The bankruptcy of California utility PG&E illustrates the dangers of politicians directing business investment, according to a Wall Street Journal editorial on Friday. PG&E filed under chapter 11 last week amid a race to the courthouse by wildfire victims, insurers and other creditors. The utility, which provides electricity and natural gas to 16 million people in Northern California, says that it expects $30 billion or so in liabilities from more than a dozen major wildfires in recent years caused by its equipment. California’s Public Utilities Commission (PUC) reviews rates, enforces state laws and establishes safety requirements. Regulators allow utilities to pass most capital and operating expenses through to customers while guaranteeing investors a modest return. The problem is that PG&E’s government overseers seem to have prioritized the state’s climate goals over safe and reliable service, according to the editorial. PG&E rates are already among the highest in the country and have increased by 40 percent over the last decade compared to 15 percent nationwide. But the reality is that rates would be far higher if PG&E had spent more on insulating equipment, clearing overgrown vegetation and taking other precautionary measures to reduce wildfire hazards. Read more. (Subscription required.)
*The views expressed in this editorial are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
