San Jose to Propose Turning PG&E Into Giant Customer-Owned Utility--Update
21 Oktober 2019 - 10:17PM
Dow Jones News
By Rebecca Smith
San Jose, California's third-biggest city, is proposing to
convert PG&E Corp. into the country's largest customer-owned
utility, its mayor told The Wall Street Journal on Monday.
The most populous city served by PG&E hopes to persuade
other cities and counties in coming weeks to line up behind the
plan, which would strip PG&E of its status as an investor-owned
company and turn it into a nonprofit, electric-and-gas
cooperative.
The buyout proposal amounts to a revolt by some of PG&E's
roughly 16 million customers as the company struggles to keep the
lights on and provide basic services while preventing its aging
electric equipment from sparking wildfires.
San Jose Mayor Sam Liccardo said in an interview that the time
has come for the people dependent on PG&E for essential
services to propose a new direction. A cooperative, he said, would
create a utility better able to meet customers' needs because it
would be owned by customers -- and answerable to them.
"This is a crisis begging for a better solution than what
PG&E customers see being considered today," said Mr. Liccardo.
He said recent power shut-offs initiated by the company were poorly
handled, adding, "I've seen better organized riots."
PG&E in the past has said its energy systems are not for
sale -- a position it reiterated Monday -- and has repeatedly
beaten back efforts on the part of dissatisfied cities to form
municipal electric utilities.
"We have not seen the proposal. However, PG&E's facilities
are not for sale, and to do so would not be consistent with our
charter to operate or our mission to serve Northern and Central
California communities," the company said. "We remain focused on
the safety of our customers and communities and will continue
working together with our state and local government partners and
across all sectors and disciplines to develop comprehensive,
long-term safety and energy solutions for the future."
The buyout idea represents a dramatic twist in the debate over
how PG&E could emerge from bankruptcy, compensate fire victims
and address its many safety problems. It likely will face stiff
opposition from PG&E, which sought chapter 11 protection in
January from what it estimated at more than $30 billion in
wildfire-related liabilities. The company's bondholders also will
likely contest the idea after putting forward a rival
reorganization plan in bankruptcy court.
California officials are running out of patience with PG&E
after the company shut off power to roughly two million
Californians in 34 counties earlier this month to ensure that its
power lines, transformers and fuses didn't ignite fires that could
spread quickly amid warnings of high winds. PG&E warned Monday
that winds could trigger another round of shut-offs for parts of 17
counties later this week.
PG&E may have accidentally galvanized support for the public
buyout proposal last week when Chief Executive Bill Johnson told
state regulators that the utility may need to rely on power
shut-offs for up to 10 years. That is a horrifying prospect for
public officials, who note that the blackouts affect public safety
and the delivery of other basic services such as clean water.
"We need to align the financial interest with the public
interest," Mr. Liccardo said. "We hope there will be recognition
that this structure better addresses the public need and we're
looking to start the drumbeat to enable all of us to march
together."
Peg Brickley contributed to this article.
Write to Rebecca Smith at rebecca.smith@wsj.com
(END) Dow Jones Newswires
October 21, 2019 16:02 ET (20:02 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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