California’s utility, PG&E, has put profits over public safety for too long. The company belongs in the hands of the people.
via The Nation
By Ben Ehrenreich
We knew it would happen and it did. California is on fire again. As of Wednesday morning, more than 100,000 acres were burning in a dozen separate blazes. When the governor declared a statewide emergency on Sunday, nearly 200,000 people had been ordered to evacuate their homes in Sonoma County and another 50,000 in Santa Clarita, just north of Los Angeles. Thousands more have been ordered out of their homes in LA, the East Bay, Napa, and Marin. This counts as normal now: just another smoky autumn in the Anthropocene. Mix hot dry winds with abundant crisp, parched brush, add capitalism, and watch a whole state burn.
The disaster had a prequel this year: darkness before flame. On October 9, Pacific Gas and Electric, the country’s largest investor-owned utility—an industry term that means they don’t give a shit about you—preemptively cut power to 738,000 California households, leaving more than 2 million people in the dark, many of them for days, some of them without warning. The utility’s website kept crashing, its phone lines were understaffed, and the maps it prepared of areas affected by the blackout were, admitted CEO Bill Johnson, “inconsistent and maybe incorrect.” But PG&E had little choice, averred Johnson: During fire season, one downed electricity line could easily spark an inferno. Of course, PG&E has for decades been repeatedly fined and sued for failing to inspect and maintain its own lines, causing fires that have killed dozens, left thousands homeless, and burned hundreds of thousands acres. In January, facing tens of billions of dollars in lawsuits over wildfires caused by its own neglected infrastructure, the company declared bankruptcy.
And now, it seems, they’ve done it again. The largest of the fires currently raging appears to have been sparked by a downed jumper wire on a PG&E transmission tower near the Sonoma county town of Geyserville. (“We still at this point do not know exactly what happened,” offered CEO Johnson.) That fire has now spread over more than 76,000 acres, and PG&E has cut power to another 2 million people, infinitely compounding the danger of the fires with blackouts of unprecedented scope. Without electricity, cell phone service goes down, as do some landlines. Emergency workers can’t communicate. Residents don’t know to evacuate.
Once again, the lives of many thousands of Californians are in jeopardy because their safety has been left in the hands of a utility that prioritizes its investors’ profits over human lives. If it wasn’t clear before, the climate crisis makes it abundantly obvious that we cannot afford to leave vital services under corporate control. As the flames spread with devastating regularity, it is no longer at all radical to suggest that utilities should be owned by and accountable to the communities that they serve. In California and everywhere else, it has become a matter of life and death.
However much evidence piles up to the contrary—exhibit one, climate collapse—the free-market gospel has long been that resources are most efficiently and rationally distributed within a system of private ownership. If only unwittingly, PG&E has for more than half a century been making the case to the contrary. The utility came to the attention of the rest of the country thanks to a legal clerk named Erin Brockovich, who in 1993 filed a class-action lawsuit against PG&E for having dumped hundreds of millions of gallons of carcinogenic wastewater in Hinkley, California. (They still haven’t cleaned it all up.) Over the next 25 years, the utility would pay out hundreds of millions in fines and settlements for gas explosions caused by its own negligence. The worst of them, in 2010, leveled 38 homes in a residential neighborhood of San Bruno, killing eight.
Then there were the fires: As early as 1990, years before worsening drought and higher temperatures began pushing wildfire season into apocalyptic overdrive, PG&E was facing criminal charges for failing to trim the trees growing alongside its power lines as required by state law. In 1997, the utility was convicted of no fewer than 739 counts of criminal negligence for a fire that burned 500 acres and leveled 12 homes in the High Sierra town of Rough and Ready. State regulators later charged PG&E with more than 500,000 instances, between 1994 and 1998, of failing to trim trees near their electric lines.
Over the next two decades, the utility paid out millions more in fines and settlements, but not enough, apparently, to convince executives that properly maintaining their lines was worth the expense. It was cheaper to pay off the bereaved than to invest in preventing accidents.
But a business model that had worked, however homicidally, for the utility in the 1990s and early 2000s left it criminally unprepared for the extreme weather that recent years have brought. State investigators found that PG&E was to blame for a fire that killed two people and burned more than 70,000 acres in 2015, for 12 fires that together killed 15 people in 2017, and for last year’s Camp Fire, the deadliest in California history, which killed 85 and razed the entire town of Paradise. All told, the utility was deemed responsible for more than 1,500 fires between mid-2014 and the end of 2017, more than one a day.
While cutting back spending on safety—PG&E left $246 million budgeted for moving power lines underground mysteriously unspent and diverted more than $100 million more into bonuses for executives and “non-employee directors”—PG&E managed to bless its shareholders with a staggering $4.5 billion in dividends. This summer, the utility revealed that it planned to reward its executives with more than $16 million in bonuses. California’s electricity rates, meanwhile, are among the highest in the country. PG&E’s are on average 35 percent higher than those of Sacramento’s publicly owned municipal utility. Any more questions about the efficiency of the market?
For decades now, PG&E has been making a convincing case for public ownership of utilities—so convincing, in fact, that in 2010 the company thought it wise to throw $46 million at a ballot initiative designed to thwart local efforts at municipal control of energy. (It lost.) Those efforts have been taking off in recent years, as have grassroots campaigns to democratize the grid—that is, decentralize energy production and distribution so that communities can take control over their own energy. (Large public utilities, after all, are in some cases only nominally more accountable than the corporate kind.) After last year’s disastrous fire season, Bay Area and northern California chapters of the Democratic Socialists of America teamed up with local environmental justice groups to launch a campaign—Let’s Own PG&E, they called it—for climate justice and democratic accountability, calling for a public takeover of the utility’s infrastructure, a transition to clean energy with worker and community ownership. “We knew more disasters would be coming,” organizer Keith Brower Brown told me. “We didn’t know how soon or how bad.”
On October 27, the campaign’s efforts got an implicit endorsement from Bernie Sanders, whose Green New Deal plan is the only one that calls for making energy infrastructure public. (Silicon Valley Congressman Ro Khanna and San Jose Mayor Sam Liccardo have since both come out for customer-ownership of PG&E.) “It is time,” Sanders tweeted, “to begin thinking about public ownership of major utilities.” That time actually came and went decades ago. Right now, PG&E’s shareholders are fending off a takeover bid by the carrion-feeding hedge funds that have bought up the company’s bonds—and the insurance claims of its wildfire victims. While the jackals scrap with the hyenas, the best California Governor Gavin Newsom could do was hope for the arrival of a more benevolent predator. On Saturday, Newsom put out a desperate plea for Warren Buffett’s Berkshire Hathaway to make a bid for the failing utility. But Berkshire Hathaway is heavily invested in coal and shale oil. Buffett is gambling, in other words, on the success of the very industries that are fueling the fires. And Newsom is gambling on him.
It is hard at this point to imagine a more bankrupt and exhausted system. When the winds die down and the rains finally come and these fires go out, we will only have a few months before the summer heat dries everything out again and the winds pick up once more. As DSA organizer Sydney Ghazarian put it, “We can’t wait for decarbonization to become profitable or for private industries to suddenly take interest in maintaining the energy infrastructure.” It is long past time. If any of us are to survive the climate crisis, we have to start defending ourselves now from the corporations that are intent on profiting off our destruction. If we don’t grab hold of our future, they will be happy to take it from us.