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New / Old Major Municipal Utility

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John Benson's picture
Senior Consultant Microgrid Labs

PROFESSIONAL EXPERIENCE: Microgrid Labs, Inc. Senior Consultant: 2014 to Present Developed product plans, conceptual and preliminary designs for projects, performed industry surveys and...

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  • Dec 3, 2019

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I've written several posts recently about the California wildfires in the last three years, and the attendant liability and bankruptcy of PG&E. But I almost missed a major result of the latter. This is a very complex story, but from the resolution of this bankruptcy at least one new major municipal utility will almost certainly emerge. Except they are not new, but over 100 years old.

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Bob Meinetz's picture
Bob Meinetz on Dec 3, 2019

John, I think everyone can agree on at least one thing about PG&E's situation here in California - it's a mess. And as the utility becomes more fragmented by this special interest here, and that special interest there, there's little evidence ratepayers or the environment will be better off for it.

Best for all, in the long run, would be bailing out PG&E, laying to rest the fiction of free-market electricity, and bringing the hammer of Sherman Act anti-trust enforcement down on utilities to end their self-dealing shenanigans. If anyone wants their own solar panels or wind turbines, wonderful. For those who want clean utility electricity, at a reasonable rate, delivered by reliable, well-maintained transmission, they certainly won't get it from the unregulated free-for-all envisioned by Gavin Newsom et al. That would require Newsom have the public's interests at heart, after all, and not his own.

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Matt Chester on Dec 3, 2019

PG&E provides at least the following functions in its service area: 1. Transmission Owner and Manager 2. Distribution Owner and Manager 3. Metering system owner and manager (including advanced metering infrastructure) 4. Trouble-call system owner and manager (including a very good automated voiceresponse system) 5. Supervisory control and data acquisition system 6. Energy management system (shared responsibility with California Independent System Operator (CAISO)) 7. System planning (shared responsibility with CAISO) 8. Supplier of last resort, if any Load Serving Entity in its service area defaults on their responsibilities A possible option is to allow a new PG&E to keep responsibilities for 1, and 3 through 8, and allow any new entities to assume responsibility for distribution ownership and management. Along with responsibilities for 4 through 8 would come the need to bill the new entities for these services (or bill consumers directly).

Thanks for laying this out, John. It's such a complex and challenging issue the sector is facing, and I worry that the complexity makes it really hard to actually convey to the public who it's affecting and who ultimately votes on people setting the necessary policy. Is that a challenge that you see being overcome, or is it even on the radar?

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John Benson on Dec 3, 2019

Bob and Matt:

Thanks for the comments, guys.

Bob: I actually pretty much agree with you take on the situation - the situation is a mess now and likely will end up in a bigger mess.

Also (I believe I might have said this in the paper), there are just too many ways for consumers like me to generate their own power. I know it's really hard to (legally) bailout of a utility, but if the pricing gets too high, I certainly might try. For now, I understand PG&Es tariffs really well, and am able to work them (and upgrade my homes) to get a reasonable utility cost.

Matt: I think that the City of SF can pull off municipalization, and existing electric utilities, can probably gobble up nearby territory if they are allowed.  CCAs - forgetaboutit.

Hetch Hetchy is an old customer of mine, and they have some really good people. Also the city has been providing major distribution to some major facilities for a long time (like SFO). Also the City is a strong union shop, so I'm sure they will work a deal with the IBEW to attract the added talent they need from PG&E.


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