The horizon is not so far as we can see, but as far as we can imagine

California Power Company Cuts Power to 800,000 Homes to Avert Wildfires


The region’s utility company, Pacific Gas and Electric (PG&E), has warned the shutdown could last several days.

The company’s transmission lines started the deadliest wildfire in California’s history last year.

With weather forecasts predicting high winds, the move is intended to prevent the risk of fallen power lines igniting more wildfires.

So, of course, PG&E could have and should have upgraded their infrastructure so this would not be necessary, but they didn’t. They gave large dividends to their stockholders instead.

PG&E is also, well, bankrupt, because of the previous fires it caused, so it isn’t in a position to make necessary improvements now.

But let’s not pretend this is a one company issue. The US has needed massive power infrastructure upgrades since the 80s. Most of PG&E’s infrastructure is 60 to 80 years old. They need to cut back trees around the poles and they need to replace old poles.

This is also a public issue. San Francisco, for example, has had 12 ballot initiatives to create a public utility and refused to do so.

Image by Admit One

People wanted tax cuts, deregulation and overpriced houses. that’s what they got, and a 5 day power outage is one of the prices.

This isn’t a difficult problem. In the 30s through the 70s, utilities were regulated. They were guaranteed a certain profit and required to spend a certain amount of money on upgrades and repairs. Dividends were fixed, and investors knew what they would get every year.

In other words, they were treated as critical infrastructure which needed to be maintained and built properly, and it was worth a bit more cost do so.

You can do this publicly, you can do it privately, you can do it as a combination but you must regulate and inspect them.

Or you can have “cheap” power until there’s a crisis, like massive wildfires, or brown and blackouts, etc.

Waving one’s hands and saying, “The market fairy will make it all happen by the actions of an invisible hand,” gets the usual results.

As for PG&E, the only solution likely to work is to just have government take it over and pay for the necessary work. Once that’s done, don’t privatize it.

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  1. Adam Eran

    Serving the same vicinity is the Sacramento Municipal Utility District (SMUD). It’s rates are 30% lower (a dividend for everyone), and its management isn’t consulting with criminal attorneys in case they’re charged with murder (something PG&E execs are doing).

    This is a case study for the “anti-socialists” to ponder. If Enron and the recent GFC didn’t do it for them, it breaks their narrative / myth-making that private is always better, and public is always incompetent…

  2. Adam Eran

    Update…. PG&E bankruptcy now entertains a private equity offer for the company…

  3. Larster

    In the 90’s when this was deregulated, someone called on my small business promising lower rates, if I switched. I asked him who was paying for the infrastructure maintenance and upgrades. After babbling for awhile, I obviously told him no. IMO this was a no brained. It would not work out. Looks like CA could be the canary in the coal mine.

  4. DMC

    All the utilities are so patently “public goods” that you’d think it would indeed be a no-brainer that they should be publicly managed, or at least managed to create the least expense to the public while returning the maximum utility, all the externals from fire insurance to pensions, considered. All that privatization has brought is the profit motive and the whole”Finance eventually destroys everything” that goes with it.
    People smarter than me have been saying we should be putting electrical power and telephone and every other kind of cable underground in conduits since the late 70’s at least. Its another one of those do it right the first time and you don’t have to KEEP doing it every time the wind blows.

  5. anon y'mouse

    as a native and former californian, i can tell you right now that they can always be counted on to do what is exactly wrong for the bulk of the population. boondoggles of development and “redevelopment” are fine, exporting all of their water in form of crops is fine, paving over huge areas for suburban living is all finefine (necessitating 3hr commutes each way to/from jobs). destroying their public k-12 schooling, which was at one time the top in the nation, is also fine. the Worthy have the money and insurance to mitigate against such things. they arranged the state so that it benefits them, and everyone else is a servant. writing was on the wall in that place as soon as the tech boom started.

    it’s Chinatown, Jake.

  6. PG&E quit paying any dividends at all in 2017.

    California can’t have it both ways. They hit the power company with huge fines for fires, depriving them of funds they could use to upgrade infrastructure and driving them into bankruptcy, and then scream in outrage when the power company de-energizes power lines to assure that future fires cannot be blamed on the power company.

    Yes, PG&E is badly managed in many ways, and I don’t like them any better than you do, but this argument is badly flawed.

  7. different clue

    @Bill H,

    If PG&E hadn’t done any of that upgrading with those funds before getting hit with the huge fine, why should anyone believe they ever had any intention to ever ever upgrade the infrastructure if they had remained un-fined and remained in possession of those funds?

  8. Hugh

    anon y’mouse, thinking of the patterns of development in California, the same quote came to mind.

  9. Ivory Bill Woodpecker

    CRAPitalists everywhere should drink a toast every day to Lenin, Stalin, Mao, Castro, Pol Pot, and all the other bloody-minded and bloody-handed Communists who built such grotesque horror shows in their countries that they managed the seemingly impossible feat of making capitalism the lesser evil–even if (I said “if”; I’m not sure) the gap is less than capitalist propaganda would have us believe. Plus, the Commies handed the capitalist propagandists a golden opportunity to tar all socialists–even peaceful, democratic socialists–with the Commie brush, and the capitalist propagandists took full advantage of that opportunity.

  10. @different clue
    Somewhat of a circular argument. They certainly aren’t going to use funds that have been sent to California’s bank account, and the utility’s options are limited after it has become bankrupt. Whether or not it would have upgraded had it been allowed to keep the funds is about as useful as wondering how many angels could dance on the head of a pin.

  11. Ché Pasa

    I suppose a lot of readers in California can’t respond to this post because they don’t have electricity today and their devices can’t be recharged easily or at all. Maybe they don’t even have access to the internet. Those in the Sacramento Municipal Utility District service area are so far immune from this kind of outage, despite the fire danger, because SMUD maintains their electric lines and equipment, clears brush and trees near lines, and mostly serves flatlands, croplands, urban areas rather than forested mountain terrain. I wouldn’t give them too much credit however. Even public utilities can be led astray: eg, the decommissioned Rancho Seco nuclear power plant that never worked properly, still has waste stored onsite (or did, I’m not up on current status) and for which SMUD customers are still paying both for construction/operations and decommissioning.

    At least from the few reports I’ve seen, the situation is dire for many thousands of homebound disabled PG&E customers who rely on electricity to keep their insulin chilled, their CPAP machines going, their oxygen generators and electric wheelchairs charged and so on. PG&E will do nothing for them. Various service orgs are scrambling to find workarounds. But many had too little warning to prepare sufficiently, and now they’re stuck. In some areas power will be off till Tuesday or Wednesday of next week. Then maybe a tally of the excess death and destruction will be done. Or maybe not.

    The issue goes back a long way, but deregulation is a primary culprit. Californians have repeatedly faced the worst consequences, but the few publicly owned utilities in the state — always targeted for privatizations — largely escaped the greed and insanity of the deregulation craze. The problem is that despite the debacles of the Enron era and the continuing fire-threats from PG&E and SoCal Edison’s greed and lack of maintenance, California’s government has been unwilling and functionally unable to address the problems and the dangers appropriately. Doctrine is to preserve, protect, and defend the private utilities no matter what. Put the burdens and risks on the customers, always. Restrict the growth of public utilities, even to the point of prohibition. And do noting to interfere with shareholder dividends unless forced to.

    As Ian points out, it’s not simply the utilities’ at fault; government and its deregulation frenzy supercharged the problems, and now seems utterly unable to comprehend let alone deal with the consequences.

    So long as the burden and risk is mostly or entirely on the backs of customers, I don’t think this will change.

    But every crisis is an opportunity, isn’t it?

  12. I used to kid my very conservative aunt that she was “pro death” (as in pro-death penalty). Her pro-royalty father was murdered by a Communist during the Greek civil war, so she wasn’t pre-disposed towards socialism, I’d say.

    However, working as a nurse who cared about people (and would often help them for free, e.g., giving them shots in their home, and lots of philanthropic activity), she was sufficiently appalled at the greed evident in the medical system to say we needed socialist medicine.

    I think she’d be just fine with public utilities as they were before.

    Although we live in a plutocracy, if there was first of all a consciously and overtly trans-partisan forum** for exploring needed policy changes; and, secondly, significantly more trans-partisan organizing (married to appropriate voting behavior*), we could wrestle some control away from the plutocrats. Maybe enough so that they wouldn’t have to turn out the lights for 100’s of thousands of Californians….

    * that means, amongst other things, punitive voting (especially in primaries) and readily crossing party lines, if there’s significant partisan identification, to begin with; i.e., zero loyalty to party, over the process of getting more responsive legislators elected

    ** such a forum would discourage reductio ad ideological bromides; or, worse yet, reductio ad one-liner talking points; those are already the ‘substance’ of typical talking head ‘news’ shows (even if sprinkled with some factoids, here and there), and contribute more to the continual dumbing down and division of America, as opposed to developing consensus around policies enlightened by plausible cost-benefit analyses

  13. ponderer

    I think you are missing the bigger issue. It doesn’t matter if it is public or private. It doesn’t matter if it is regulated tightly or not at all. The issue is a lack of accountability. Regulation *may* accomplish that, but we see very often it does not. It’s the same issue with Healthcare, the Environment, and government function in general. The people who are impacted by it have no voice or control over it. To the extent that public or private entities succeed, it is a product of accountability over all other factors.

    Democrats and Republicans use the public-versus-private Red Herring to distract from what really matters, accountability.

  14. anon y'mouse


    corporations are algorithmic machine vehicles for making money and avoiding accountability.

    corporations are now people, and have political voice like people (this was simply a statement de jure of what was already de facto).

    government has to be accountable for things that they largely do not control in any way, and are reluctant to take such control, because then they would have to either become accountable, or invent a system that faked such all over again.

    no one wants to run the show, they just want to assume the benefits of the show’s continuance.

  15. Hugh

    PG&E’s plight reminds me of the aging rock star who had run through all his money. When asked how this happened, he responded, “I spent it on drugs, women, and alcohol. The rest I just wasted.”

  16. bruce wilder

    In other words, they treated as critical infrastructure which had to be maintained and built properly, and it was worth a bit more cost do so.

    Probably I am making too fine a point of it, but we have instead more than a bit more expense as a result trying to save on cost (aka investment) because that additional expense is the money income of powerful people.

    You can almost always increase cash income now by foregoing renewing investment and the consequences will happen later and perhaps mostly to other people.

    ponderer call the problem, accountability, but i think the root problem is that political power has passed completely out of the hands of ordinary people, even en masse, and exclusively into the hands of a class of wealthy people who benefit on the income side from disinvestment and can protect themselves by and large from the consequences that are being visited on the society at large.

  17. different clue

    @ bruce wilder,

    Is there some method to break, erase and destroy the power of the class of wealthy people whom you describe? Or is physical roundup and physical extermination of all those people ( every individual member of that class) the only way to remove that class from obstructive existence to restoring general-welfare accountability? In this case to the operating of the physical assets of the so-called ” PG&E” ?

  18. yet another Jim

    … and let\’s not forget that during the current attempt to create a public utility in San Francisco, my Facebook feed has been filled with misleading advertisements against it, paid for by the Vacaville chapter of the IBEW. I post a shaming comment on every one of them but they just won\’t stop.

    Also, San Francisco proper was one of the few places not affected by the outage, but there was a grass fire on San Bruno Mountain directly under the PG&E line.

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