Investor-owned utilities with sky-high rates

Want to pass even more costs to ratepayers

2017 Northern California fires
  • 2017 Northern California fires
  • From Wikipedia

California’s investor-owned utilities — San Diego Gas & Electric, Southern California Edison, and Pacific Gas & Electric — already have among the highest rates in the nation. (San Diego Gas & Electric’s are consistently the highest.) Nonetheless, these utilities continuously try to stick ratepayers with even higher rates, often of dubious legality. Management screwups should be charged to shareholders, but, for example, Edison wants to stick ratepayers with major costs of the failure of the San Onofre nuclear plant, even though it was caused by management bungling.

Now they are at it again — possibly with the help of state politicians and the California Public Utilities Commission. Newly-amended bills would permit Pacific Gas & Electric to use state-authorized bonds to settle liability claims from the devastating wine country fires of last year. Those claims could be $10 billion to $15 billion. Buried in the AB33 is the statement that the huge possible liability, and uncertainty over whether the costs can be passed to ratepayers “create an imminent threat to the utility’s financial stability.” The legislation may take a new route in utility regulation: global warming may get some of the blame, even if a utility is found negligent. The bonds’ costs could be passed in part to ratepayers.

Erin Brockovich, made famous in a movie of that name, says “It’s another backdoor deal” for Pacific Gas & Electric, according to the San Francisco Chronicle, which is among several newspapers and other media preparing to battle the proposed legislation.

Wall Streeters are flooding Sacramento for lobbying purposes. Pacific Gas has already eliminated its dividend as its stock dropped. AB33 would be a “clear positive step” that would help shares recover, says Julien Dumoulin-Smith of Bank of America/Merrill Lynch.

Travis Miller of Morningstar explains why many investors are bearish on Pacific Gas stock: “California customer rates that are among the highest in the U.S. make it more difficult for [Pacific Gas] to push through higher rates to increase earnings and enhance shareholder returns.” That’s just our point: rates are so high already that Pacific Gas may not be able to make more rate increases stick.

“We don’t expect many new data points until or at least August 6, when the [State] Senate reconvenes,” says Dumoulin-Smith. Diane Conklin of Ramona’s Mussey Road Grade Alliance says she would not be surprised by a “late August surprise.”

This could wind up to be eerily similar to San Diego Gas & Electric’s experience with utility and regulator duplicity. In 2012, the California Public Utility Commission was to vote on two matters, neither of which had anything to do with the 2007 San Diego fires. But a commissioner pulled a fast one: at the last minute, he changed the wording of the proposal so that the commissioners would vote on whether ratepayers would pick up the tab for uninsured costs of the 2007 fires. Conklin and attorney Mike Aguirre immediately discovered the ruse, and the commission backed down. But as commission former insiders predicted, the commission brought it back up in 2015. Two years later, the commission, under consumer pressure, said SDG&E had to pick up the $379 million of uninsured fire costs.

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I see the usual suspects plumbing ever greater depths of shamelessness. But now, there should be more than this or that group of ratepayers outraged.

Raiding the state's bonds to prop up their shares makes everyone in California have to pay, not just that utility's customers. And it would compete with others seeking bonds to fund legitimate state interests, such as for infrastructure.

Indeed, if this goes through, it could establish a legal principle that corporations are entitled to public money to maintain their profitability.

Cassander: I agree. This would be a bad deal. There should be no more welfare for California's investor-owned utilities. Best, Don Bauder

Expect ever more Rate payer Rip Off's as California's BIG Utilities seek to increase their bottom line by sticking it to their ratepayers!

Imagine if a bill was past that would prohibit Utilities from making ratepayers libel for Utility screw-ups like San Onofre!

It will never happen because:

  1. The CPUC membership is selected by the Governor of CA and he has been selecting his cronies that are guaranteed to maintain the status quo.
  2. These same Utilities make Huge Donations to the very elected Officials that would have to risk cutting their own donation "throats" to support such a bill...
  3. The entire rate pricing system is designed to make ratepayer input not only difficult but almost impossible to understand for average ratepayer to have any meaningful input into the process. This problem is compounded by the fact that these Utilities call in all the Unions and other groups it has made donations too, so that their members appear in support of these very same rate increase's.
  4. Too many of the ratepayer "Watchdog" groups have been found to really be allies of the very CPUC and the Utilities that they are supposed to be watching, because the CPUC awards payments to only those groups it "feels" are providing a public benefit.

CaptD: You have summed it up very well, as usual. Ratepayers have been paying for utilities' greed and mismanagement. Shareholders should be paying for management's thievery and goofs. Best, Don Bauder

CaptD: No. BESET man. Best, Don Bauder

Thomas Weller: I don't know that we can pin this outrage on Peevey, who has been out of office for some time. But we can probably pin it on Picker, a Peevey clone. Both Peevey and Picker are close buddies of Gov. Brown, where the ultimate blame lies. Best, Don Bauder

Don, Could you put that last sentence all in caps with italics for visual emphasis? Brown didn't spawn this mess, but after inheriting it he made it worse, not better.


dwbat: You are a former magazine editor: wouldn't you say that all caps AND italics represent overkill? Best, Don Bauder

Yes, we never did that at the magazines. But a purple sans serif font and underlined was the way to go!

dwbat: That's too complicated for me. Best, Don Bauder

The answer is ratepayer owned utilities. Ratepayer owned utilities are NOT government owned or run. The ratepayers are the owners/investors and the management of the utility are directly responsible to the ratepayers. IID (Imperial Irrigation District) serving the eastern Coachella Valley (La Quinta, Indio), rates are 40% lower than SCE, SDG&E. The are one rate for all electricity used. No tiers. No summer/winter rates.

I can't see that happening in San Diego. There are too many who have been paid off over the years, probably with bags of cash and/or off/shore bank accounts.

dwbat: And advertising in local media. Best, Don Bauder

AlexClarke: Oh yes, there are movements for ratepayer-owned utilities. Cooperatives have been around for ages. In San Diego County, there are movements for community-owned or managed utilities, and variations thereof. Rates for municipally-run utilities are a good deal lower than rates charged by investor-owned utilities. Best, Don Bauder

Should be forced to clean up the mess with their tongues. High-level radioactive waste from decommissioned reactor forced upon the people, inadequate disposal practices. Look at Wiki: Hanford (Washington State) Nuclear Reservation and the Columbia River. Hipster Jerry on his knees.

shirleyberan: But we haven't been able to keep Edison from burying nuclear waste near the ocean. Best, Don Bauder

Lotsa ways to get soaked by the 1%. Thanks for the summary CaptD.

Lotsa ways to get soaked by the 1%. Thanks for the summary CaptD.

shirleyberan: It's nice to have CaptD back making comments on this blog. He is quite knowledgeable. Best, Don Bauder

Thank You!

FYI SDG&E is now doing their best to try and stifle the discussion RE: Community Aggregating Energy and have even created their own "support group" to join in the discussions which are now dragging out!


Every month there is a delay SDG&E profits greatly...

CaptD: SDG&E and other investor-owned utilities are fiercely fighting advancements that would relieve ratepayers of staggeringly high rates and also fight pollution: community choice and solar. Best, Don Bauder

Don: Any idea of how to estimate what SDG&E is saving per pay. Said a better way, what are SDG&El ratepayers spending every day that we cannot lower the rates for Energy?

Perhaps a FOIA request would be able to shed some bright sunlight on this ongoing ripoff.

My gut says it is at least 15 to 20 percent, especially since the current tiered system is so much more expensive for everything outside the base rate. This could be huge news!

Perhaps you could equate San Diego usage costs to the before and after costs of other areas in CA that have allowed Community Aggregating Energy (CAE) pricing.

Thanks for considering my suggestion!

CaptD, Actually what you need to submit is a CPRA (California Public Records Act) request (not FOIA) to CPUC. You don't have to be a journalist to do so. FOIA is for federal requests, not state. http://firstamendmentcoalition.org/public-records-2/sample-cpra-request-letter/

Thank You. I thought Don might like to track that info down for another one of his great Reader articles...

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