For corporations like PG&E, disaster truly does pay big dividends, even when they don’t divert money they've requested for urgent repairs into executive and employee bonuses.
Here’s how PG&E's
modus operandi works today, followed by how PG&E and other for-profit utilities are working hard to make it work even better for their profitability in the very near future:
Status of PG&E Liability and Accountability TODAY
Under present law, natural gas transmission is legally classified as an "ultrahazardous" activity, so “a utility is
responsible for all harm that it caused, even if it is not found to have been negligent,” said David Levine, a law professor at UC Hastings College of the Law in San Francisco.
However, under present arrangements, PG&E can make a request for a rate increase to cover its own risks and its own disasters, and that request can be approved, modified or denied by the California Public Utilities Commission.
Regarding the covering of PG&E's risks, PG&E has a history
“of deferring repairs and using maintenance money for other purposes.In one infamous case, a 1998 report from the California Public Utilities Commission found that the utility had taken $77.6 million that was supposed to be spent trimming trees near power lines - a vital step in wildfire prevention - and
used it to boost corporate profits instead." Even more recently, PG&E also got approval for a multi-million dollar repair of a portion of the San Bruno pipeline north of the disaster scene that might have revealed problems in adjacent line where the explosion occurred.
PG&E pocketed that money, instead of repairing the pipeline. "The conclusion is,
they're putting profits before customer safety." How PG&E and Other For-Profit Utilities are Now Pushing Us to Pay
Of course, PG&E and other privately owned utilities would like to eliminate the business risk of a PUC denial of ratepayer increases in order to protect its history of government-approved 11% profitability:
Without a serious change of course, the billions or even trillions that are sure to come for increased safety will not – predominantly – be used for safety.
Safety is not profitable – especially when insurance, ratepayers and taxpayers will pick up the tab anyway.
On the other hand, the most likely beneficiary of any governmental attempts to force monies to be spent in a way specified by government regulators are Smart Grid proposals that go far beyond commendable goals of safety and green technology: They allow computerized remote sensing and monitoring of not just transmission lines but also the details of household energy use, down to the ability to sense which specific appliances are on and to turn them off remotely (in the name of energy conservation).
"Smart Grids" constitute the creation of an “Internet of Things” that Cisco predicts will be “100 to 1000 times the present size of the Internet.” Privacy and legal groups call the privacy and freedom implications of Smart Grid technology “colossal.”
Some may wish to stress the Safety aspects of Smart Grids – but remember that safety and prevention are not particularly profitable – they’re expenses. Why, then, is over 50% of the “smart money” today – over 50% of all venture capital money today -- being invested in “Smart Grid” companies, even before San Bruno? See, e.g.,
http://en.wikipedia.org/wiki/Smart_grid It ain't the first time PG&E gas lines have devastated Northern California neighborhoods.
On Christmas Eve 2008 an explosion killed a 72-year-old man in the Sacramento suburb of Rancho Cordova, destroyed one home and seriously damaged others. The National Transportation Safety Board's final report said
PG&E used a wrong pipe to repair the gas line two years before the explosion. Rancho Cordova residents had reported of a gas smell in the area before the blast. {Note: Sound familiar???}
In response to the NTSB's findings, PG&E said it
had taken "extraordinary measures" to ensure a blast like that would never happen again. http://www.kvoa.com/news/death-toll-in-massive-calif-blast-likely-to-rise/ PG&E, which rhymes with BP, will be worse than BP because it appears to stand for the proposition that "Disaster Pays." The PG&E monopoly virtually guarantees that it benefits greatly from any money for fixes. PG&E and other utilities may soon be able to sell to marketers the details about the age of your appliances and when and how often they are used (once Smart Grids are in place), all because of the dying need to computerize and remotely sense all operating conditions along utility lines.
The only way to prevent Disaster from paying, to prevent negligence from paying, and/or to prevent recklessness and crime from paying is to shut PG&E down, and not to allow its executives to re-appear under any other corporate mask as another utility.
Concerning this corporate death penalty proposal here, don't worry about PG&E CEO Peter Darbee. In 2009, he received a compensation package of $9.4 million (earning just a bit less than Goldman Sachs Group Chairman Lloyd Blankfein, who took in a total of $9.8 million in 2009), and received nearly $50 million since 2000. Instead, worry more about the fact that "by the time PG&E’s bankruptcy-related debts are paid off in 2012, {California} ratepayers will each have dished out around $1,500 to keep it from collapsing."
http://www.electricityderegulationblog.com/electricity-deregulation/electricity-deregulation-california/pges-audacious-attempt-to-enshrine-its-energy-monopoly-in-the-california-constitution Is there any other way to keep PG&E (given it's monopoly ownership of gas lines) from profiting from disaster than the corporate death penalty? Why should PG&E continue to exist?
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