Calls for California Gov. Newsom to publicly take over Pacific Gas & Electric Co. (PG&E), the large public utility blamed for one of the state's most destructive fires and massive blackouts, are understandable in today's political climate. Yet it begs the question over how effective government has been so far in maintaining our roads and dams and if a public takeover of our energy system will make things worse.
With some of the state's highest utility rates in the nation charged by the company it's difficult to defend the organization, even when one considers that public policy is largely to blame for at least some of the utility's decisions that can be linked to the fires and blackouts.
The bankruptcy case is illustrating how PG&E was constrained by contracts to buy renewable energy at rates "well above current market prices," according to the Wall Street Journal. The Federal Energy Regulatory Commission is arguing against the desire by PG&E to at least renegotiate those contracts.
Let's look at this for a moment. If the utility is paying over-the-top prices for power that it is mandated to buy – power that could be purchased elsewhere much cheaper – who wins? Surely not the ratepayers or the utility. If the utility then is focused on spending money for over-priced power, how much capital remains to conduct the kinds of maintenance they've been accused of ignoring? Could the utility have been more proactive with tree trimming and infrastructure upgrades had the overpriced contracts not been forced on them by regulators?
Food and Water Watch is reporting that 50 organizations recently signed a letter asking Newsom to take over the public utility. The letter cites neglected maintenance leading to wildfires and blackouts. It goes on to laughably claim the move will "increase accountability and transparency." One needs to look no further than the charade called "impeachment hearings" to see that accountability and transparency are anathema to public policy and government action.
Perhaps we can ask questions about renewable energy and question why wind and solar are on this list, but hydro isn't.
What happens if this call to publicly take over the utility is successful, and Newsom follows the wishes of groups like the Democratic Socialists of America, the Green Party, and other leftist groups? Who sets these power rates and does the money paid for power simply flow into the state's general fund with no accountability of how it's spent thereafter?
What message does this send to other utilities and will there be an incentive to keep utility rates from skyrocketing, or will they continue their ascent to infinity and beyond? Will this force even more people to flee the state for less expensive locations?