Five years ago, PG&E bragged about its response to disasters, safety record and financial stability in arguments fending off a takeover of its power network in Ripon, Escalon and Manteca.
Pacific Gas & Electric Co. doesn’t have much to brag about these days.
It’s hard to envision a more troubling scenario than the one facing this investor-owned utility — already in bankruptcy for causing last year’s wildfires, including one that wiped out a city and killed 86 people, leading to bankruptcy and criminal prosecution before sparking new wildfires this year that still are burning.
Perhaps it’s time for PG&E to take seriously the various offers of big money from agencies wanting to acquire PG&E power lines and substations and turn them into publicly owned utilities.
That would include a recently renewed pitch by the South San Joaquin Irrigation District, which delivers farm water like its partner on the Stanislaus River, the Oakdale Irrigation District. SSJID has wanted since 2004 to provide nonprofit power in south San Joaquin County, just like the Modesto Irrigation District does in Modesto and several surrounding communities, and like the Turlock Irrigation District does in Turlock and other towns, and like the Merced Irrigation District does, further south.
In June, with PG&E’s public image at rock bottom and wildfire season about to hit, SSJID sent a formal offer of $116 million, the same price it has offered for years. On Monday, PG&E responded with the same message as before: “Our facilities are not for sale.”
That’s a shame. Residents and businesses would be better served by a public utility whose local board answers to the people rather than to shareholders. And customers would pay less for better service.
SSJID has predicted it could lower electricity rates 15% in Ripon, Escalon and Manteca. Throughout Northern California, PG&E’s rates surely will go the opposite way — up, all experts predict, to cover ongoing wildfire damages, not to mention upgrading equipment to avoid future catastrophe. U.S. Rep. Josh Harder recently said he will write legislation slamming PG&E with heavy penalties if the company continues providing its executives with lavish pay — $28 million in salaries and bonuses in 2016 — while subjecting millions of Californians to blackouts.
Not surprisingly, PG&E has rebuffed SSJID at every turn, including rejecting official offers in 2006, 2014 and 2016.
In 2014, the San Joaquin County Local Agency Formation Commission sided with SSJID. That led to two court cases, which have been held up by PG&E’s bankruptcy, so the outcome is in limbo.
Meanwhile, the landscape has dramatically shifted. PG&E’s troubles have appeared on front pages of major newspapers across the nation for more than a week, and are likely to keep driving headlines as millions endure intentional blackouts, flee their homes and grieve losses.
The idea of local agencies absorbing PG&E infrastructure may be bold, but it isn’t new.
In 1923, people up north voted to create the Sacramento Municipal Utility District; PG&E dug in its legal heels and delayed the creation of SMUD until 1946. A few decades ago, PG&E valued its infrastructure in Folsom at $26 million, and eventually sold it for $13 million to SMUD, which annexed service in that city.
A few weeks ago, San Francisco offered to buy PG&E’s electrical operations for $2.5 billion. Rocklin, Lincoln, El Dorado Hills and Yolo County are exploring similar moves.
In a recent letter to Gov. Gavin Newsom, the mayors of Ripon, Escalon and Manteca framed SSJID’s latest offer as “a partial solution” to PG&E’s moral and legal trouble. Besides providing the company with badly needed cash, selling south San Joaquin County assets to SSJID could help motivate PG&E to reorganize and “implement a proper corporate culture that prioritizes safety and capital improvements to avoid future catastrophes,” the mayors wrote.
“SSJID will be more focused on service than on making money,” Manteca Mayor Ben Cantu said in a Bee interview. “There will be no stockholders making demands; the stockholders are residents of the community.”
The Modesto Bee long has been a strong supporter of publicly owned utilities, in theory and in practice. That hasn’t changed.
The governor — who has not shrunk from publicly criticizing PG&E — only days ago called for more local agencies to make bids for PG&E infrastructure. He should use his influence to further the cause of those who have been trying to do exactly that for many years, starting with SSJID and our people in Ripon, Escalon and Manteca. They deserve a chance to own their own power.