PG&E diverts ratepayer maintenance funds to profits

The “infamous case” cited by Robert Cruickshank is actually much worse than reported in Thursday’s Chronicle.  Under Pete Wilson’s PUC, PG&E under-spent (pocketed) multimillion dollar maintenance allowances included in rates, including its tree-trimming budget, not once but in three successive triennial rate case cycles.  The unspent ratepayer funds went right to the corporation’s bottom line.

When I was appointed to the PUC by Governor Gray Davis in 1999, the commission was about to vote on a new PG&E rate case.  The administrative law judge who heard the case, disgusted by the company’s performance, drafted a decision reducing the rate request by hundreds of millions of dollars.  The expectation of workers at the utility was that PG&E would respond with hundreds of layoffs rather than accept a reduction in profits.  

I offered an alternate decision that required the company to actually spend the money on tree-trimming (necessary to minimize service interruptions during storms and prevent wildfires), or return it to ratepayers.  My proposal passed 3-2, and over the next 3 years PG&E finally dealt with a decade’s accumulation of untrimmed trees.

The implementation of other reforms included in that decision, such as requiring the utility to track the condition of its electrical distribution system, meet its service appointment deadlines or pay penalties directly to the affected customers, and inspect homes for carbon monoxide was derailed by PG&E’s self-serving bankruptcy filing at the height of the 2000-2001 Energy Crisis.  After Gov. Davis caved in to corporate pressure and appointed anti-consumer commissioners (such as Susan Kennedy, currently Gov. Schwarzenegger’s Chief of Staff), any chance of serious regulatory oversight by the PUC disappeared.

This is another example of what is at stake in this year’s elections.  The new governor will be able immediately to appoint a majority to the PUC.  Whether this powerful commission will answer to consumers or to the industry it is supposed to regulate will turn on the outcome of the vote on November 2.

Utility Workers Union leader Carl Wood is the Democratic candidate in the 65th Assembly District (Riverside and San Bernardino Counties).

4 thoughts on “PG&E diverts ratepayer maintenance funds to profits”

  1. It seems to me that some years back, PG&E proposed laying off a lot of their maintenance people and hiring them back as independent contractors as needed.  It sounded like a dumb idea at the time, a way to screw the employees and chintz on maintenance.  Then we had a really bad El Nino winter and they backed off.  Did they ever get around to hatching this scheme?

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