March 1, 2024 Breaking News, Latest News, and Videos

PG&E Gas Rate Request: New Standard For Chutzpah:

At the very moment that California’s largest utility company was being assessed a $14 million fine for failing to report discovery of flawed records on its gas pipelines in the San Francisco Peninsula town of San Carlos, the same company was asking for well over $1 billion in rate increases to pay for repairs to that very same pipeline system.

That alone would demonstrate remarkable chutzpah, the Yiddish word for sheer audacity and gall in overstepping the bounds of accepted behavior. But at the same time late last year, the company, Pacific Gas & Electric Co., was also asking the state Public Utilities Commission for a 12 percent increase in its ordinary rates.

If PG&E gets away with much of what it now seeks, you can bet on similar breaks for the other big California gas utilities, Southern California Gas Co. and San Diego Gas & Electric, both owned by Sempra Energy, which has annual revenues of more than $10 billion.

It’s certainly not the first time PG&E, the San Francisco-based outfit whose pipeline exploded in 2010, killing eight persons and destroying 38 homes in San Bruno, has shown chutzpah, sometimes interpreted as insolence. “Negligent” was the word employed by the National Transportation Safety Board to describe PG&E’s conduct (along with a finding of lax enforcement by the PUC).

This, after all, is the same company that got away with using obscure rules to declare bankruptcy while sitting on plenty of resources during the energy crunch of 2000-2001, a move that allowed it to restructure itself for greater future profit.

But bankruptcy did not have a direct adverse effect on the consumers – residential and commercial – who finance PG&E. The requested new rates would.

For much of the repair and maintenance work PG&E (like the other gas companies) wants customers to pay for now should have been done years ago with billions of dollars in maintenance money consumers have paid via their monthly bills since the 1950s. It’s still unclear just what PG&E and the others did with the cash earmarked for maintenance, but plainly, not all was spent on that.

All of which means PG&E has not deviated from its long-stated goal of having its customers put up new funds for it to bring its system up to the level of safety it should have had all along.

The $14 million fine utility commissioners assessed against PG&E for its San Carlos misbehavior may signal some change in the attitude of the PUC, which has long given its obligation to keep the utilities financially sound a higher priority than its other big mission, keeping prices in line for customers.

“This penalty is to serve as a deterrent against similar future behavior,” said Commissioner Mark Ferron.

But only time and the PUC’s final decisions on both PG&E rate increase requests will determine whether the commission’s kabuki dance of the last six decades will continue. This dance has long seen utility companies make large rate increase requests only to see the commission cut them down.

Of course, no one but company executives ever has known how much they really needed to remain solvent – all we know is that no California utility has ever gone under, despite PG&E’s highly questionable 2000s-era venture into bankruptcy, a trip to financial purgatory that somehow did not cause even one of the firm’s top executives to lose his job.

What we do know is that consumers who paid billions in maintenance money over many, many years would have every reason for righteous indignation if asked to pay for upgrading the pipeline systems of any of the utilities.

The same, of course, would be true if Southern California Edison and SDG&E customers who have paid for years into a fund for use in the eventual decommissioning of the San Onofre Nuclear Generating Station, were forced to pay extra because now it really is closed. In both cases, the blunders leading to the problems were done by the companies, not their customers. Which means they and their stockholders, not the customers, should be paying the price of failure, whatever it might be.

in Opinion
Related Posts

S.M.a.r.t Column: Gelson’s Looms Large

February 22, 2024

February 22, 2024

Our guest column this week is by SMCLC (the Santa Monica Coalition for a Livable City). SMCLC is a well-established...

S.M.a.r.t Column: Top Toady Town

February 18, 2024

February 18, 2024

Throughout history, from the ancient Romans and Assyrians to Russia’s ongoing invasion of Ukraine, siege warfare has served as an...

S.M.a.r.t Column: The Sunset of Home Ownership

February 11, 2024

February 11, 2024

We are watching the sunset of our historical and cultural American dream of home ownership as we now are crossing...

SMa.r.t. Column: B(U)Y RIGHT

February 4, 2024

February 4, 2024

“By Right” state housing laws that give developers, in certain projects, the ability to ignore codes ‘by right.’ Well, that...

S.M.a.r.t  Column: Serf City

January 28, 2024

January 28, 2024

Homelessness is a problem in California, and nowhere is this more evident than in our fair city, where the unhoused...

S.M.a.r.t  Column: Bond Fatigue

January 22, 2024

January 22, 2024

Last week’s SMart article,  described two critical problems faced by our Santa Monica Malibu Unified School District (SMMUSD): the declining...

S.M.a.r.t Column: Peace on Earth

December 27, 2023

December 27, 2023

We are all, by now, saturated with jingles, holiday cards, “ho ho ho’s,” countless commercial advertisements, and exhortations to feel...

S.M.a.r.t Column: On the Clock with Mayor Brock

December 17, 2023

December 17, 2023

I became Santa Monica’s Mayor on Tuesday, December 12, 2023, following a simple “switch of the chairs” transition with outgoing...

S.M.a.r.t Column: SANTA MONICA CITY COUNCIL 2024

December 10, 2023

December 10, 2023

Position:Seeking Santa Monica City Council Candidate(s) Introduction:Exciting opportunity for the right candidate(s) to work with like-minded Council members committed to...

S.M.a.r.t Column: ARB (NOT Ready to Build!)

December 3, 2023

December 3, 2023

Santa Monica City’s Architectural Review Board (ARB), established in 1974, acts “…to preserve existing areas of natural beauty, cultural importance...

SMa.r.t. Column: We are thankful for….

November 27, 2023

November 27, 2023

SMa.r.t. would like to wish you all a great Thanksgiving with friends and family and also to thank its readers...

S.M.a.r.t Column: Make the City New Again

November 19, 2023

November 19, 2023

When the COVID crisis struck, it cut the city’s income in half, demolishing many businesses and causing widespread layoffs and...

S.M.a.r.t Column: Four Futures

October 29, 2023

October 29, 2023

As well described by Paul Krugman, all cities have a core competency: things they do well or better regionally or...

SMa.r.t column: Beautiful Quartz Countertops Are Hurting Workers and Should Be Banned

October 9, 2023

October 9, 2023

Quartz countertops are super popular because they’re tough and can handle stains, scratches, and heat. But there’s a big problem:...

S.M.a.r.t Column: Architect’s Son Reflects On Civic Auditorium

October 2, 2023

October 2, 2023

Welton (David) Becket (1902-1969), pictured above, backed by a picture of our Civic Auditorium, was the designer of that famed...