California Democrats can speed up improvements to PG&E’s antiquated system. Here’s how

PG&E’s mismanagement is the primary culprit in multiple wildfires that have claimed lives and destroyed homes and businesses in Northern California.

Now, PG&E is shutting off power because, its executives maintain, its infrastructure is not safe in dry and windy conditions. But there has been little focus on the government’s mismanagement. That, too, has been a significant contributor to our current woes. That needs to change.

The original investor-owned utility concept was one that utilized the power of investors to help build and maintain large-scale infrastructure to meet a clear purpose: providing safe and reliable power to all. 

The ratepayer was to be the ultimate master.  But this concept has been distorted by government policy. The result is investor-owned utilities such as PG&E have many more masters to serve at the expense of safety and ratepayer interests.

First, the failure of the California Public Utilities Commission to provide oversight has allowed PG&E to primarily serve its Wall Street masters. PG&E has been allowed to skimp on infrastructure while paying its shareholders dividends and executives bonuses.

Second, government regulations have made it extremely cumbersome to conduct tree trimming around transmission lines. And state and federal policies restricting logging, grazing and forestry management have created a giant tinderbox of overcrowded forests and brush. A spark, whether it comes from a transmission line in the case of the Camp Fire or a tire blowout in the case of the Carr Fire, falls on a massive amount of kindling.

And finally government has drastically altered the source and distribution of power. As a state, we seem to care far more about where the energy comes from than whether it is affordable to ratepayers.  

Under California’s renewable portfolio standard mandate, California required that utilities obtain 33%, then 50%, and now 100% of their electricity from carbon free sources. That requires that billions of ratepayer dollars are spent purchasing “renewable” power. We all pay for that.

I agree with the need to reduce our carbon footprint. But renewable power is strictly defined to encompass primarily wind and solar energy. If the goal was to ensure that power was sourced to reduce carbon emissions, PG&E could have easily met the standard with its significant investments in renewable hydro power.

But in 2016 and again in 2018, Democratic legislators and then Gov. Jerry Brown specifically excluded hydro power from being included in the renewable portfolio standard mandate. 

Currently, PG&E spends roughly $2.4 billion annually to uphold the legislative mandate to buy renewable power. In 2017, the year before the Camp Fire ravaged parts of the district I serve, PG&E spent only $1.5 billion to update its century old infrastructure.

The California Public Utilities Commission has reported that PG&E is purchasing renewable power at a premium. In other words, the cost of the energy is higher than its value. 

Bankruptcy is usually a place to get out of bad contracts. But in the PG&E bankruptcy, California is trying to ensure that these renewable energy contracts are kept whole. If California leaders have their way, renewable power barons may get every cent they are owed, while victims lose out.

Meanwhile, that old infrastructure threatens to spark more fires—fires that in  2018 emitted 45 million metric tons of carbon.

The result: California customers pay the highest rates in the nation for power that is no longer safe or reliable; and we are losing the climate battle. 

This is why Sen. Jim Nielsen, Red Bluff Republican, and I have proposed pausing— not rescinding—the renewable portfolio standard mandate so we can shift existing ratepayer dollars into upgrading infrastructure.  

We also propose doubling the amount of Greenhouse Gas Reduction Funds going into forestry management practices that do the dual duty of reducing carbon emissions and preventing fires.  This is a common sense policy that would get at the root causes of our current crisis.  

We have to hold PG&E accountable. But we also need to have the flexibility to change our government policies that have helped create this environment, so that ratepayers can once again become the master.  

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Assemblyman James Gallagher is a Republican from Yuba City who represents Assembly District 3 in Northern California, james.gallagher@asm.ca.gov. He wrote this commentary for CalMatters.