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  1. TopTop #1
    Peter Phillips's Avatar
    Peter Phillips
     

    PG&E: Monopoly Power and Disasters by the Rich 1%



    PG&E Monopoly Controlled by the 1%:
    A perfect storm of environmental destruction
    and the transfer of public utility wealth
    from California’s 99% to the Global Rich

    January 21, 2020

    The Pacific Gas and Electric Company (PG&E) has diverted over $100 million from safety and maintenance programs to executive compensation at the same time it has caused an average of more than one fire a day for the past six years killing over 100 people.

    PG&E is the largest privately held public utility in the United States. A new research report [HM1] shows that 91% of PG&E stocks are held by huge international investment management firms, including BlackRock and Vanguard Group. PG&E is an ideal investment for global capital management firms with monopoly control over five million households paying $16 billion for gas and electric in California. The California Public Utility Commission (PUC) has allowed an annual return up to 11%.

    Between 2006 and the end of 2017, PG&E made $13.5 billion in net profits. Over those years, they paid nearly $10 billion in dividends to shareholders, but found little money to maintain safety on their electricity lines. Drought turned PG&E’s service area into a tinderbox at the same time money was diverted from maintenance to investor profits.

    A 2013 Liberty Consulting report showed that 60% of PG&E’s power lines were at risk of failure due to obsolete equipment and 75% of the lines lacked in-line grounding. Between 2008 and 2015, the CPUC found PG&E late on thousands of repair violations. A 2012 report further revealed that PG&E illegally diverted $100 million from safety to executive compensation and bonuses over a 15-year period.

    PG&E has caused over 1,500 files in the past six years. PG&E electrical equipment has sparked more than a fire a day on average since 2014—more than 400 in 2018—including wildfires that killed more than 100 people,

    In October 2017, multiple PG&E linked fires (Tubbs, Nuns, Adobe fires and more) in Northern California scorched more than 245,000 acres, destroyed or damaged more than 8,900 homes, displaced 100,000 people and killed at least 44.

    In November, 2018, the PG&E caused Camp fire burned 153,336 acres, killing 86 people, and destroying 18,804 homes, business, and structures. The towns of Paradise and Concow were mostly obliterated. Overall damage was estimated at $16.5 billion.

    We need to liquidate PG&E
    for the criminal damages it
    has afflicted on California.
    PG&E has caused some $50 billion in damages from massive fires started by their failed power lines. They filed bankruptcy in January 2019 to try to shelter their assets. PG&E’s 529 million shares went from a high of $70 per share in in 2017 to a low of $3.55 in 2019. Shares are currently trading at $10.55 with zero returns. At this point PG&E actually owes more in damages then the net worth of the company.

    All but two members of the board of director resigned in early 2019, and the CEO was replaced. A new board of directors was elected by an annual stockholders meeting in June of 2019. PG&E now has a board of directors whose primary interest in 2020 is returning PG&E stock values to $50-70 range and returning to annual dividend payments in the 8-11% rate.

    The new PG&E management took widespread aggressive action during the fire-season of 2019 shutting down electric power to over 2.5 million people statewide. Nonetheless, a high voltage power line malfunctioned in Sonoma county lead to the Kincade fire that burned 77,758 acres destroying 374 structures, and forced the evacuation 190,000 Sonoma county residents. Estimated damages from this fire are $10.6 billion.

    The fourteen new PG&E directors were essentially hand-picked by PG&E’s major stockholder firms like Vanguard Holdings 2019 (47.5 million shares 9.1%) and BlackRock (44.2 million shares 8.5%). A new PG&E Director, Meridee Moore, SF area founder & CEO of $2 billion Watershed Asset Management, is also a board member of BlackRock.

    Only three of the new fourteen directors live in PG&E’s service area (four if we count the newly appointed CEO from Tennessee). One board member lives the LA area. The remainder of the board live outside California, including three from Texas, two from the mid-west and the remaining four from New York or east coast states. Pending PG&E Bankruptcy court approval, new directors are slated to receive $400,000 each in annual compensation.

    Ten of the new 2020 directors have direct current links with capital investment management firms. The remainder have shown proven loyalty experience on behalf of capital utility investors making the entire PG&E board a solid united group of capital investment protectors, whose primary objective is to return PG&E stock values to pre-2017 highs with a 11% return on investment. They claim that wide-spread blackouts will be needed for up to ten years.

    All fourteen PG&E board members are in the upper levels of the 1% richest in the world. As millionaires with elite university educations, the PG&E board holds little empathy for the millions of Californians living paycheck to paycheck burdened with some of the highest utility bills in the country. PG&E shuts off gas and electric to over 250,000 families annually for late payments.

    The PG&E 2020 board is in service to transnational investment capital. This creates a perfect storm for the continuing transfer of capital from the 99% to the richest 1% in the world, all with uncertain blackouts, serious environmental damage, widespread fires, with multiple deaths and injuries.

    We need to liquidate PG&E for the criminal damages it has afflicted on California. The “PG&E solution” is to manage PG&E democratically on the basis of human need, rather than private profit. It is time to take a stand for a publicly owned California Gas and Electric Company as the way to reverse the transfer of wealth to the global 1% and provide Californians with safe, low-cost and more renewable energy. All power to the people!


    For the full report with all PG&E board names see: www.projectcensored.org/pge[HM2]

    Last edited by Barry; 01-24-2020 at 11:34 AM.
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  3. TopTop #2
    SonomaPatientsCoop's Avatar
    SonomaPatientsCoop
     

    Re: PG&E: Monopoly Power and Disasters by the Rich 1%

    Well, I'm no fan of PG&E, but neither am I believer that a publicly owned utility is the better solution. SMUD is ok- but it's a far different beast. The publicly owned utility in So Cal has likewise been the cause of countless fires and has very low customer approval rates...

    I'm reminded of the ad Greenpeace ran after the Exxon Valdez spill with a picture of the ships captain- "It wasn't his driving that caused this- it was yours".

    And I think some of your claims re: "ownership" are dubious at best. Yes- Blackrock and Vanguard own a huge portion of the stock. Blackrock also rocked the financial (and political) world this week with their announcement that they would be taking climate change into account as a major factor in terms of all investments going forward. Blackrock and Vanguard's holdings surely include some of the "evil 1%" (which of course you DO realize means earning a little under $500K per year in CA...and less in many other states? )

    And dividends? hmm... you do realize how much we would be paying out on publicly issued bonds for a public utility? It's an unavoidable truth of business- when you need to borrow money - whether it's from friends and family, stocks, banks, or bonds... you pay a premium.

    The reality is- we live in a huge state. Much of rural and dry rolling hills and timber that has suffered greatly from everything from climate change to bark beetle infestations. We already have some of the highest electricity rates in the nation- and the cost to upgrade decades old equipment WILL - regardless of who "owns" the utility - drive prices far higher. And while there IS some technology that can make the high transmission lines much safer- there's not so much for the equipment that has caused most of the fires. And let's be honest here... to make a real impact on fire danger we're talking about clearing all trees and grass 100'+ on either side of ALL power lines... which quite frankly- will not happen... no one in CA is going to sign off on that visual austerity...

    But I will agree with you on one point at least- it IS nice to have a bogeyman to blame...
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  5. TopTop #3
    Mayacaman's Avatar
    Mayacaman
     

    Re: PG&E: Monopoly Power and Disasters by the Rich 1%

    Name:  DAM!.png
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    I originally posted this missive on another thread, here on WaccoBB. It is worth repeating, verbatim :


    P.G.& E. is a private corporation which has the franchise to supply electrical power for Northern California. This corporation leases the site adjacent to the dam at Hetch-Hetchy from the State of California, and operates the turbines which generate electricity from the water that spills over the dam.

    The Raker Act, {of 1913} which authorized the building of the dam at Hetch Hetchy - was floated as a bond issue by the citizens of San Francisco. The primary purpose for the Raker Act was to establish a municipal water system in San Francisco - but a municipal electricity system was also intended in the mix.

    Somehow - and the process was murky - a private joint-stock corporation took over the power grid. Capitalists will always do this - worm their way into a million dollar sure thing - so it is no marvel that this happened. Nevertheless, do consider this fact: That P.G.&E. charges rates that are probably double what either a municipal or a state run power grid would charge the people.

    A very informative tome that deals with the history of these issues, is the book, "DAM! WATER, POWER, POLITICS, AND PRESERVATION In Hetch Hetchy and Yosemite National National Park," by John Warfield Simpson, Pantheon Books, New York, 2005

    Here is a link to a bunch of information about the whole mess...

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  6. TopTop #4
    seedavelee's Avatar
    seedavelee
     

    Re: PG&E: Monopoly Power and Disasters by the Rich 1%

    In my view what Peter Phillip's describes in his post above is what so many large corporations are doing over the years diminishing the very asset they own and manage for purposes of their shareholders as well as upper management "lining their own pockets". It is a disgrace yet happens all too often.

    Now PG&E is paying the price of their neglect and rightly so, should. What is more difficult for me to understand is if they had allocated money that was earmarked for maintenance of their equipment and in general upgrading their antiquated equipment would this have been enough with regard to climate change and changing conditions in the last few years that have led to the "tinder box" environment we sometimes live in here in CA during the months of September,October, and November. I have to imagine this is the central question.
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