Will Regulators Break Up Scandal-Plagued PG&E?

VENTURA, CA - DECEMBER 5: A home is destroyed by brush fire as Santa Ana winds help propel the flames to move quickly through the landscape on December 5, 2017 in Ventura, California. (Photo by Marcus Yam / Los Angeles Times via Getty Images)

A California Public Utilities Commission report that Pacific Gas & Electric failed to fulfill its responsibilities to properly maintain natural gas lines from 2012 to 2017 even after a natural gas explosion killed eight people in San Bruno in 2010 may be the last straw for state regulators.

On Dec. 21, the CPUC released a dramatic statement saying it would consider drastic steps to address the “serious safety problems” it says the utility has long condoned. The commission said a break-up of the agency into smaller regional utilities or a state takeover would be among the possible changes it examined.

“This process will be like repairing a jetliner while it’s in flight. Crashing a plane to make it safer isn’t good for the passengers,” said CPUC President Michael Picker. “This is not a punitive exercise. The keystone question is would, compared to PG&E and PG&E Corp. as presently constituted, any of the proposals provide Northern Californians with safer natural gas and electric service at just and reasonable rates.”

CPUC looking at seven possible major changes

The CPUC statement said seven possible changes would be considered.

– Having “some or all of PG&E be reconstituted as a publicly owned utility or utilities.”

– Replacing some members of PG&E’s Board of Directors with members “with a stronger background and focus on safety.”

– The replacement of existing corporate management.

– Adoption of a new corporate management structure with regional leaders overseeing regional subsidiaries.

– Linking PG&E’s “return on equity” – the profits it shares with its investor-owners – to its safety performance.

– Breaking the utility’s natural gas operations and its electric transmission operations into separate companies.

– Ending the arrangement in which PG&E is controlled by a holding company so it becomes “exclusively a regulated utility.”

Picker’s statement was a remarkable turnaround from his comments on Nov. 15, when his upbeat remarks about the ability of PG&E to survive its fourth consecutive year of devastating wildfires in Northern California led the utility’s stock price tospike.

It reflected the anger among CPUC officials over a staff report released Dec. 14 that found the utility had systematicallyneglected natural gas infrastructure despite being fined $1.6 billion and convicted of six felonies in federal court over the 2010 disaster in San Bruno, a suburb of San Francisco.

Utility facing 500 lawsuits relating to fires it may have caused

Even if PG&E survives in something like its present form after the CPUC’s review, its future is still very cloudy.

Because of claims that PG&E was responsible for the devastating Camp Fire that killed 85 people in Butte County in November, U.S. District Judge William Alsup announced he was reviewing whether PG&E had violated terms of its federal probation in the San Bruno case.

PG&E also disclosed to the U.S. Securities and Exchange Commission that it is facing roughly 500 lawsuits with more than 3,100 plaintiffs over claims the utility was responsible for many of the dozens of wildfires in Northern California since 2016.

It is also facing wildfire-related lawsuits from the state Office of Emergency Services, Cal Fire, Calaveras County and other government agencies.

But while the CPUC is apparently ready for major changes at the utility, it’s not clear yet how state lawmakers feel.

On Nov. 19 – even as criticism of PG&E swelled as confirmed deaths grew in the Camp Fire – Assemblyman Chris Holden, D-Pasadena, was reported to be considering introducing legislation to help the utility deal with wildfire costs.

Holden helped pass a law earlier this year that allowed PG&E to spread out the costs from the liabilities it faced from 17 wildfires in 2017.

This article was originally published by CalWatchdog.com

California Legislators Want to Tax Text Messages

Text messageA California regulator’s plan to tax texts in order to fund cellphones for the poor hit a snag Wednesday after a Federal Communications Commission ruled text messages aren’t subject to the utility agency’s authority.

The decision by the FCC, which categorized text messages as “information services” on par with emails and not “telecommunications services,” came in an effort to combat robo-texts and spam messages. The California Public Utilities Commission now faces an uphill battle ahead of a scheduled vote on the measure next month.

Those opposed to the planned tax hailed the FCC decision a victory.

“We hope that the CPUC recognizes that taxing text messages is bad for consumers,” Jamie Hastings, senior vice president of external and state affairs for CTIA, which represents the U.S. wireless communications industry, told The Mercury News. “Taxing this service would burden those who rely on and use this service each and every day.”

The CPUC has not yet commented on the FCC’s decision. The group is scheduled to meet next on Jan. 10 in San Francisco. …

Click here to read the full article from Fox News

California’s Uber Hunt

uberThe way things are going, Uber may soon face a court challenge in California over its failure to use an umlaut. The popular ridesharing startup has already been hit by an administrative law judge’s recommendation that the company pay $7.3 million in damages and suspend operation in the state. At issue: Uber’s alleged failure to provide the California Public Utilities Commission with internal data about how many customers with service animals or wheelchairs Uber drivers serve, along with time, location and fare data.

This decision came just a month after the California Labor Commission redefined the app-based ride-hailing service’s business model. In that case, San Francisco Uber driver Barbara Ann Berwick demanded that the company reimburse $4,000 worth of expenses. The commission ruled that Berwick, a transsexual who previously operated a phone sex business — Linda’s Lip Service — was a full-time-equivalent employee during four months of sporadic driving for Uber. (Berwick, now a financial consultant, expressed disappointment with the money an Uber driver makes.) The decision directly threatens Uber’s business model, in which drivers sign up as independent contractors with a minimum of the fuss and paperwork associated with modern hiring, choose their own hours, and are clearly remunerated on a piecework basis.

Last week, a U.S. district judge in San Francisco allowed a group of cab companies to proceed with a false-advertising lawsuit against Uber. The same judge also greenlit a suit against Uber claiming that it spammed potential drivers with recruitment text messages. That suit was dismissed when electronic records showed that one of the plaintiffs had begun pursuing the company herself.

Notably, complaints about Uber typically aren’t coming from customers, and even among the firm’s drivers, crusades like Berwick’s are rare. In fact, what’s striking about the various campaigns against ride-sharing is their reliance on paperwork and credentialing instead of outcomes. The CPUC, for example, doesn’t assert that Uber is harming actual handicapped people, only that the company has failed to produce paperwork that proves the absence of harm. Similarly, the cab companies’ speech-related lawsuit — which focuses on safety claims made in Uber ads — does not claim that traditional taxis are safer than Uber rides. The plaintiffs assert instead that cab drivers are subjected to more paperwork than Uber drivers.

The anti-Uber campaign’s reluctance to assess outcomes is understandable, given the public’s strong revealed preference for the company. Interest groups can complain, but drivers and customers continue to vote for Uber with their time and money. In a free country or a sane state, a clear market decision in favor of a business would be the end of the discussion. But Uber is increasingly under pressure to furnish evidence that its model works in theory as well as in practice.

The company recently commissioned Los Angeles-based BOTEC Analysis to measure service in low-income neighborhoods — a market in which anecdotal evidence already suggests that Uber’s influence has been positive. BOTEC compared UberX with taxi services in Van Nuys as well as Central and East Los Angeles. The median wait time for an UberX ride in L.A. neighborhoods was five minutes and 52 seconds; for a taxi ride, it was 14 minutes and 33 seconds. The maximum recorded wait time for UberX was 20 minutes; for a cab, 57 minutes. Despite Uber’s widely maligned practice of “surge pricing” — a concession to the law of supply and demand that is for some reason considered outrageous — UberX also soundly beat traditional cabs on price, with a median cost per ride of $6.28, versus $15 for taxis. Surge pricing didn’t even produce a higher maximum price. UberX’s max cost per ride was $11.68, against $22 for cabs.

BOTEC is led by UCLA public policy professor Mark Kleiman, a thoroughly un-libertarian, good-government figure. Nevertheless, Uber opponents have dinged the study as free-market propaganda from the Uber central command. SHOULD YOU TRUST UBER’S BIG NEW UBER VS. CABS STUDY? New York asks. (Answer: a definite maybe.) Meantime, L.A. Weekly wonders, “Is Uber really being straight-up about its commitment to serve folks other than young, white professionals and party people?” But defenders of the taxi status quo face an even bigger hurdle: Uber’s very existence is an advertisement for the free market. It’s an obviously less-regulated initiative that has produced measurable, positive outcomes across a wide spectrum. No wonder people hate it so much.

Regulators Want All New CA Homes To Use ‘Zero Net Energy’

Solar panelsPlacing a big bet on solar power and new regulations, state officials have rolled out ambitious new requirements aimed at slashing energy use in newly-constructed homes.

“Buildings built in California starting in 2016 will have to comply with the nation’s toughest energy conservation standards,” the Central Valley Business Times reported. “The California Energy Commission has unanimously approved building energy efficiency standards that it says will reduce energy costs, save consumers money, and increase comfort in new and upgraded homes and other buildings.”

In single-family homes, that would amount to a drop in energy use by almost a third, relative to 2013 standards, the CVBT noted.

Cost and consequences

The New Residential Zero Net Energy Action Plan, as it has been dubbed, aimed “to establish a robust and self-sustaining market so that all new homes are zero net energy (ZNE) beginning in 2020.” Critics have reiterated longstanding objections to a statewide push of this kind, especially around the prospect of rising energy costs.

“The most complex issue will be valuing the homes, which will cost more upfront,” according to Greentech Media. “Currently, the CPUC is quoting an extra $2 to $8 per square foot after incentives. There will likely need to be incentives or creative utility billing, especially if the homes are providing demand-side services as the CPUC envisions. The CPUC says that the utilities are on board and will have to evaluate locational benefits of having net-zero homes on the system.”

As Greentech Media noted, planners have built in some would-be loopholes designed to make progress on ZNE without imposing the new standards too quickly: “Homes can be ZNE-ready, rather than actually being energy-neutral. That could mean they are solar-ready, for instance, but perhaps don’t have solar panels already installed.”

But even supporters of the plan have cautioned that executing on its goals may be a daunting challenge. At the Huffington Post, one analyst noted, “as California’s clean power goals rise, new capacity could begin to slow.”

“Some planned large projects are now on hold due to financial problems. Others face environmental challenges, such as threats to bird flyways and desert habitats. Large-scale solar plants, particularly those using solar thermal technology, are losing appeal to investors as photovoltaic panel prices plunge. And utilities, having largely reached their current renewable procurement targets, have few new projects in the pipeline. What’s more, the federal solar investment tax credit program for new utility projects drops from 30 percent to 10 percent after 2016, and ends completely for individuals.”

Unifying the grid

Nevertheless, optimism among policymakers and activists has remained high — largely because of the role of technological innovation centered in California. Apple and Google have embarked on so-called “grid-scale” renewable energy projects, while Tesla has pushed into the home energy storage business.

But some experts have implied that the problem of rising energy costs could best be addressed by linking up the net-zero energy industry with the zero-emission automobile industry. “A recent California study estimated that utility companies could earn $2.26 to $8.11 billion in net revenues from large-scale commercialization of EVs,” as reported in Fortune. “This is sufficient to allow utilities to invest both in installing charging infrastructure and return some of the revenues to their customers in the form of lower rates.”

By supplying ubiquitous EV charging stations, observers surmised, utilities could eventually recoup electrical power from cars embedded into the same flexible grid as homes. “The value of having a flexible load on the grid will grow even further with higher amounts of wind and solar,” Fortune continued. “Electric vehicles can be programmed to charge during peak solar or wind generation periods, preventing this valuable electricity from being wasted. In the future, electric vehicles could increase their value by putting electricity back into the grid as well[.]”

Originally published by CalWatchdog.com