Calif. bill calls for turning PG&E into a public power utility

Public Power Daily

California State Senator Scott Wiener recently introduced legislation that would transform Pacific Gas and Electric into a public power utility.

The legislation, S.B. 917, would turn PG&E into a publicly owned entity, creating the Northern California Energy Utility District. The structure of the utility district would be modeled on the Long Island Power Authority in New York, which operates as a publicly owned utility that contracts with a public benefit corporation to staff a variety of jobs, such as tree trimmers, line workers, and truck drivers.

LIPA was created in 1998 when New York State acquired Long Island Lighting Co. In 2013, state law was amended to make LIPA a public-private partnership. Subsequently a subsidiary of Public Service Enterprise Group won a 12-year contract to operate LIPA’s electric system.

Northern California Energy Utility District’s public benefit corporation would be known as Northern California Energy Utility Services. The proposed public power utility district would also include PG&E’s natural gas distribution system.

PG&E is a subsidiary of PG&E Corporation.

The legislation would also help local jurisdictions as well as Native American tribes that want to form publicly owned utilities, and it would not interfere with communities that are already in the process of forming public power utilities. The legislation would also allow community choice aggregators to maintain and expand their current role providing power procurement services to customers.

“This proposed public-private partnership has the benefit of protecting workers’ salaries and benefits, and providing the positive value of community ownership,” said Barry Moline, executive director of the California Municipal Utilities Association. “Californians are asking for transparency, public accountability, high reliability and lower costs.”

In December, the city of Davis, Calif., became the latest city to support transforming PG&E into a customer-owned utility. Community choice aggregator Valley Clean Energy in late 2019 recently submitted a $300 million bid to purchase Pacific Gas & Electric’s lines, poles and other electricity distribution assets within Yolo County, Calif.

In June, the South San Joaquin Irrigation District (SSJID) forwarded to California Gov. Gavin Newsom a letter signed by the Mayors of the Cities of Escalon, Manteca, and Ripon renewing the cities’ endorsement of SSJID’s 15-year bid to takeover PG&E electric service for these Central Valley communities.

“Under existing law, investor-owned utilities such as PG&E make money not by selling electricity but by building power lines,” a memo from Wiener’s office summarizing the legislation, said. “As a result, they have a strong incentive to keep building power lines out into the fire zone, despite the potential risk, and very little incentive to prioritize safety and reliability.”

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