Days after the California Senate approved a bill that would fine investor-owned utilities for power shutoffs, the measure’s author is proposing legislation that would outline a plan to take over the bankrupt Pacific Gas & Electric Co.
Sen. Scott Wiener, D-San Francisco, announced Monday that he will introduce legislation this week to revoke the utility’s authority to serve its territory and direct the state to take control.
“PG&E is a failed utility with a track record of prioritizing profits over safety,” Wiener said in a statement. “It’s time for a new start: A utility focused not on Wall Street and shareholder profits, but rather on safety, reliability, affordability, and ratepayers.”
The bill would establish a state power authority that would purchase all of PG&E’s assets and lead a five-year transition from investor to public ownership in consultation with the California Public Utilities Commission. The cost of acquiring the company’s assets would be passed on to ratepayers over several decades.
California Gov. Gavin Newsom had threatened a potential takeover two weeks ago in a
The utility has to exit bankruptcy by June 30 in order to tap the fund and Newsom wrote in the filing that the utility is dependent on access to the fund to successfully exit bankruptcy.
PG&E filed a
The seed money for the $21 billion bond fund comes from up to $10.5 billion in Department of Water Resources bonds to be matched with $10.5 billion from the utilities. It would act as a line of credit for utilities to cover wildfire damages and limit the financial obligations of ratepayers.
Wiener had suggested that he would introduce legislation to take over PG&E when SB 378, his legislation to hold PG&E and other utilities responsible for "the damage of the mass power blackouts it levied on the state" was approved in the Senate Jan. 27.
Moody’s Investors Service deemed Wiener's power shut-off bill a credit negative for the state's investor-owned utilities in a Friday report. In addition to levying fines on the companies, it would also allow customers to seek recovery for shut-off related costs.
SB 378 would hold PG&E and other utilities responsible for the damage of the mass power blackouts it levied on the state last fall, in part by requiring PG&E to compensate those impacted by the blackouts, Wiener said.
It’s credit negative for the state’s investor-owned utilities PG&E, Southern California Edison Co. and San Diego Gas & Electric Co. because “it would impose additional costs and may deter them from using power shutoffs altogether,” Moody’s analysts wrote. “That, in turn, could increase the risk of wildfire-related damage during extreme weather events.”
PG&E faces an estimated $50 billion in liabilities after investigators found that its equipment sparked some of the state’s most devastating northern California fires over the past several years. It filed Chapter 11 bankruptcy a year ago.
