We Shouldn’t Have to Pay for PG&E’s Mistakes

by Paul Hogarth on September 21, 2010

After PG&E spent $50 million of ratepayer money to pass Proposition 16, it didn’t take much for cynics to put two-and-two together. The monster utility company, which has a private monopoly on energy in much of Northern California, would just pass on their campaign loss to consumers. Now, PG&E’s neglect of its aging pipelines has resulted in four deaths and 37 homes destroyed – and again many are asking why PG&E spent millions on a self-serving ballot measure whose only aim was to stifle competition. And with the San Bruno tragedy on its hands, will it just pass on the price to clean up its mess to the consumers? If State Senator Mark Leno has his way, that won’t be legal.

As the San Francisco Chronicle reported last week, Mark Leno will introduce legislation that would block publicly regulated utilities from seeking a rate increase to cover the cost from fires or other catastrophes that were the cause of their own negligence. The San Bruno pipeline was installed in 1946.

“Ratepayers should not be on the hook to provide utilities with an open checkbook to cover excess expenses when catastrophic damages happen because the utility failed to do its job to protect the public,” said Leno. The San Francisco legislator is working with the consumer rights group TURN (The Utility Reform Network) to craft a bill.

As Bay Citizen reported yesterday, PG&E will now spend $100 million to help the victims of the San Bruno disaster – which would not be billed to the ratepayers. “We are demonstrating accountability,” said CEO Peter Darbee.

But the problem is not just compensation to those whose lives were destroyed. It’s about repairing the aging infrastructure that PG&E neglected for decades. That should not be billed to consumers who have little or no choice in selecting who their energy provider is.

And while PG&E brags that they’re helping to compensate victims of the San Bruno blast without billing customers, the utility giant is asking the state Public Utilities Commission to raise rates when the cost of compensating victims of “wildfires” gets excessive – even, said the Chronicle, when the casualties are caused by the company’s negligence.

After Prop 16 failed, I said PG&E deserves the worst coming its way – and its conduct continues to shock me. Hopefully, this will spur greater support for public power.

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