Early this summer, PG&E replaced a power pole down the street from me. At my property, the power lines go underground, so there was a junction box buried below street level. What this meant was that for most of the day I had the company of a PG&E work crew that varied in number from five to eight.
Do you remember Hollywood movies from World War II that inevitably depicted every platoon as a cross-section of America? There was the Iowa farmer, the Chicago Italian wiseguy, the Brooklyn Jew, the quiet New Englander. Given that our military was segregated back then, blacks were typically omitted.
Seventy-five years later, my PG&E crew was an updated version. They were several country boys who were mechanically minded, a senior member by age who was African-American, a couple who were of Asian descent and at least one Hispanic. Plus one young woman.
I asked the woman about her job. She had recently been upgraded from trainee status and she said she had been well-received by the crew and that they were always giving her tips and tricks – the key on-the-job techniques that are only learned by doing.
They erected the pole on schedule with minimal interruption of our day. This was an unheralded PG&E success story. Perhaps one of the very few in the past year.
Later that day, with the TV back on, I happened to view a couple of the new PG&E commercials. One featured a meteorologist giving a tour of a new wildfire command center. Another headlined an arborist talking about culling dead trees in fire zones. Their purpose, of course, was pure public relations: to make us think better of a giant corporation suffering one of its worst years ever. Together with the solid work of the power pole crew, it was a good day for the utility.
PG&E can use all the good vibes it gets. The utility has been blamed for starting 16 (and counting) of last October’s wildfires and in the majority of those, PG&E probably broke state laws. We’re still awaiting the investigators’ conclusions about the devastating Tubbs fire, which lead to dozens of deaths in Santa Rosa.
As evidenced by my PG&E work crew, and as seen in the glossy commercials, the utility’s employees at street level are high-quality people who take their jobs seriously. They are the backbone of our gas and electric service.
Way, way above them are the company’s officers and directors. The CEO last year made $7.6 million in total compensation. The President and Board Chairman made more than $5 million. As for the supposedly independent directors on the company’s board – the ones who determined the compensation of the executives – they all were rewarded more than a quarter-million dollars to attend a bunch of meetings.
So the men and women who do the real work for the utility get standard union and professional wages and salaries. The big boys at the top get millions.
That’s part of the backdrop of the grinding effort to determine how and how much PG&E should pay for the damage and destruction from the wildfires.
The key man in this effort has been Napa’s state senator, Bill Dodd. He led the effort to craft legislation to attack this emotional and financial problem. In the final moments of the legislative session, his bill, SB 901, was passed and now sits on Governor Brown’s desk. He’s expected to sign it.
One legislator said we “need that energy” PG&E produces. If not, she said, “I’d be the first to push PG&E off the cliff. But we need their energy and if we push them off the cliff it will cost the ratepayers more.”
Here’s the dilemma: how to punish the company and its owners (i.e., the shareholders) without bankrupting the utility.
In Bill Dodd’s compromise bill, PG&E had one big victory and one big loss. It failed to get a change in a state law that punishes utilities if their equipment starts wildfires even though the companies were in compliance with all state operating and safety laws. It won the right to issue bonds to pay for lawsuits stemming from the fires. If the California Public Utilities Commission (CPUC) finds that PG&E was a good player in maintaining its equipment, then you and I, the ratepayers, would pay for those bonds on our monthly bills.
The company will undergo a financial stress test to see how much it can pay for fire damage without mortally wounding its finances. The Wall Street analyst who covers PG&E for Morgan Stanley, and who has an “overweight” rating on the company’s stock, said the legislation added up to a “constructive bill.” That means he likes it.
Bankruptcy, according to Dodd, wouldn’t help the fires’ victims; they couldn’t get the dollars to rebuild their homes and their lives. Dodd said, “We quite frankly cannot allow that to happen.”
Ultimately, we’re ending up with a compromise that will leave everyone displeased. That’s probably the best we can ask for.
Editor’s Note: Mark G. Epstein moved to St. Helena from the East Coast early this century after a career in international business.