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San Jose Mayor Sam Liccardo is rallying public support for the idea of a customer-owned PG&E, following this year’s devastating wildfires attributed to the utility’s equipment and public safety power shutoffs that have caused hardship for customers.

Liccardo briefed reporters at a news conference Thursday on his plan to possibly buy out PG&E and transfer the company’s ownership from its investors to its customers.

Liccardo said:

“My residents want power that’s delivered safely and reliably and that doesn’t cause fires and doesn’t get shut down without warning.” 

Nik Wojcik/SFBay Shells of cars remain on one property while the home feet away remains in tact in the Napa Valley, Calif. following the October 2017 Tubbs Fire.

Liccardo continued:

“Rates are going to increase no matter who owns this company.”  

“I believe my residents want to know that if they’re going to pay more, they’re going to get safer and more reliable power and that those dollars are not simply going to the pockets of owners of hedge fund companies in New York.”

PG&E, whose largest stockholders are all based outside of California on the East Coast, filed for bankruptcy at the end of January this year.

Liccardo said:

“We know that there are competitors right now in bankruptcy courts seeking to present plans to a bankruptcy judge to take PG&E out of bankruptcy.”  

Liccardo continued:

“Our concern, and the concern of many others, is that those hedge funds will look to extract short-term gain for their investors, and ultimately PG&E will be left limping along, and perhaps going back into bankruptcy.”

Liccardo’s office also released a list of over 100 city council members and county supervisors from 58 cities and 10 counties in California who back a customer-owned PG&E transfer.

Spearheaded by Liccardo, legislators from the Bay Area, Central Coast and Central Valley all signed onto a list of seven “operating principles” they say should guide the state in transferring PG&E ownership to customers, including “geographic inclusion and equity, governing board responsibilities and selection process, labor and workforce, power supply procurement, public accountability, rate impact and credit quality, and safety and response.”

Liccardo said:

“What we need to do is fully align everybody’s financial interest that every dollar coming from ratepayers is invested in improving the reliability and safety of the grid.”  

“And we don’t have that today.”

Nik Wojcik/SFBay Escape route marked on a vineyard sign in the Napa Valley, Calif. during the October 2017 Tubbs Fire.

The San Jose mayor added that over the last decade, PG&E has given billions in dividends to its shareholders while its California customers have been left beholden to disasters, power outtages and footing the bill for the many mistakes of the utility that caused customers problems that at times were life-threatening.

With a switch in ownership, Liccardo said communication with the public would improve and customers would have greater say in how the company operates, which means:

“(I)f the power is going to go out, (customers) darn well better believe that everybody has ample warning and ample precautions are taken.”

The power shutoffs that began this year as a fire prevention measure won’t end anytime soon, Liccardo warned.

PG&E PG&E is planning to shut off power to approximately 800,000 customers beginning Wednesday, October 9, 2019 in Northern and Central California due to fire danger associated with gusty winds and dry weather. The Planned Safety Power Shutoff could last for up to five days. This outage map was provided before the PG&E website went down Tuesday due to excessive traffic. Additional areas have been added to the scheduled shutoff since.

Liccardo said:

“At the root of all of this is the need for tens of billions of dollars in investment in this grid. It has suffered from years of lack of maintenance (and) under-investment in capital replacement.”  

The mayor continued:

“The power safety shutoffs are not going to stop until this company has hardened the grid and ensured that we can operate reliably and safely without causing fires. The bottom line is we need an organization (and) company that is capable of getting us there much more quickly than the 10-years projected by this investor-owned utility.”

U.S. Rep. Ro Khanna, D-Fremont, in October asked for “bold action,” asserting the need for statewide ownership of PG&E, and calling for state and federal investment in “smart micro grids with distributed power generation” in California.

San Jose-based state Assemblyman Ash Kalra, said in an interview Thursday that he supports both Liccardo’s and Khanna’s efforts to change ownership of PG&E. He stressed the need for accountability of the utility company “without putting any more of the liability on the ratepayers, because I’ve think we’ve done too much of that already.”

Kalra said:

“I’d support putting all options on the table, including a cooperative model to see what the next steps are, because it’s easy to complain about PG&E, but at the end of the day, what’s the solution?”  

“We’ve given them a monopoly. If they want a monopoly, there’s responsibilities with that.”

He added that:

“(U)nfortunately (PG&E has) abdicated the responsibility in recent decades by using excess revenues for billions of dollars in profit, rather than putting that money in upgrading the infrastructure, and that’s part of why we find ourselves where we are.”

Liccardo on Thursday said that while he hopes for a customer-owned PG&E, there are still obstacles in the way of such a plan — namely, out-of-state hedge funds.

Liccardo said:

“(PG&E’s shareholders) have very strong financial interests to ensure that we do not prevail.”  

“These are large, powerful financial institutions. These are hedge fund companies in New York and we expect that they’re going to play hard.”

PG&E
via Wikimedia Attorneys painted starkly different pictures of PG&E and their oversight over natural gas infrastructure during closing arguments of a federal criminal trial on charges of violating a pipeline safety law.

PG&E in a statement Thursday pushed back against a customer-owned switch, saying:

“(The company remains) firmly convinced that a government or customer takeover is not the optimal solution that will address the challenges and serve the long-run interests of all customers in the communities we serve.”

The statement reads:

“We remain focused on fairly resolving wildfire claims and exiting the Chapter 11 process as quickly as possible.”  

“PG&E is committed to working with all stakeholders to make the necessary changes moving forward to build a stronger and safer PG&E and be the company our customers and communities want and deserve.”

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