EDITORIAL: California ratepayers should not pay PG&E’s Wine Country wildfires bill

Oct. 30--PG&E never learns.

The Wine Country wildfires have yet to be fully contained, but the utility already knows who it believes should accept responsibility for the estimated $1 billion in damages: ratepayers. Even if CalFire investigators determine it was PG&E's negligence that caused the blazes that killed 42 people and destroyed 8,700 homes and buildings.

What did you expect?

The Bay Area News Group's Paul Rogers reported Sunday that top PG&E executives met as recently as last week to lobby officials at the California Public Utilities Commission to make it easier for the company to charge ratepayers -- rather than shareholders -- when its power lines and other electrical equipment cause wildfires.

CalFire investigators have not determined what caused the wildfires. But the notion that ratepayers should bear the burden for any PG&E incompetence is unconscionable. The Legislature should guarantee that doesn't happen by passing the bill Sen. Jerry Hill plans to introduce in January prohibiting the practice.

A key factor is PG&E's acknowledgment that it has only $800 million in insurance to cover any damages from the wildfires.

It wasn't ratepayers who decided that issue. Nor was it ratepayers who decided where and how their money should be spent on maintaining the utility's power equipment.

No one wants to see PG&E go bankrupt. The utility also has a fiduciary responsibility to protect shareholders. But just as shareholders benefit from the annual $1 billion in profits PG&E rakes in, they should also absorb primary responsibility for PG&E's shortcomings as the risk they take when they invest in the utility. If PG&E can just turn to ratepayers to foot the bill, there is less incentive to buy the necessary insurance or do the necessary maintenance.

PG&E's shareholders have a guaranteed 10.4 percent profit on any investment in system upgrades. The PUC gave PG&E that guarantee following the utility's bankruptcy in 2001 as an inducement for investors to buy shares in PG&E.

At the same time, PG&E ratepayers pay some of the highest rates in the nation to maintain what is in concept a high quality system. But the Bay Area News Group reported last week that PG&E had failed in thousands of instances from 2010-2015 to conduct timely inspections and work orders required by the PUC in Sonoma and Napa counties, where the Wine Country fires burned.

The latest PG&E outrage is business as usual. The utility has repeatedly tried to force ratepayers to bear the burden of costs for safety improvements resulting from the 2010 San Bruno gas pipeline tragedy. It has done this despite having taken $150 million of ratepayer money that was intended for gas pipeline repairs and instead spent it on an executive salaries and bonuses.

You can't put a corporation in jail. The only way to force accountability is to penalize shareholders. They'll demand change when their return on investment drops.

And if that doesn't work, it's time to look at dismantling the utility and starting over with a plan to provide power to Northern California.

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