In 2017, PG&E was fined for a fire in 2015. In 2017, they were implicated in 17 wildfires that killed dozens. All on her watch. The CEO does nothing to address the risk. Now she resigns, and:
PG&E is planning to award her a perhaps less-than-golden parachute that could range from $2.36 million to $4.46 million, depending on how her departure is categorized
Step 1: devastate the company you're in charge of.
Par for the course for a company that “illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses” according to the state.
Knew someone who worked at PG&E. Her department's task was to support calculation of whether it was financially optimal to obey the law or risk paying fines, across PG&E's service footprint.
Part of my problem here is that PG&E has had rate hikes rejected by the government. When you back out the insanely profitable natural gas from their financials, their margins don't seem that great on the electrical side (if they are profitable at all, there's no breakdown of O&A/DAD). California can't reject rate hikes and then say "hey you didn't spend enough on safety!".
For example
> If history is any guide, PG&E probably won't get all the money.
> While the utilities commission seldom rejects rate-hike requests outright, it typically gives utilities less than they want, sometimes much less. In its last general rate case, PG&E asked for a revenue increase of $4.2 billion, spread over three years. The commission approved $1.9 billion. In 2009, the company proposed spending $2.05 billion to fight blackouts on its electricity grid. The commission approved $366.6 million.
I don't really see how this is entirely the company's fault. I hate to go full unpaid shill for some massive corporation but PG&E seems to have a history of the government telling them they can't raise rates to pay for this stuff.
Privatization of public services cannot work unless the private companies have liability for their actions. This is the necessary consequence of their negligence.
> California law compels utilities to pay for damages from wildfires if their equipment caused the blazes — even if the utilities weren’t negligent through, say, inadequate maintenance.
This would have happened whether or not PG&E was private. People want a scapegoat and PG&E is California's.
On the contrary. It was private industry that electrified the US. Samuel Insull realized that the way to achieve inexpensive electricity for everyone was to have much larger power plants than people were envisioning at the time. The logical conclusion of this was to create electrical monopolies that were regulated. He electrified Chicago and a large swathe of the country at a breathtaking pace.
So, no, the government did not create the electrical system and then privatize it. It was private from the get-go, and when utilities became monopolies, they were regulated.
It would still be funny to imagine California taking over electricity services.
"State-wide power coverage is estimated to be completed by year 2035 after a 10 year Environmental Review and pending lawsuits from neighbors who don't want power lines in their neighborhood. The costs were originally estimated for $10 billion but are now expected to be around $40 billilon"
....
"Meanwhile a startup called SmartZap is providing cheap electricity that you can purchase through their smartphone app."
Well, by the time crucial services are falling apart and people are dying, getting a settlement is cold comfort (obviously better than nothing but still). This is an argument for simply not privatizing public services or alternatively, for regulating such privatized services more heavily.
The problem with applying it to utilities is that they're near universal and have a natural monopoly, so when you try and punish them, the tendency to seek recovery through rates makes it everyone's problem.
And I'm not saying this from a "privatized profit/socialized loss" argument standpoint. I'm saying it from a "nearly everyone is some electric utility's customer, so when you find the utility liable, the customers (i.e. everyone) ends up paying for it somehow".
If the state assumed stewardship of the grid, the liability would still go to customers through either rates or taxes. So at that point, what we're really discussing, is how you feel about/how does fully public ownership of an electric utility fare relative to a regulated private entity replete with executive compensation and capitalistic motivations?
Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another. Who knows, maybe California will decide to try some grand gridless experiment. But the options are limited.
PG&E diverted funds for maintenance to their parent corp in the form of profits/bonuses/etc. This was going on for a very long time.
PG&E has been ramping up monitoring and maintenance (tree trimming/removal/etc) over the last couple of years.
In particular with the Camp Fire, a distribution line that size requires California PUC approval to shut it down -- due to the sizable grid impact. I can't find the reference, but my understanding is is that PG&E had asked for that approval earlier in the day/week to do the shutdown/maintenance but the request lingered (it takes time).
What about keeping government and environmental groups accountable for forcing polices that lead to damages - lack of forest clearing? They even admitted that existing approach was wrong.
The state was (maybe still) considering either breaking up PG&E or taking it over. I'd like to see change, but it's not entirely clear to me that it would run better as a state enterprise ---as long as many of the same people are there. But who knows.
Privatization of natural monopolies cannot work, period. Why anyone would think otherwise is beyond comprehension. At least when government-run utilities screw up, you can vote to change things. The only option when it's a private company is to move.
This isn't a privatization of a public service, it's a state-granted monopoly. If private property was respected, you could freely associate with another provider. Citizens of California can't.
To what extent could PG&E mitigate these problems with improved safely devices? There are various devices that can try to minimize arcing when there is a fault, for example Petersen coils. [0]
California already has a distinct advantage here compared to the rest of the country. In the other 49 states (to the best of my knowledge), it's legal for the utilities to use a conductor that is grounded at multiple locations as a neutral. This type of arrangement induces nasty currents through the ground (which is, I think, why it's illegal in CA -- those currents can apparently be quite harmful to livestock that are being milked with metallic equipment, not to mention hazardous to people in swimming pools and such). But it also means that, if another phase shorts to ground, then there is necessarily a large amount of fault current available.
In CA, the distribution wires can't legally have any intentional current flowing between themselves and ground, which means circuits that detect residual current will work.
The US uses overhead wires everywhere, because it's cheaper to install than underground wires. But then you're subject to damage from trees, wind, icing, etc. Everyone pays in worse uptime, and apparently also in fire risk.
I don't like PG&E, but if you have a gas leak in your house, and a guy walks down the street in front smoking a cigarette and everything blows up, does the smoker buy you a new house? The natural environment in parts of California has reached an inherently unstable state, with no logging, no prescribed burns, extensive suppression, global warming, draught, and limited brush clearing.
Is there any part of California that runs power underground rather than overhead cables? I understand it’s a significant cost and effort (sometimes infeasible) but at this point in time, just based on the past few years, I’m surprised not to have heard of any large scale pushes for underground power.
Nah, we just string the cables haphazardly wherever, through trees is just fine, because of course it's always sunny and nice in California. It seriously looks like third world infrastructure to someone from another part of the country, where weather events happen often enough that the utility has to give a shit.
But that's not where the fires start. They come from areas that are a) dense with sap-oozing pine trees that hunger for a fire to spread their seeds, and b) so remote that maintenance checks can't logistically occur often enough to effectively prevent dangerous situations.
As you might imagine, the expense of laying underground power lines to areas like these is way out of proportion to the benefit to residents. A colossal swath of northern and eastern California is forest, and replacing power lines across all of it would be a herculean infrastructure project that PG&E definitely cannot afford.
Yes. JWZ posted a story about a repair in one such cable: https://www.jwz.org/blog/2002/11/engineering-pornography/
And in this case, when the cable broke, it was hideously expensive to fix (downtime was costing $13,000/hour and this was back in 2002).
EDIT: don't click directly on the link or you'll be horrified by what you see. Instead, copy the link. JWZ doesn't think highly of HN.
It's pretty common in better off areas for the cables going directly to homes which are (relatively!) low voltage.
My understanding is that underground cables are most beneficial in areas that experience high winds and ice buildup. They may not be as well suited to CA since underground cables are just as (if not more) susceptible to damage from earthquakes and flooding. Being underground also leads to much higher capacitance in the cable, which can reduce the amount of current and shortens the cable's maximum length.
Is municipal red tape at all a factor in PG&E's under-maintenance of its lines and equipment? I feel like CEQA lawsuits and municipal planning codes and committees are given as reasons why we don't have denser housing and more fiber-to-the-home and dedicated bus lanes in the bay area (the Van Ness CEQA report took something like six years to do). Do the engineers for AT&T and Comcast and PG&E find similar frustrations with the process here?
"PG&E didn’t anticipate how quickly the drought would overtake heavily wooded areas north of San Francisco and outside Sacramento, said Stephen Tankersley, who oversaw PG&E’s vegetation-management program between 1999 and 2015. “It’s hard to believe that anybody would have predicted that it would have been like this,” said Mr. Tankersley, now a utilities consultant. “I’ve never seen anything like it.”
Conditions on the ground worsened dramatically and quickly, said PG&E spokeswoman Lynsey Paulo. She said the utility has reacted with speed and urgency. “We are very aware of the risk and we are doing everything we can to keep our customers and the communities we serve safe,” she said. “PG&E considers wildfire risk as a top-tier enterprise risk. It is evident in our actions.”
The utility removed 451,000 more trees from 2016 through 2018 than it had originally forecast, she said, in an “amped up” effort to deal with massive tree mortality."
...
"The task was complicated because some dangerous trees were on private land, forcing PG&E to negotiate with landowners, said Bob Fratini, a retired PG&E vegetation-management manager. Residents sometimes pressured crews, he said, to trim just enough to satisfy minimum requirements.
“Utilities should be given the right to remove any tree that could cause an outage or a fire,” he said. California regulators recently gave utilities more latitude in this area, saying they could shut off power to homes or businesses that prevent tree crews from working. PG&E’s Ms. Paulo said that isn’t necessary very often.
Sometimes, PG&E’s tree-clearing created new problems. After PG&E workers removed two trees in January 2015 southeast of Sacramento, a gray pine was exposed to wind and began leaning, according to a state investigation.
On a 102-degree day in September, the pine hit a 12,000-volt line and electricity ignited it, dropping embers onto dry grass and sparking the Butte Fire, which burned 70,868 acres and 921 buildings. Two people died."
These two blocks of text to me make it sound more like what you'd traditionally call an 'act of god', and not malfeasance (unlike San Bruno). While its unfortunate people died, and that there were great losses, you when you have people living in land that historically (over tens of thousands of years) had regular burn cycles, then humans came along and kept putting the fires out, I have less sympathy for those who take a loss - they should have known it was a risk of living there.
Also, I work with power utilities, having to turn the power off in a windy situation is an unwinnable situation, you either get complaints to the PUC, or you get higher fire risk - both are expensive to an extent to deal with - and without a historical record of fires in that area, its not really rational to just turn the power off, to tens of thousands of customers, and its harder to justify to your customers on its face - just as they are being excoriated now a failure to exert enough caution, if they had exerted the caution and nothing had happened, they would have been excoriated for exerting too much caution, again - its an unwinnable situation.
I wonder if the cost of providing energy with so much liability will force California to solar e.g. individual homes and businesses providing their own power?
That's actually part of the problem. Profits have been going down for years because their most profitable consumers (rich people with big houses) have been going solar. They don't adequately separate the cost of infrastructure from the cost of energy, so they've had less for infra.
Also we just passed a law to make this even worse by requiring solar on new homes.
Well, for one, they can maybe be hopeful that money set aside for keeping down the fire risk by trimming trees near power lines/stations wouldn't be diverted to executive bonuses, as PG&E did.
[+] [-] rgbrenner|7 years ago|reply
PG&E is planning to award her a perhaps less-than-golden parachute that could range from $2.36 million to $4.46 million, depending on how her departure is categorized
Step 1: devastate the company you're in charge of.
Step 2: collect millions.
https://www.bloomberg.com/news/articles/2019-01-14/pg-e-s-fo...
[+] [-] bleriot|7 years ago|reply
[+] [-] blevin|7 years ago|reply
[+] [-] thomaskcr|7 years ago|reply
For example
> If history is any guide, PG&E probably won't get all the money.
> While the utilities commission seldom rejects rate-hike requests outright, it typically gives utilities less than they want, sometimes much less. In its last general rate case, PG&E asked for a revenue increase of $4.2 billion, spread over three years. The commission approved $1.9 billion. In 2009, the company proposed spending $2.05 billion to fight blackouts on its electricity grid. The commission approved $366.6 million.
I don't really see how this is entirely the company's fault. I hate to go full unpaid shill for some massive corporation but PG&E seems to have a history of the government telling them they can't raise rates to pay for this stuff.
[1] 2017 financials including years they had rate hike rejections in the article I quoted: http://s1.q4cdn.com/880135780/files/doc_financials/2017/Q4/P...
[2] https://www.sfgate.com/news/article/PG-E-rate-plan-would-cos...
[+] [-] pmikesell|7 years ago|reply
https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion
[+] [-] rajacombinator|7 years ago|reply
[+] [-] crushcrashcrush|7 years ago|reply
[+] [-] cwkoss|7 years ago|reply
[+] [-] woah|7 years ago|reply
This would have happened whether or not PG&E was private. People want a scapegoat and PG&E is California's.
[+] [-] tomohawk|7 years ago|reply
So, no, the government did not create the electrical system and then privatize it. It was private from the get-go, and when utilities became monopolies, they were regulated.
[+] [-] eastbayjake|7 years ago|reply
[+] [-] Aloha|7 years ago|reply
[+] [-] capkutay|7 years ago|reply
"State-wide power coverage is estimated to be completed by year 2035 after a 10 year Environmental Review and pending lawsuits from neighbors who don't want power lines in their neighborhood. The costs were originally estimated for $10 billion but are now expected to be around $40 billilon"
....
"Meanwhile a startup called SmartZap is providing cheap electricity that you can purchase through their smartphone app."
[+] [-] joe_the_user|7 years ago|reply
[+] [-] gimmeThaBeet|7 years ago|reply
And I'm not saying this from a "privatized profit/socialized loss" argument standpoint. I'm saying it from a "nearly everyone is some electric utility's customer, so when you find the utility liable, the customers (i.e. everyone) ends up paying for it somehow".
If the state assumed stewardship of the grid, the liability would still go to customers through either rates or taxes. So at that point, what we're really discussing, is how you feel about/how does fully public ownership of an electric utility fare relative to a regulated private entity replete with executive compensation and capitalistic motivations?
Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another. Who knows, maybe California will decide to try some grand gridless experiment. But the options are limited.
[+] [-] jmspring|7 years ago|reply
PG&E has been ramping up monitoring and maintenance (tree trimming/removal/etc) over the last couple of years.
In particular with the Camp Fire, a distribution line that size requires California PUC approval to shut it down -- due to the sizable grid impact. I can't find the reference, but my understanding is is that PG&E had asked for that approval earlier in the day/week to do the shutdown/maintenance but the request lingered (it takes time).
[+] [-] albertop|7 years ago|reply
[+] [-] TomMckenny|7 years ago|reply
As opposed to legislatively forcing those assets to go where they are needed.
It seems privatizing utilities was not such a wonderful thing after all.
[+] [-] mc32|7 years ago|reply
[+] [-] smaddox|7 years ago|reply
[+] [-] lenticular|7 years ago|reply
[+] [-] DINKDINK|7 years ago|reply
[+] [-] amluto|7 years ago|reply
California already has a distinct advantage here compared to the rest of the country. In the other 49 states (to the best of my knowledge), it's legal for the utilities to use a conductor that is grounded at multiple locations as a neutral. This type of arrangement induces nasty currents through the ground (which is, I think, why it's illegal in CA -- those currents can apparently be quite harmful to livestock that are being milked with metallic equipment, not to mention hazardous to people in swimming pools and such). But it also means that, if another phase shorts to ground, then there is necessarily a large amount of fault current available.
In CA, the distribution wires can't legally have any intentional current flowing between themselves and ground, which means circuits that detect residual current will work.
[0] https://www.modernpowersystems.com/features/featurenew-roles...
[+] [-] lutorm|7 years ago|reply
[+] [-] cududa|7 years ago|reply
[+] [-] cameldrv|7 years ago|reply
[+] [-] mroche|7 years ago|reply
[+] [-] iaabtpbtpnn|7 years ago|reply
[+] [-] koboll|7 years ago|reply
But that's not where the fires start. They come from areas that are a) dense with sap-oozing pine trees that hunger for a fire to spread their seeds, and b) so remote that maintenance checks can't logistically occur often enough to effectively prevent dangerous situations.
As you might imagine, the expense of laying underground power lines to areas like these is way out of proportion to the benefit to residents. A colossal swath of northern and eastern California is forest, and replacing power lines across all of it would be a herculean infrastructure project that PG&E definitely cannot afford.
[+] [-] dragonwriter|7 years ago|reply
Yes, but mostly urban/suburban areas; AFAIK, the expense would be prohibitive for long-range transmission.
[+] [-] Diederich|7 years ago|reply
[+] [-] spc476|7 years ago|reply
EDIT: don't click directly on the link or you'll be horrified by what you see. Instead, copy the link. JWZ doesn't think highly of HN.
[+] [-] Rebelgecko|7 years ago|reply
My understanding is that underground cables are most beneficial in areas that experience high winds and ice buildup. They may not be as well suited to CA since underground cables are just as (if not more) susceptible to damage from earthquakes and flooding. Being underground also leads to much higher capacitance in the cable, which can reduce the amount of current and shortens the cable's maximum length.
[+] [-] tareqak|7 years ago|reply
[+] [-] gerbal|7 years ago|reply
[+] [-] DoubleCribble|7 years ago|reply
[0]https://en.wikipedia.org/wiki/Erin_Brockovich_(film)
[+] [-] Zhenya|7 years ago|reply
Whole article
[+] [-] cbhl|7 years ago|reply
[+] [-] Aloha|7 years ago|reply
"PG&E didn’t anticipate how quickly the drought would overtake heavily wooded areas north of San Francisco and outside Sacramento, said Stephen Tankersley, who oversaw PG&E’s vegetation-management program between 1999 and 2015. “It’s hard to believe that anybody would have predicted that it would have been like this,” said Mr. Tankersley, now a utilities consultant. “I’ve never seen anything like it.”
Conditions on the ground worsened dramatically and quickly, said PG&E spokeswoman Lynsey Paulo. She said the utility has reacted with speed and urgency. “We are very aware of the risk and we are doing everything we can to keep our customers and the communities we serve safe,” she said. “PG&E considers wildfire risk as a top-tier enterprise risk. It is evident in our actions.”
The utility removed 451,000 more trees from 2016 through 2018 than it had originally forecast, she said, in an “amped up” effort to deal with massive tree mortality."
...
"The task was complicated because some dangerous trees were on private land, forcing PG&E to negotiate with landowners, said Bob Fratini, a retired PG&E vegetation-management manager. Residents sometimes pressured crews, he said, to trim just enough to satisfy minimum requirements.
“Utilities should be given the right to remove any tree that could cause an outage or a fire,” he said. California regulators recently gave utilities more latitude in this area, saying they could shut off power to homes or businesses that prevent tree crews from working. PG&E’s Ms. Paulo said that isn’t necessary very often.
Sometimes, PG&E’s tree-clearing created new problems. After PG&E workers removed two trees in January 2015 southeast of Sacramento, a gray pine was exposed to wind and began leaning, according to a state investigation.
On a 102-degree day in September, the pine hit a 12,000-volt line and electricity ignited it, dropping embers onto dry grass and sparking the Butte Fire, which burned 70,868 acres and 921 buildings. Two people died."
These two blocks of text to me make it sound more like what you'd traditionally call an 'act of god', and not malfeasance (unlike San Bruno). While its unfortunate people died, and that there were great losses, you when you have people living in land that historically (over tens of thousands of years) had regular burn cycles, then humans came along and kept putting the fires out, I have less sympathy for those who take a loss - they should have known it was a risk of living there.
Also, I work with power utilities, having to turn the power off in a windy situation is an unwinnable situation, you either get complaints to the PUC, or you get higher fire risk - both are expensive to an extent to deal with - and without a historical record of fires in that area, its not really rational to just turn the power off, to tens of thousands of customers, and its harder to justify to your customers on its face - just as they are being excoriated now a failure to exert enough caution, if they had exerted the caution and nothing had happened, they would have been excoriated for exerting too much caution, again - its an unwinnable situation.
[+] [-] crushcrashcrush|7 years ago|reply
Not trying to be NATIONALIZE EVERYTHING or whatever, but we decided its worthwhile for water... why not power?
[+] [-] taf2|7 years ago|reply
[+] [-] jedberg|7 years ago|reply
Also we just passed a law to make this even worse by requiring solar on new homes.
[+] [-] joering2|7 years ago|reply
[+] [-] stefan_|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] smaili|7 years ago|reply
[0] https://www.cnbc.com/2019/01/09/trump-threatens-to-cut-off-f...
[+] [-] lordnacho|7 years ago|reply
Probably a lot of institutional memory will carry over.
[+] [-] zamfi|7 years ago|reply
Someone will keep electricity flowing in northern California...
[+] [-] astrodust|7 years ago|reply
[+] [-] InclinedPlane|7 years ago|reply