimum necessary to avoid getting sued out of existence.
If there's no profit in providing electrical services then why would anyone bother to invest in it? Think about that.
I think you let your government schooling interfere with your education. There's nothing inherently wrong with people making money on this. Don't blame this on malice when incompetence would suffice. I'm guessing that the people running this utility live in an area that could go up in smoke if something went wrong. I feel confident in this assumption because as big as California might be
Re: Not Global Warming's fault that PG&E cause (Score:2)
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The corporation certainly wouldn't have diverted safety funds into bonuses and stock dividends [sfgate.com], because there would be no stockholders.
I mean yes, ostensibly a nonprofit could still divert safety funds into bonuses, but it would likely cost them their nonprofit status.
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The PUC of California sets a maximum rate and profit level for PG&E and other utilities, and they do this each year. This was what caused the first bankruptcy awhile back when electricity prices were spiking but PG&E couldn't raise rates. This ceiling forces the utilities to find ways to conserve and run more efficiently.
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There may be social value in having people in rural areas that are getting electricity, even if there is no private profit in it. In the case of many farms, this is true. Some people would say "just cover the farms", but who the hell is going to live on a farm with no neighbors? And you'd have to be a complete moron to argue that we don't need farms.
Money is actually quite poor at reflecting the value of necessities, but is excellent for luxuries. When you have a society where only 2% of
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Payroll is an expense, not a profit.
For the people working there payroll is their profit. If you want good people working there then you need to pay them and pay them well. No matter what you say about non-profit organizations there will be people making money.
Remember that the NFL used to be a non-profit until enough people complained about millionaires sheltering their own personal profits under this part of tax law. There is still a lot of money made in non-profit corporations, saying otherwise is provably false.
Re:Not Global Warming's fault that PG&E caused (Score:4, Interesting)
PG&E is exactly what an economist would tell you will happen when government sets a price ceiling and supply isn't allowed to be reduced to compensate. Instead of quantity supplied being reduced (because that's illegal), quality is reduced as much as possible (Same exact economic issue with rent control price ceilings creating slumlords). The whole thing is the State of California's fault, a predictable result of their laws and regulatory mismanagement.
But sure, blame the power company which isn't allowed to make any significant decisions (who to sell power to, for how much and how top roduce and sell it) that California effectively runs via regulation.
San Diego Gas and Electric has the exact same issue as PG&E, just to a lesser extent because they're smaller.
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This what you get with half-arses socialist policies. What they need to do is nationalize electricity production. Make it non-profit and priced according to what is required to properly maintain it.
That's un-American though so instead you get this kind of cap, with the power company trying to squeeze profits out of it.
Re:Not Global Warming's fault that PG&E caused (Score:5, Informative)
PG&E is exactly what an economist would tell you will happen when government sets a price ceiling and supply isn't allowed to be reduced to compensate.
That, sir, is a load of hot cockery.
So just to be clear, even after paying millions of dollars to executives who weren't doing their jobs, PGE was able to turn a profit of $1.65 billion up 18% from the prior year even though their revenues had fallen! How do you think they managed that? As long as they are failing to maintain infrastructure as they are legally obligated to do, every single dollar of that profit represents an effective theft from The People, let alone their customers.
In exchange for their various right-of-way monopolies, maintenance vehicle access and the like, they are obligated to maintain the infrastructure in safe condition, and do business in a fair manner. They are doing neither. PGE is a criminal conspiracy to defraud the people who reside or even simply have financial interests in the area which they "serve". And beyond that: it has killed in the past, it has killed recently, and it will kill again. And those responsible will almost certainly not only face no punishment, but get to retain the majority of their ill-gotten gains.
You live in interesting times (Score:2)
There won't be any investors willing to put a dime into California power companies now. The state will have to take over the grid whether they want to or not.
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But every other month there is a story in the local newspapers about PG&E being protested or sued by some green group for "excessive" trimming of trees or doing maintenance work on property some activist purchased to keep PG&E from 'disturbing wildlife'.
California wants its cake and eat it too. It wants carbon credits but not pay for it through excessive energy cost, it wants heavy regulation of utilities but do this at minimal cost and with zero impact. California is one of the most expensive state
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They do have nuclear reactors on the beach [wikipedia.org], though. Give it time.
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Not really a beach though, it's pretty rocky there with steep drop offs. The tsunami inundation zone map for the area is very minor, not even going up to the plant. It's nothing like the Fukushima area. The bigger danger there is potentially from earthquakes.
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Yeah, irresponsible corporation that are regulated out of existence and can't even trim trees for safety without lawsuits and complaints (https://www.sacbee.com/latest-news/article219315140.html ; https://stopsmartmeters.org/20... [stopsmartmeters.org] ; https://www.actionnewsnow.com/... [actionnewsnow.com])
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Can't make a profit, can't drop unprofitable components of business, can't raise prices to meet costs...
Is California government still price fixing even after their price fixing caused Enron?
Zero federal dollars better go to saving California from itself...
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By keeping the consumer price of electricity artificially low, the California government discouraged citizens from practicing conservation. In February 2001, California governor Gray Davis stated, "Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes.
Energy price regulation incentivized suppliers to ration their electricity supply rather than expand production. The resulting scarcity created opportunities for market manipulation by energy speculators.
S
Maybe, but it's not PG&E's first bankruptcy (Score:2)
Not Climate Change (Score:2)
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You mean raking the forest floor?
Expect Prices to Rise (Score:2)
They're required by California state regulations to provide electrical service to the thousands of people moving into the state's forested areas, yet "an unusual California state law, known as 'inverse condemnation,' made PG&E liable if its equipment started a fire, regardless of whether it was negligent."
Either that legal situation is going to change, or power bills are going to go up steeply (at least for people if forested areas, if it's legal to discriminate). Or no power company is going to buy up the company's infrastructure and there'll be no electricity for their customers.
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Yeah. The real problem is that they are simply responsible for so darn much negligence. Their main problem isn't getting charged for damage not caused by negligence, but rather that they are constantly, consistently negligent, and they end up paying for damage that they could have easily avoided if they had put safety over profits instead of the other way around.
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No, you're just paraphrasing now. That is in effect what the gp said. They paid that money out in executive compensation. It's like how we paid the telcos billions to build out the last mile, and they gave it away in bonuses to the execs, except that didn't kill anyone. Pge execs should be done for multiple manslaughter.
PG&E is the victim here. (Score:4, Insightful)
Of California's fucked-in-the-head regulatory environment.
This has NOTHING to do with climate change.
They're basically required to service areas that will never be profitable, below their costs of delivery, can't spin off unprofitable business segments, they're not allowed to charge more to cover their costs, etc.
Meanwhile, state and federal regulations basically conspire against them. Changes in land management dramatically increase the chances of fire in any given area. And they're made liable for any fires in the area of their equipment, whether it was actually their equipment or not...meanwhile industry regulation basically prevents them from charging true cost of the power they deliver and actually making it MORE profitable to sell the power out of state and then re-import it...
Meanwhile, California's idiot density is going up year over year as people with an actual functional brain flee the state. They've had wildfires in California for HOW LONG? Yet, every year we've got idiots starting fires and moving into areas that abut to the aforementioned badly managed forested land and building WOOD HOUSES, while ignoring sensible rules for building in fire-prone areas. Then, after they've burned down for the umpteenth time, they go back and rebuild in exactly the same fashion!
It's just the intellectually retarded leading the intellectually retarded out there.
It's like going into a boxing match and finding out the other guy is bringing a knife, guns, artillery, grenades and a group of friends to kick your ass.
...and no (Score:4, Informative)
I know it's fashionable for conservatives to pick at the Leftist policies of the United States' most prosperous state but you're just making things up here. PG&E was doing great prior to the two big waves of fires that came through California https://www.macrotrends.net/st... [macrotrends.net] and they would have zero liabilities in the case of these fires if they had maintained things the way they knew they were obligated to.
"Meanwhile, state and federal regulations basically conspire against them."
So we're convoluting state and federal policy now as a means of damning California? Most of our big open territory in this state is Federal.
"And they're made liable for any fires in the area of their equipment, whether it was actually their equipment or not..."
Citation needed.
"Meanwhile, California's idiot density is going up year over year as people with an actual functional brain flee the state."
Right, Californian's are idiots. What state are you from? Wait, it doesn't matter because it's not as prosperous as California.
"It's just the intellectually retarded leading the intellectually retarded out there."
Shit, I'll take our imperfect system over a Red state's any day of the week. At least we're able to generate meaningful wealth without the maximum exploitation of all of our public land as Texas does. We could certainly learn a thing or two from other blue states but I'm guessing that's not where you're at.
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PG&E was a customer of ours, so of course we were talking about them at work. Everyone seemed to agree that even a couple of years ago it would have seemed absurd to think that PG&E was not a good reliable investment, much less that it would file for bankruptcy with a possibility of going out of business. With an existing utility it's almost like printing money as long as you manage it well. There's a cap on rates from the PUC but there's always enough leeway there to provide for a reasonable profi
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much less that it would file for bankruptcy with a possibility of going out of business
Yeah it's absurd to think this would happen twice right? https://www.sfgate.com/news/ar... [sfgate.com]
One factor in the bankruptcy is that the PUC and the courts have said that they can't pass along costs of lawsuits to their customers by raising rates.
Passing management mistakes on to customers doesn't solve this problem. Ideally bankruptcy should mean that the idiots who got the company into the mess (maintenance? what's maintenance? the process of keeping something in good condition? Why would we do that?) should be expelled without the customers of a regulated monopoly being impacted.
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"...the United States' most prosperous state..."
If so, that's pretty fucking sad?
http://www.usdebtclock.org/sta... [usdebtclock.org]
https://www.forbes.com/sites/t... [forbes.com] says:
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Point One: Still trying to blame PG&E for the government trying to offload it's forestry and land management obligations off onto a private coporation.
Point Two: No, municipal, state and federal government have painted PG&E into an insurmountable corner.
Point Three: https://cutterlaw.com/californ... [cutterlaw.com]
The Nun's canyon fire was started when a tree fell on a power pole, not vice versa, and the transformer on the pole blew.
Point Four and Five: Not all Californians are idiots. But they're the ultra-rare e
Re:PG&E is the victim here. (Score:5, Informative)
Of California's fucked-in-the-head regulatory environment. This has NOTHING to do with climate change.
They're basically required to service areas that will never be profitable, below their costs of delivery, can't spin off unprofitable business segments, they're not allowed to charge more to cover their costs, etc.
Uh, no. Most states have regulations requiring universal access to power, and most states have cheaper power than California, yet only a few states seem to burn down twice a year because of poorly maintained equipment. PG&E turned a $1.65 Billion profit in 2017. How did they do it? By making public safety an externality and hoping for the best. Don't blame this on government regulation. The real flaw was letting any for-profit corporation provide power service in the first place. Government regulation just failed to completely mitigate the damage caused by using entirely the wrong business structure.
They reaped what they sowed. Period.
Meanwhile, state and federal regulations basically conspire against them. Changes in land management dramatically increase the chances of fire in any given area. And they're made liable for any fires in the area of their equipment, whether it was actually their equipment or not...
But in practice, it is approximately always their fault, thanks to grossly inadequate maintenance of trees near power lines and grossly inadequate equipment maintenance, which makes that whole argument completely moot.
Meanwhile, California's idiot density is going up year over year as people with an actual functional brain flee the state. They've had wildfires in California for HOW LONG? Yet, every year we've got idiots starting fires and moving into areas that abut to the aforementioned badly managed forested land and building WOOD HOUSES, while ignoring sensible rules for building in fire-prone areas.
It's worth noting that California has made a bunch of big changes to their building code over the past couple of decades, like requiring fire sprinklers in the attics of all new residential construction, bans on untreated shake roofs, etc., and as a result, in most of the burned areas, newer construction was often left untouched while older structures nearby burned to the ground. The problem is not people moving in. The problem is that a huge number of older buildings built before the newer, tougher building codes kicked in have not been brought up to code, and there are neither laws requiring that to happen nor funds available to help with the cost of doing so.
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The real flaw was letting any for-profit corporation provide power service in the first place.
Actually, the real flaw was letting them be in charge of infrastructure, which is the part that caused the fires. Make counties responsible for clearing trees around wires, and let the state operate and maintain the grid equipment itself. Let for-profit corporations generate power and put it on the grid, but subject them to a carbon tax that puts some muscle into the invisible hand (as well as the other usual environmental controls.) If PGE goes bankrupt, this is precisely the remedy we should use. Break PG
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True, but PG&E is almost exclusively an infrastructure company to begin with. They only own a token amount of generating capacity proportional to what they provide. As of 2014, almost 70% of their power was provided by somebody other than PG&E, and I'd imagine that number will be even higher when their one nuclear plant (Diablo Canyon) shuts down in a few years.
They have almost as big a
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That might be because in the Midwest, where I live, we don't have an irrational fear of far cheaper and far more reliable nuclear power. A state that wants to be "carbon free" and also deny itself access to cheap, reliable, and "carbon free" nuclear power will inevitably have far higher energy costs.
I found out recently that the nuclear power plant near me is threatening to close down and not build a new nuclear power plant to replace it. I expect this will raise rates and increase the potential for outag
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No, you made that part up. I certainly did not say it.
That's not even remotely true. Some real facts:
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Question: Why is it THE POWER COMPANY'S job to do LAND MANAGEMENT in areas not directly on their easement?
The Nun's Canyon fire was started by a blown transformer, set off by a nearby tree falling into the easement and hitting the pole it was on.
Off the top of my head I can give you at least half a dozen ways PG&E could have prevented that fire.
Incompetence, not unreasonable requirements (Score:2)
They're basically required to service areas that will never be profitable
Just take a look at this helpful link someone provided me, PG&E with uninsulated conductors in the middle of a forest! [mercurynews.com]
Even if they are required to service areas they cannot make a profit on (which I question if it's actually all that true, but leave that to the side). Even if, there is no excuse for shoddy line work like this.
Electric companies in PLENTY of other states manage to run power lines to lots poorer areas than Californi
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Insulation shouldn't even be needed. These systems should detect the loss of connection to the other end and cut power in milliseconds, long before the other end of the wire can even hit anything on the ground. I remember reading articles about that at least 30 years ago.
Well, that is why you don't privatize (Score:2)
No, PG&E didn't do their job (Score:2)
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Why does it need to be for profit? (Score:2)
Why can't it be a public service?
Why do private companies need to make huge profits? They are using public resources to do it. Public lands. Our rivers and our lakes.
Why does someone need to profit?
You can see the outcome. When a company is only profit driven, they will do everything they can to lower costs. That means, layoffs, lack of maintenance, substandard components and all the rest of it.
In the end, we, as the consumer still pay out the ass for the power they generate, much of which is subsidized by
Not Global Warming, It's Piss Poor Management (Score:5, Insightful)
They think that they can blame this on global warming? I call bullshit. Global warming and it's effects on humanity has been something people in the USA have been beaten over the head with for at least 30 years now. They knew that global warming would mean greater demand for electricity for air conditioning, that this meant greater threats of storms and wild fires, this is not news. What have they been doing for the last 30 years to stop this from happening?
I will say that PG&E might not have all the blame here, they are in a business that is highly regulated by government. The government of California is likely the most to blame here, and some of this might land on the shoulders of the federal government too.
Even before global warming was in the common vocabulary we had threats of acid rain and other environmental disaster. What did California do about this? They declared the state a "nuclear free zone" meaning that they denied themselves access to the safest and cleanest source of energy available. This was true then and now. Nuclear power is far cheaper and far more reliable than wind or solar power. If they were paying attention to the science on global warming then they should also have been paying attention to the best science could tell them on how to combat it.
This is why I believe that so many politicians are anti-science, they've legislated themselves into a global warming corner. If you want to convince me that the "science is settled" on global warming then why are you ignoring the science on the safest and lowest CO2 energy source we have? Which is the greater threat to California, America, and the world? Is it global warming or nuclear power? If you say global warming then you are fools for shutting down the nuclear power plants you had and not building more. If you say global warming then you are fools for not planning on the effects and costs they will entail decades ago.
Nope, you can't blame this on global warming you fools. This is just bad management from the top to the bottom. I hope you enjoy freezing in the dark.
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Ease your rage here. The problem here isn't government, it's a shit hole slashdot headline. PG&E was pulling down great profits prior to these fires when all of a sudden it was found to have been negligent in maintaining their equipment after the fires broke out. The only thing "global warming" has to do with this is that the likelihood of fires like these are increased as global warming worsens. Global warming, however, does not change the conditions that PG&E, through its neglect of requirements i
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The only thing "global warming" has to do with this is that the likelihood of fires like these are increased as global warming worsens.
Then PG&E needs nuclear power to lower their carbon output. Nuclear power has the lowest CO2 produced per kWh produced as well as the lowest rate of deaths per kWh.
If global warming caused these fires then PG&E is contributing to the problem by not using the lowest CO2 energy source we have available. This is their own fault, they deserve to go under. Let someone that understands the science of CO2 production replace them. Maybe then we can actually solve this problem than use the non-solution t
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Rock and a hard place (Score:4, Insightful)
Standard issue with electrical reticulation is that the general public are so uninformed as to be living in a land of comic book physics.
The industry is full of really responsible people invested in their business going well and delivering a service. The OP beautifully points out how a couple of inflexible limits: a requirement to provide power into dangerous places - uneconomically, liability through perverse legislation and the impact of climate change has come around to ... severely bite the legislators in the ass, and the voting public and consumers.
While it may be fun to win over in some legal match its a zero sum game and hugely wasteful.
For those wondering... (Score:4, Informative)
The Pacific Gas and Electric Company is an American investor-owned utility with publicly traded stock that is headquartered in the Pacific Gas & Electric Building in San Francisco.
Cost cutting bit them in the ass (Score:2)
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The UK is the size of a postage stamp compared to the USA. Literally the only part of the UK with population density as low as the US is the Pitcairn islands. California is a large state (e.g. England is 57% as large as California alone) and the regions that have just burned are hilly to mountainous. In fact, the round of fires before this last one occured mostly within the Mendocino national Forest. And all of them have been in severe earthquake country, which is pretty much all of California except the Kl
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Yes, and we pay for it. The Californians have a cap on how much they can charge for electricity, which puts a cap on how much can be spent on resources for implementing new connections, maintaining old equipment, staff hires etc.
You'd be amazed at how quickly a profit (that adds to war chest to be able to put a capital spend into upgrading legacy equipment) turns into a loss when you start putting top of the range things into cost fixed product, when by regulation, the standard is sufficient. And even whe
Normal vs Abnormal Climate Change (Score:2)
California regularly has had natural drought, unrelated to humans, including the mega-droughts (two decades or longer) 850-1090 and 1140-1320, the latter believed to cause the end of the Pueblos in the south west. (These may have been related to the "Medieval Warm Period" (roughly 950-1250) in Europe and larger global changes.) Any competent climate-historian can tell you that the last
It was Sacramento and the Greens that caused it (Score:2)
First off, the drought was a result of natural variation [ametsoc.org]. And anyone that checks reservoir levels today will find were at about the historical average, overall [ca.gov]. If we had a drought - it's gone.
The real cause of the fires was the handwringing [kqed.org] and NIMBY [sacbee.com] Gaia worshipers [goldenstat...papers.com] throwing up legal roadblocks to PG&E cutting back trees near power lines.
This was a manufactured (in that environmentalists fought against accepted standards for power line clearance) disaster that is being blamed on a non-event (in that
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They dumped toxic waste in the groundwater and then sent residents flyers touting the health benefits of having toxic waste in your groundwater.
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Why do they have to ask for a rate hike? They HAVE to make a profit, so they HAVE to raise their rates to meet that demand. They HAVE to maintain their lines so they HAVE to raise their rates to meet that demand as well. The question is, why would a company have to ASK their customers whether or not they can set a price. If you don't like it, switch suppliers.
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TL;DR: they gambled; they lost. Somebody ought to be put in a debtor's prison (or its analog).
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FTFY. What is missing is accountability. In this case, IMO, the right way to hold them accountable is to throw about half the management chain in jail for the next three decades, fire the rest, liquidate the assets, and dissolve the company.
PG&E should have been dissolved after Anderson back in 1993 (a.k.a. the Erin Brockovich lawsuit). It should have been dissolv
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The state is already running PG&E. Fixing prices on energy, denying the building of profitable power plants, extreme regulation of labor, supply and demand. Now they're bankrupt while across the country energy companies are some of the most profitable businesses.
Welcome to socialism. Now let the government take it over and raise prices to $0.50/kWh to pay for 'global warming', 'carbon credits' and massive government waste.