Mayors’ ambitious plan for PG&E fix would put California on uncharted electricity path
It would be the biggest government-led intervention in California’s electricity system in decades, a bold takeover of the state’s largest and most troubled utility as Pacific Gas and Electric Co. is assailed over widespread blackouts to avoid power line-sparked wildfires that have put it in bankruptcy court.
But will the proposed PG&E remake as a customer-owned cooperative bring cheaper, safer and more reliable power to Silicon Valley and beyond? One thing is certain: A state whose power business deregulation imploded in 2000 with rolling blackouts again would be charting new ground in delivering electricity.
“This is unprecedented,” said Robert McCullough, an energy consultant and adjunct professor of economics at Portland State University.
Following three years of devastating wildfires and a series of forced power blackouts to try and prevent equipment-related blazes, the mayors of San Jose, Oakland and 20 other cities and the leaders of five counties say it’s worth trying. San Jose Mayor Sam Liccardo is spearheading the local officials’ proposal to create a nonprofit cooperative that would raise the estimated $60 billion it might take to pay creditors and wildfire victims.
PG&E has declared it’s “not for sale.” But Liccardo said the cities and counties could use the California Public Utilities Commission, which must sign off on the company’s bankruptcy exit plan, as leverage.
A federal bankruptcy judge is weighing competing exit plans from PG&E’s shareholders and bondholders, groups Liccardo says are dominated by “hedge funds.” The cities and counties would be asking the court to consider their cooperative as another alternative when it evaluates them in the spring.
Their pitch is that a nonprofit cooperative could borrow at lower cost than a private utility, because it would have access to lower-rate financing and would not have to pay dividends or federal taxes.
“It’s going to take tens of billions of dollars to fix PG&E,” …read more
Source:: The Mercury News – Business