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PG&E Sparked at Least 1,500 California Fires, Now Faces Collapse (wsj.com)
140 points by laurex 3 months ago | hide | past | web | favorite | 185 comments



In 2017, PG&E was fined for a fire in 2015. In 2017, they were implicated in 17 wildfires that killed dozens. All on her watch. The CEO does nothing to address the risk. Now she resigns, and:

PG&E is planning to award her a perhaps less-than-golden parachute that could range from $2.36 million to $4.46 million, depending on how her departure is categorized

Step 1: devastate the company you're in charge of.

Step 2: collect millions.

https://www.bloomberg.com/news/articles/2019-01-14/pg-e-s-fo...


Par for the course for a company that “illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses” according to the state.


Any chance California is going to claw that money back and execs face criminal charges?


I'll give long odds against.


Even if they would have tried to before, the bankruptcy would make that essentially impossible; any action the State would make would just be another bankruptcy claim, competing against other creditors, mostly wildfire victims, reducing the proportion of any claims that are actually paid out.


Small chance for the former, but essentially no chance for the latter.


back?. The party just gave them a huge bailout bill last session.




This is a neoliberal capitalist country we're talking about. There's no chance of either happening.


Knew someone who worked at PG&E. Her department's task was to support calculation of whether it was financially optimal to obey the law or risk paying fines, across PG&E's service footprint.


A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.


Great scene - sad, but great


Isn't that just Risk Analysis?


It is but for laws to have some teeth it needs to be either illegal (maybe increase the fine hundredfold) to intentionally creating a situation that causes fines to be paid or the fines to need to be much higher.


Forget fines, throw them in jail. Guarantee they'd shape up real quick.


> fines to need to be much higher.

louder for the people in the back muuuch higher.


Wouldn't it be a criminal conspiracy?


Probably depends on the reporting structure of the organization.


How many people are dead because of that calculation?


Part of my problem here is that PG&E has had rate hikes rejected by the government. When you back out the insanely profitable natural gas from their financials, their margins don't seem that great on the electrical side (if they are profitable at all, there's no breakdown of O&A/DAD). California can't reject rate hikes and then say "hey you didn't spend enough on safety!".

For example

> If history is any guide, PG&E probably won't get all the money.

> While the utilities commission seldom rejects rate-hike requests outright, it typically gives utilities less than they want, sometimes much less. In its last general rate case, PG&E asked for a revenue increase of $4.2 billion, spread over three years. The commission approved $1.9 billion. In 2009, the company proposed spending $2.05 billion to fight blackouts on its electricity grid. The commission approved $366.6 million.

I don't really see how this is entirely the company's fault. I hate to go full unpaid shill for some massive corporation but PG&E seems to have a history of the government telling them they can't raise rates to pay for this stuff.

[1] 2017 financials including years they had rate hike rejections in the article I quoted: http://s1.q4cdn.com/880135780/files/doc_financials/2017/Q4/P...

[2] https://www.sfgate.com/news/article/PG-E-rate-plan-would-cos...


Those financials say they increased their net profits from under 900m in 2015 to 1.6B in 2017 (nearly a 10% net profit margin--that's after taxes, depreciation, etc).

Don't you think they could use some of that money to perform the maintenance required?

Instead they cut it: Operating and maintenance expenses:

  2015: 7B
  2016: 7.4B
  2017: 6.3B
It looks like their 700m in extra profits in 2017 came directly out of the maintenance fund.

Thanks for the link, but this makes PG&E look even worse... since pg&e caused more fires in 2017 than the previous year, and 2018 is even worse than 2017.. now I really want to see what they spent in 2018.


If you have no profits, CA is probably going to have to directly own the company. You won't be able to get cash from the stock market. At this point, that's the most likely outcome, but I can't imagine many people in the CA government actually want the responsibility.


This seems like a dangerous argument: either you give this private company all they ask for, or stuff burns down.

Is there a third-party evaluation of these budgets? And how would not "fighting blackouts" actually harm safety?


Let's not forget about the time they blew up San Bruno:

https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion


The pipe was installed in 1956, before modern testing methods such as xrays. It worked for over 50 years. Per PG&E, they have 6,700 miles of gas distribution pipelines [1] like the ones in San Bruno. They have another 40k miles of other gas pipelines. Building perfectly safe systems in the face of enormous lengths of pipe -- ie there will be manufacturing defects -- and over 50 year service lives seems like a very difficult problem to address.

Also, 2/3 of their gas pipelines were built before 1970

> A Chronicle investigation pointed out in October that two-thirds of PG&E's pipelines were built before 1970. That was a key year, in which regulations requiring better welding techniques were enacted.

> Also, the vast majority of PG&E's old pipelines can't be inspected with the most modern technique - a device called a smart pig, which is bristling with sensors and is run through the interior of a pipe. PG&E has also been unable to find complete documentation confirming the safety of maximum pressure levels for about one-fourth of its transmission pipelines in and around urban areas. [2]

Per the pdf [3], page 18, PG&E spent $834m capex and $4.9m opex over 4 years replacing 186 mi of pipeline. This averages out to $4.4m/mi, and much of it doesn't seem to have been in urban areas, which massively increases expense and public disapproval. So you can see the magnitude of the cost to replace the (2/3) of 6700 mi of pipeline built before 1970. Roughly (2/3) x 6700 x 4.4e6 = $19.6B.

None of this means PG&E is spectacularly well run. But the $100m they apparently were supposed to spend on pipe replacements is barely a drop in the bucket of doing a system-wide pipe replacement that we perhaps ought to be doing.

[1] https://www.pge.com/en_US/safety/how-the-system-works/natura...

[2] https://www.sfgate.com/news/article/PG-E-under-spent-on-pipe...

[3] http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=4594


Great details!

Makes you think that we should really be getting rid of gas pipelines and making electric-only houses. Maybe you wouldn’t even need to get rid of the pipeline during decommissioning? Just turn off the source and drain the network.

Unfortunately, gas is so cheap right now and also many prefer cooking with gas.


Step 3: get bailed out by CA so that its moronic taxpayer and voter base get triply screwed. (This will be in a week or two.)


Already happened, three months ago.


This is the US American way, and we're all fine with it.


Privatization of public services cannot work unless the private companies have liability for their actions. This is the necessary consequence of their negligence.


> California law compels utilities to pay for damages from wildfires if their equipment caused the blazes — even if the utilities weren’t negligent through, say, inadequate maintenance.

This would have happened whether or not PG&E was private. People want a scapegoat and PG&E is California's.


Nope, not a scapegoat. PG&E has a long history of negligence, poor planning, and straight up lying to consumers. I don't feel the same way about SoCal Edison, whom I only switched away from last month. They have their problems, sure, but it's nowhere near the level of malicious incompetence coming from PG&E for the past 20 years.

There are tons of news stories on PG&E if you look, many unrelated to the fires. They spent millions to lie to voters when Yolo County considered switching to SMUD. They routinely backdated maintenance reports to the government. They've had explosions in gas lines, and then there's the Diablo Canyon mess.


Non-Californian; from here, it looks like it would have burned sooner or later, thanks to changing climate & history of forest management practices. Whether lightning strike, hobo camp, stupid teenager, OHV, train, it was a tinderbox waiting to go. Is that an inaccurate perception?


I am living in California (but also consider myself non-Californian) near one of the areas that burned, and regardless of PG&E's incompetence, empirically the area was a tinderbox. The Carr fire was caused by a spark from a flat tire of an RV which caused the rim to create sparks against the road. Despite the forest service actively burning underbrush regularly, the fire was the largest in California history until the Mendocino fire unseated it a few weeks later. If sparks from a wheel rim can touch off a blaze, there isn't much margin for error.


In situations like this I think we would have to ask that considering that CA in general has high fire risk compared to other regions of the country, are the right people and entities bearing the risk and shouldering the costs of development there appropriately? I should think a lot of people have a vested interest in blaming PG&E, but if a completely ordinary event like a spark from a flat tire can cause a massive fire in the area that impacts a lot of human settlement directly, then someone is not assessing the risk of building and living there appropriately.


>then someone is not assessing the risk of building and living there appropriately.

This is the answer no one wants to hear.

For example almost 10 years ago Paradise almost burned. There was a grand jury review afterwards(that you can find online if you're willing to search some) that pointed out that the place was a tinderbox deathtrap and major changes needed to be implemented for safety.

The problem is populations in these places, along with most humans in general, like trees and shade and the idyllic beauty of nature. People would rather have a pine tree and bushes around their house, rather than a 100 foot cleared defensive parameter.


You are also leaving out environmentalists who fight against thinning and cutting down trees — source, the Angora fire in South Lake Tahoe, Canyon Creek complex in eastern Oregon, and many others. Playing politics and not acknowledging environmental lobby will not do anyone any good. If you know any actual foresters in the USFS, they will tell you as well because they are suid by environmentalists for stuff as simple as salvage logging.


California has indeed failed to update building codes to take into account fire danger, and would be unlikely either to enforce updated codes upon existing dwellings or to offer funding for people unable to afford safety improvements.


On the bright side, at the rate everything is catching on fire, bringing old flammable dwellings up to code won't be a problem for long.


Either NYT or WSJ (I forget) had some analysis for this after some of the fires. One of the cited reasons was that municipalities are fine building into sensitive areas, because it increases their tax base while the state shoulders the cost of fire prevention/fighting/etc.


That's a great example. 8 people died in the Carr fire. A tragedy. But is the driver of the RV with the flat tire guilty of 8 counts of manslaughter, to be locked away for the rest of their natural life? You might be inclined to say that is ridiculous! But just the other day, there were people calling for PG&E to stand trial for 86 counts of manslaughter.


It would not be so ridiculous if the driver had stopped somewhere and been warned that the conditions were dangerous and that the flat tire could start a fire then the driver decided to continue operation.


I dunno, that still sounds pretty ridiculous.

If you were that driver and charged with manslaughter I’m sure you would feel pretty upset at the injustice.


Timing is important here. Yes, it's a tinderbox, but it doesn't have to burn at the worst possible time to cause a massive scale firestorm. If a wildfire forms when the weather is not very windy, or colder, or moister, they do not spread as far, or as fast, or cause as much damage.

Exactly one of those is a non-anthropogenic source, lightning strike. Those tend not to occur during dry, windy conditions because of shear and needing to have enough moisture for cloud formation. Exception: when there already is a fire, pyrocumulus lightning strikes can add more ignition locations.

So far as the anthropogenic sources, we're in control of those by definition. We should try to prevent those as much as possible outside of prescribed burns. Everything burns sooner or later, but it doesn't have to go up all at once.

Much of the ecosystem depends on fire, but wildfires that do not do as much damage as the fires California has seen recently. But hey, the fires in Paradise shouldn't really be seen as a forest management problem, but rather as an intense urban conflagration. In much of Paradise, the trees survived, but fires jumped from house to house by wind-borne sparks. That was a disaster of urban planning, where evacuation routes had been made narrower in the past 10 years as population increased.

So we can't blame PG&E for all of that. But we can blame them for crappy maintenance in an area that regularly sees 100mph winds.


The situation in Paradise was problematic from a number of angles. Large fires returning seem likely from a multitude of factors.

PG&E lines setting 1,500 fires was definitely a way to, uh, jump start whatever process might have happened anyway. One should remember that 60 people died that, many trapped by fire on the road out (where inadequate roads were another problem). So a big fire starting but simply more slowly, might have stopped this particular tragedy. Given that a few year back, a PG&E gas line exploded killing around 30 people, this is an organization I feel zero inclination to give a pass on "inevitability".


Yes, it's been a tinderbox, but if you want to shift the blame away from PG&E, then you also have to shift the blame away from vagrants and arguably arsons.

It's a weird psychology that wants to pardon resourceful corporations while continuing to fault private citizens.


Destroying PG&E will hurt an awful lot of people that had nothing whatsoever to do with faulty equipment.


I'm curious: Who do you think will be hurt?


I spent half a decade working as a PG&E contractor for the Energy Savings Assistance Program (ESAP) provided by PG&E.

My job was to—at no cost to the occupant—install home weatherization measures into low-income housing. This ranges from new doors and seals to full attic, wall, and floor insulation. We provided this service to literally dozens of homes every working day of the year.

If PG&E fails, not only are all of the contractors out of jobs, but people in need will be denied a valuable service.

California provides a similar service (LiHEAP) with substantially less funding and far fewer benefits to the resident, and much of that funding has been eliminated in the past couple of years as I understand it.

The point is that issues aren’t generally as binary as you may think. PG&E isn’t a perfect company, but asserting that nobody would be harmed by their bankruptcy is a bit naive.


If I recall correctly, ESAP is a CPUC program that the utilities (PG&E, SCE, SDG&E, etc) administrate, but the funding comes from the state. LiHEAP is a federally funded program. I worked as an auditor for CPUC energy savings programs, including ESAP - these are statewide programs and not specific to a given utility.

Dissolving PG&E wouldn't remove the CPUC program funding, nor would it remove the work. Contracts would need to be renegotiated, but whatever utility springs up in PG&E's place (publicly or privately owned) will still need to comply with the CPUC mandates for energy efficiency, and the state funding will continue, so that work will still happen.


All the employees and their families, for example. Do you think the receptionists had anything to do with the equipment failures?

What about the large number of taxpaying vendors who rely on PG&E's business?

Then there are all the taxes paid by the employees, PG&E itself, and their suppliers.


Shareholders including pension funds. Nobody likes to be told that their retirement savings just lost 8% of their value because of a lawsuit.


16 million customers


There are always going to be unavoidable fires. That doesn't mean we shouldn't try to prevent the ones that are preventable.


I agree that they should be held responsible for negligence or poor faith actions. But I'm not sure they should be responsible if their equipment caused a fire because it was shot full of bullet holes by some idiot with a gun[1]. My understanding is the law currently holds them responsible if their equipment was involved, regardless of whether or not they were negligent.

[1] https://www.sacbee.com/news/state/california/fires/article22...


Keep in mind that, at scale, equipment is always breaking, whether the breaks are intentional or unintentional. The question is not whether the tower was broken by bullet holes or something else but how the equipment had been in this broken state beforehand. The task of a utility is to have a sufficient maintenance schedule to insure that most pieces of equipment unlikely to be broken even a few are. Overall, the "1,500 fires" part is what's damning, not any single fire. Again, overall, PG&E has terrible maintenance record and this is the impetus to hold them liable derives.


Read that article carefully. That report doesn't establish a timeline for that damage and certainly doesn't establish that shooting the pole caused the fire. That was an attempt by PG&E to muddy the waters on responsibility for the blazes.


They should be held responsible for it if they don't repair it in a reasonable amount of time. They are required by law to keep equipment in safe working order, but they have a terrible track record of doing that.

I wouldn't blame PG&E if somebody damages their equipment and causes a fire that day or sometime soon after. But if it's been months and the equipment is still lying on the ground with bullet holes in it that proves PG&E didn't inspect it or repair it for a long time.


SMUD... now that's a name I haven't heard in a long time.

Not one person I knew chose PG&E instead of SMUD.

The Yolo County stuff makes me sick, just like banning municipal wi-fi.


Keep in mind that PG&E performing adequate maintenance would have made causing a blaze considerably less likely. And all evidence points to PG&E indeed engaging in inadequate maintenance and doing so for year.

PGE clearly isn't the only entity to blame for the disastrous destruction of the town of Paradise but it certainly seems to carry considerable blame.


Less frequent fires doesn't necessarily mean less overall fire damage. And no-fires is not only impossible, but not desirable - see https://en.wikipedia.org/wiki/History_of_wildfire_suppressio...


Indeed, bad forestry, drought, global warming and so-forth are all to blame for large fires.

I don't think that implies that then PG&E should have taken the route of ignoring fire safety and imposing electrically activated "uncontrolled burn policy" here.

I mean, PG&E lines starting, say, 15 fires rather than 1,500 in a given high-wind, low-moisture night might have given some of the 60 people who died a bit more time to escape.


the 1500 number isnt probably as big as it sounds.

Based on this a PG&E caused fire could be caused by someone running into a power pole or anything else that causes downed lines. Fires from power lines dont sound like a huge deal, and those 1500 fires are spread over PG&E's whole service area too


When they blew up San Bruno they were clearly negligent.

They initiated the shift from low pressure to high pressure without proper testing inspection or notice. I assure you that any reasonable person tasked with doing that safely would have done better. The fact that it was done so poorly indicates a critical failing of internal process.


Isn't inadequate maintenance alone negligence?


On the contrary. It was private industry that electrified the US. Samuel Insull realized that the way to achieve inexpensive electricity for everyone was to have much larger power plants than people were envisioning at the time. The logical conclusion of this was to create electrical monopolies that were regulated. He electrified Chicago and a large swathe of the country at a breathtaking pace.

So, no, the government did not create the electrical system and then privatize it. It was private from the get-go, and when utilities became monopolies, they were regulated.


Perhaps just a little more complicated and nuanced than that: https://www.bloomberg.com/opinion/articles/2019-01-14/pg-amp...


PG&E has a long history of negligence and stripping whatever value remains from PG&E's shareholders is an eminently appropriate penalty.

PG&E may indeed not be entirely responsible for the wild fires but it's responsible enough that this kind of penalty is warranted - ie, trimming trees around PG&E of course was something they knew they had to do and that they failed to do (just like their failure to maintain the pipe that exploded earlier).

How California deals with fire risks and utility costs going forward is complex question. Naturally, it's made more complex by the influence large corporations wield.

In this day and age, bankruptcy still offers the possibility of PG&E sidling rate-payers with its cost while maintaining shareholder value, despite this being exactly what bankruptcy is intended to avoid. Naturally, I'd like to see the state of California prevent this but I'm not holding my breath. IE, California theoretically could seize PG&E and run it as a public utility but it probably won't and thus little will change.


Sure. I wouldn't claim otherwise. However,there are some key things missing here:

1. Lot of states have strict liability of this form for utilities.

2. California is not entirely unique in the land mass of the united states (or the world) in the issues it faces here.

It is only unique in that it has not done a good job overcoming them.

All of these viewpoints seem to start from from a position that it's impossible for PG&E to succeed (due to global warming, legal climate, etc), and then ask "what do we do in that situation".

But as mentioned, it's simply not impossible for PG&E to succeed, and also no evidence that it is particularly harder than it is in similarly situated areas.


Can you tell me what other state has dense urban environments in drier, rugged, forested terrain and seemingly yearly wind events > 60 mph?

Does not seem like a large venn set to me.


Plenty of front range Colorado would qualify. Sure, it isn't dry year-round, but it gets plenty dry during fire season. And with the pine beetle problem, there are large areas with massive amounts of fuel.


Can you show me that muni/pud power utilities are more responsive or better at paying out on liability?


It would still be funny to imagine California taking over electricity services.

"State-wide power coverage is estimated to be completed by year 2035 after a 10 year Environmental Review and pending lawsuits from neighbors who don't want power lines in their neighborhood. The costs were originally estimated for $10 billion but are now expected to be around $40 billilon"

....

"Meanwhile a startup called SmartZap is providing cheap electricity that you can purchase through their smartphone app."


Several cities / regions in CA have their own electric utilities

Few big issues with SMUD, MID or TID


Sure, SmartZap electricity may be cheap and the app is super intuitive, but they’re subsidizing rates through VC funding and not paying their “independent contractor” installers a living wage.


Well, by the time crucial services are falling apart and people are dying, getting a settlement is cold comfort (obviously better than nothing but still). This is an argument for simply not privatizing public services or alternatively, for regulating such privatized services more heavily.


What makes you believe a publicly run institution will do a better job?


They're accountable to voters, not shareholders. Seems to work for roads, fire, police, water and sewer, muni broadband, most shared services.


> Seems to work for roads, fire, police, water and sewer, muni broadband, most shared services.

You’ve never been to Chicago, eh?


Born, raised, own several rental properties in the western suburbs. Recently renovated tollways are 100% well done (especially the LED lighting), and the MDW expansion is going to be glorious when it's completed. Is there a cost? Sure. Society costs money. Is there corruption in the process? Sure. We're working on it.


Me too.

94 just south of the circle has been under construction for like a decade. I’ve never seen anybody working.

CPS teachers are the amongst the highest paid in the country, yet the schools are the near the worst.

Taxpayer dollars fund nothing but union graft and an ineffective police force which can write traffic tickets but not solve rampant violent crime.

The old saying in my neighborhood: “call for a cop, an ambulance, and a Pizza. See which arrives first”.

Saying “the government will do it better” ignores pretty much all the evidence.

Chicago is a glaring example, but NYC, New Orleans, Detroit, Philly and most other major cities have a similar history.


None of those institutions are accountable to voters. They are filled by career employees represented by powerful unions.


You can't sue them due to sovereign immunity. :p


PG&E is a pawn of the legislature, they follow all the regulations as best they can and don’t exactly mint money. They cannot unilaterally decide to do “more” to prevent fires without CA allowing them to raise rates to pay for it. It’s not anything close to a free market.

I think CA running electricity as a public service would be only good as an example to others not to make the same mistake.


The problem with applying it to utilities is that they're near universal and have a natural monopoly, so when you try and punish them, the tendency to seek recovery through rates makes it everyone's problem.

And I'm not saying this from a "privatized profit/socialized loss" argument standpoint. I'm saying it from a "nearly everyone is some electric utility's customer, so when you find the utility liable, the customers (i.e. everyone) ends up paying for it somehow".

If the state assumed stewardship of the grid, the liability would still go to customers through either rates or taxes. So at that point, what we're really discussing, is how you feel about/how does fully public ownership of an electric utility fare relative to a regulated private entity replete with executive compensation and capitalistic motivations?

Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another. Who knows, maybe California will decide to try some grand gridless experiment. But the options are limited.


Once you hit up the utility for all the money you can get, either you ditch the grid altogether, or everyone using the grid is going to end up paying for most of it in one way or another.

That's ridiculous. Broadly, there's nothing preventing California from seizing PG&E's assets as partial compensation for the company's past behavior. Thus the state of California could run PG&E as public utility pretty quickly if it wished and then charge whatever rates it felt appropriate, making up costs with taxes or not.

The main thing that would happen is PG&E shareholders and possibly bondholders lose their investment, high paid private executives and consultants are fired and the savings to the state.


The bigger question is would this cause a decrease of fires and other problems, reduce costs, and increase reliability and access to power. Hard to know. The problems of delivering power in California are hard and complicated.


I think you are underestimating the impact drastically of California seizing and nationalizing PG&E, or even trying to.


> That's ridiculous. Broadly, there's nothing preventing California from seizing PG&E's assets as partial compensation for the company's past behavior.

Nothing besides the fact that the state has no interest in running a power company? They could have nationalized it long ago if they wanted to.


> Broadly, there's nothing preventing California from seizing PG&E's assets as partial compensation for the company's past behavior.

Bankruptcy will indeed prevent that.


Why? Bankruptcy doesn't magically cancel your debts; you have to liquidate (almost) all of you assets.


> Bankruptcy doesn't magically cancel your debts

Bankruptcy sets a legally-defined priority of creditors, and prevents execution of judgements (it doesn't stop them being found liable and establishing a debt, but it does prevent execution of the judgement, i.e., by seizing assets to satisfy the debt.)

> you have to liquidate (almost) all of you assets.

Sure, California could bid on the assets.


That's why the solution is nationalization.

Their negligence will be our problem either way. The only solution that effects justice is to confiscate the company from shareholders entirely.


PG&E diverted funds for maintenance to their parent corp in the form of profits/bonuses/etc. This was going on for a very long time.

PG&E has been ramping up monitoring and maintenance (tree trimming/removal/etc) over the last couple of years.

In particular with the Camp Fire, a distribution line that size requires California PUC approval to shut it down -- due to the sizable grid impact. I can't find the reference, but my understanding is is that PG&E had asked for that approval earlier in the day/week to do the shutdown/maintenance but the request lingered (it takes time).


What about keeping government and environmental groups accountable for forcing polices that lead to damages - lack of forest clearing? They even admitted that existing approach was wrong.


Is that even feasible on a large scale? It seems to be more reasonable to create cleared perimeters around towns and also not to have single houses in the middle of forests.


And so there is an award that doesn't go toward improving infrastructure but leaves the organization for some other purpose (say 30% to lawyers fees).

As opposed to legislatively forcing those assets to go where they are needed.

It seems privatizing utilities was not such a wonderful thing after all.


The state was (maybe still) considering either breaking up PG&E or taking it over. I'd like to see change, but it's not entirely clear to me that it would run better as a state enterprise ---as long as many of the same people are there. But who knows.


Privatization of natural monopolies cannot work, period. Why anyone would think otherwise is beyond comprehension. At least when government-run utilities screw up, you can vote to change things. The only option when it's a private company is to move.


> Privatization of natural monopolies cannot work, period. Why anyone would think otherwise is beyond comprehension.

Reality begs to differ.


Yet another lesson of why natural monopolies should be under government control.


How would government control have prevented the fire?


PG&E by many reports has been negligent in maintenance. The taxpayers will ultimately bail them out, since they are essentially too big to fail.


Utility companies like PG&E are highly regulated. I worked at a company that serviced PG&E a while back and compliance made up a large part of our staff and were the first and last word on any business decisions.


So instead of PG&E shareholders taking the hit for negligence, the taxpayers will?


The taxpayers are going to take a hit regardless. Who do you think will be bailing out PG&E in the end?

Or do you think they will just leave 16 million customers without electricity?


This isn't a privatization of a public service, it's a state-granted monopoly. If private property was respected, you could freely associate with another provider. Citizens of California can't.


Yeah, because someone would build a second distribution line next to an existing one.

Can you imagine ever house with 10 wire pairs coming in from the street, one from each utility?

Competition on distribution or transmission is simply not going to happen. But it can - and should - happen on generation, as it already does in a lot of markets around the world.


You're talking about T&D redundancy when I'm talking about an open market of competition. You don't have to have T&D redundancy to have open market of competition. If you live in an area with an abundance of sun and wind, you can buy your local T&D and provide competitive pricing to your market. You cannot do this when there's a state-granted monopoly.


No, I'm not talking about T&D redundancy, I'm talking about competition and game theory.

Once you have a distribution network or a transmission line in place, nobody will build a second one. It doesn't make any economic sense.

Even if it was a complete laissez-faire (a bad idea, IMHO), there would be no competition on transmission lines and distribution networks.

But I do agree with more competition, particularly on generation. And you can make it better by decoupling transmission from distribution, and forcing the separate operation of each, plus a state-managed electricity pool, resulting in customers buying either from the pool or directly from generators.


To what extent could PG&E mitigate these problems with improved safely devices? There are various devices that can try to minimize arcing when there is a fault, for example Petersen coils. [0]

California already has a distinct advantage here compared to the rest of the country. In the other 49 states (to the best of my knowledge), it's legal for the utilities to use a conductor that is grounded at multiple locations as a neutral. This type of arrangement induces nasty currents through the ground (which is, I think, why it's illegal in CA -- those currents can apparently be quite harmful to livestock that are being milked with metallic equipment, not to mention hazardous to people in swimming pools and such). But it also means that, if another phase shorts to ground, then there is necessarily a large amount of fault current available.

In CA, the distribution wires can't legally have any intentional current flowing between themselves and ground, which means circuits that detect residual current will work.

[0] https://www.modernpowersystems.com/features/featurenew-roles...


The US uses overhead wires everywhere, because it's cheaper to install than underground wires. But then you're subject to damage from trees, wind, icing, etc. Everyone pays in worse uptime, and apparently also in fire risk.


Is the overall uptime really worse? (I'm really asking, I don't know the answer to that question)

Overhead wiring is more prone to failure, but faster to fix -- a car knocked down a power pole in my street, in a few hours, the utility replaced it with a new one and strung up new wires.

In contrast, a construction crew drove a pipe through an underground power line near work, it took nearly 2 days and a street closure before they restored power.

Much of california is prone to earthquakes, I'm not sure whether overhead or underground power would fare better in a quake.


No, not everywhere. Most of NYC uses underground wires. My neighborhood in Colorado near Boulder built in the 60s uses underground wires as well.


Underground wiring is far more efficient in big cities, as the major cost part is "miles of trench digged" and in a city the ratio of "customers per mile" is waaaay higer than in rural areas, thus reducing "investment per customer".

In addition this wiring is at the maximum 110 kV, you do NOT want a 380 kV feed in a major city. These things require a shitload of clearance, talk about 40m wide and 4m deep trenches!


There is no fundamental reason that a tree hitting an overhead wire needs to make a giant arc. Sure, fancy protection equipment in a substation is expensive, but long distance underground wiring is very expensive. Also, IIUC, underground wiring has much higher capacitance per unit length, which can be an issue.


Maintaining the equipments integrity and trimming trees seems like a good start


They do. I'm a PH&E customer living in a woodsy area, and they trim our trees regularly.


I don't like PG&E, but if you have a gas leak in your house, and a guy walks down the street in front smoking a cigarette and everything blows up, does the smoker buy you a new house? The natural environment in parts of California has reached an inherently unstable state, with no logging, no prescribed burns, extensive suppression, global warming, draught, and limited brush clearing.


This is a fatally flawed analogy. A more apt analogy would be one involving a professional engineer designing a system that creates uncontained electrical arcs for use in an environment known to be explosive.


Your analogy is flawed.

You assume the smoker is ignorant of the fact that there is a gas leak.

It would be better to say the smoker went into a gas filled house with signs that said "NO SMOKING!", smelt gas, looked around and lit up anyway.


I don't like PG&E, but if you have a gas leak in your house, and a guy walks down the street in front smoking a cigarette and everything blows up, does the smoker buy you a new house?

"Most ironic analogy ever"? You know PG&E is a gas company? Not only that, PG&E has killed people with gas line leaks?

https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion


this is a whataboutit response, and doesnt really engage with the users comment.


The users' comment was about multiple liability but his example strongly implied the gas leaker and not the smoker should take the blames. PG&E is only partly for all of the terrible things that have happened under their watch but liable enough that they deserve harsh penalties. I think it is telling when someone groping for a defense by analogy can't help but stumble onto an analogy that says the opposite of what's intended. It can be symptom that one's overall argument is quite thin.


As I said, I don't like PG&E. High rates, San Bruno, etc, etc. The problem is that a lot of the forests in California are just going to burn, whether it's tomorrow or in five years, because they are tinderboxes. Maybe any individual ones will be caused by poorly maintained electrical lines, or a careless campfire, or a cigarette or lightning, but given enough time, there will be a spark. In much of California, wildfire is part of the natural cycle. A lot of of California is dry, so downfall wood doesn't rot. The only way that energy gets released is for it to burn. Because we use forest management practices developed where downfall wood does rot, and because politicians don't like to tell people that their cozy cabin in the woods needs to burn down, we've backed ourselves into an ugly corner with way too much fuel on the forest floor. You can blame PG&E, but if it wasn't them with the ignition source it would have been someone else.


I'm not sure harsh penalties will solve this particular problem, or prevent it from happening again, very honestly.

As I alluded to elsewhere on the thread, the whole thing strikes me broadly as act of god - everything about the weather and conditions was extraordinary - power lines fall down, they fail, they spark, none of this is terribly unusual, usually nothing bad happens, so you dont hear about it.


It is slightly worse than the simplistic analogy by the OP. Regardless PCG should have taken extra precautions due the environment in CA. That would have been the responsible course of action for the environment, shareholders etc. Afterall you dont go to Mars with a swimsuit. (Hows this for an analogy?)


Is there any part of California that runs power underground rather than overhead cables? I understand it’s a significant cost and effort (sometimes infeasible) but at this point in time, just based on the past few years, I’m surprised not to have heard of any large scale pushes for underground power.


Nah, we just string the cables haphazardly wherever, through trees is just fine, because of course it's always sunny and nice in California. It seriously looks like third world infrastructure to someone from another part of the country, where weather events happen often enough that the utility has to give a shit.


>It seriously looks like third world infrastructure to someone from another part of the country...

and:

>we just string the cables haphazardly wherever, through trees is just fine...

???

That's actually the same infrastructure as the rest of the nation. Or at least, that's what it's like every place in the US that I've lived. Wisconsin, Minnesota, Houston, etc etc etc.


PG&E can’t afford to do that without raising capital. CPUC won’t approve rate hikes to finance that capital. Legislators pass no new laws or regulations.

Then when it goes awry CPUC and legislators stand far back and decry PG&E for negligence.


They could afford to pay out a regular dividend, illegally skipped safety measures on pipelines, and “an independent audit from the State of California issued a report stating that PG&E had illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses”. Ratepayers and taxpayers should never have to pay for deliberate executive negligence.

https://www.latimes.com/business/la-fi-pge-safety-investigat...


Hold on they were not allowed to do secondary offerings? Or debt raise? Have you seen the stock price of PCG? Share price trend does not resemble a company with financial troubles.


PG&E had more than enough money to bury its power lines, and used that money to fund dividends and executive bonuses instead.


Have you been to a third world country?

Most power cables near people are buried, where it makes sense. Burying cables if expensive and the risk of wild fire is pretty low if brush and forests are maintained. However, we keep putting out fires instead of letting things burn down normally. Wild fires may be sparked by an electrician malfunction, but that's merely a symptom of the larger problem of poor natural resource management.

In a third world country, wires are draped across houses in a way that is very likely to cause problems. The situation in every part of the US that I've visited is better than every third world country I've been to.


Plenty of urban and suburban areas do this, yes.

But that's not where the fires start. They come from areas that are a) dense with sap-oozing pine trees that hunger for a fire to spread their seeds, and b) so remote that maintenance checks can't logistically occur often enough to effectively prevent dangerous situations.

As you might imagine, the expense of laying underground power lines to areas like these is way out of proportion to the benefit to residents. A colossal swath of northern and eastern California is forest, and replacing power lines across all of it would be a herculean infrastructure project that PG&E definitely cannot afford.


> Is there any part of California that runs power underground rather than overhead cables?

Yes, but mostly urban/suburban areas; AFAIK, the expense would be prohibitive for long-range transmission.


Read on this a while back...also repairing is a pain.


Depends on the neighborhood. I've lived in both. Here's one location where all of the cables are underground: https://goo.gl/maps/BhEVwjPSitF2


Yes. JWZ posted a story about a repair in one such cable: https://www.jwz.org/blog/2002/11/engineering-pornography/ And in this case, when the cable broke, it was hideously expensive to fix (downtime was costing $13,000/hour and this was back in 2002).

EDIT: don't click directly on the link or you'll be horrified by what you see. Instead, copy the link. JWZ doesn't think highly of HN.


It's pretty common in better off areas for the cables going directly to homes which are (relatively!) low voltage.

My understanding is that underground cables are most beneficial in areas that experience high winds and ice buildup. They may not be as well suited to CA since underground cables are just as (if not more) susceptible to damage from earthquakes and flooding. Being underground also leads to much higher capacitance in the cable, which can reduce the amount of current and shortens the cable's maximum length.


I live in San Jose, CA.

The feed that comes to my house is underground.

In my backyard, along the fence, are electric wires up in the air to feed my neighbors.

So it's a mix...


Underground cables are expensive in the flatlands. Underground cables are insanely expensive in hill country. Also they cause significant environmental damage to install, which in CA is a significant consideration.

Also sparking can occur at ground air interfaces for different reasons, so it isn't a 100% solution.


Underground cables aren't without problems either. Old stuff breaks without capital investments.

It still ages, and the high cost of inspection and repair means you're going to have problems. NYC has manhole fires all of the time.


While it might work with distribution networks, it would be much harder for transmission networks. It would be essentially building a pipeline to transport electricity.


Large swaths of Orange County are like this (think Irvine).


Same story from the Associated Press: Utility seeks bankruptcy protection over California fires - https://apnews.com/5e70c4c99a044c4192d7ee52e38330f2 .


A preview of some of the economic toll of climate change


You're getting downvoted b/c there is enough negligence and history involved that there are other more proximate reasons so the "climate change" line feels off-topic, but, you're not wrong.

The bad maintenance on the transmission tower is what created the spark, but there's also the point that the area was such a dry tinderbox that one spark was able to ignite the tragedy.

Resilient systems don't show such fragility.

The fact that an unattended campfire, a hot muffler, or any other number of things (inadvertent or intentional) could have caused the same effect shows there's a systemic challenge here. We can grab whatever we legally can from this business malfeasance, but systemic challenges are much harder to deal with (and there's no one to easily blame)...

The tinderbox is not going away, and whatever comes after PG&E is going to be operating in a far riskier business environment.


PG&E has been obviously negligent to any casual observer for at least the last 40 years. But yes, there is more to come.


- Found negligent in the San Bruno gas pipeline explosion

- Found negligent in the pollution in SoCal Hinkley groundwater pollution


"A preview of the dangers of trying to control the environment" would be a more accurate assessment of US wildfires, I'm afraid. After all, the biggest contributor to their size and deadliness is the absolutely wonderful idea the US Forest Service had back in the 30s to make sure every forest fire was put out by 10am the following morning. Put out all the fires -> fuel buildup -> fires so large you can't put them out.

Climate change is a horrible thing, but blaming it for things it didn't cause is a fantastic way to validate right-wing fears. Not fears of climate change, but of irrelevant responses that give the government and their favored industries ever more power. These dangers might be massively overblown, but every time people do this it makes them a little more plausible, and a little easier to spread.


Ohhh, will Julia Roberts be in the movie adaptation of this latest PG&E debacle?[0] She was so good in the last one.

[0]https://en.wikipedia.org/wiki/Erin_Brockovich_(film)


A tweet from the real Erin Brockovich was the top Google Tweet result for [pg&e] this morning:

https://twitter.com/ErinBrockovich/status/108483037975907533...


One of the few times where Erin Brockovich 2: Electric Boogaloo would be entirely on-point.



Is municipal red tape at all a factor in PG&E's under-maintenance of its lines and equipment? I feel like CEQA lawsuits and municipal planning codes and committees are given as reasons why we don't have denser housing and more fiber-to-the-home and dedicated bus lanes in the bay area (the Van Ness CEQA report took something like six years to do). Do the engineers for AT&T and Comcast and PG&E find similar frustrations with the process here?


nice try -- cost-cutting by using sub-contractors to do legally mandated maintenance up and down northern California was well-documented. In addition, PG&E was found guilty of of obfuscating and avoiding legally required maintenance records for gas pipelines in the San Bruno case. Utterly unacceptable and sadly predictable.


"cost-cutting by using sub-contractors to do legally mandated maintenance up and down northern California was well-documented."

Contractors are licensed by the state to operate in their respective trade. Making the claim that contractors do sub par work is just as much an indictment of the state for licensing them in the first place.


Consider the following:

"PG&E didn’t anticipate how quickly the drought would overtake heavily wooded areas north of San Francisco and outside Sacramento, said Stephen Tankersley, who oversaw PG&E’s vegetation-management program between 1999 and 2015. “It’s hard to believe that anybody would have predicted that it would have been like this,” said Mr. Tankersley, now a utilities consultant. “I’ve never seen anything like it.”

Conditions on the ground worsened dramatically and quickly, said PG&E spokeswoman Lynsey Paulo. She said the utility has reacted with speed and urgency. “We are very aware of the risk and we are doing everything we can to keep our customers and the communities we serve safe,” she said. “PG&E considers wildfire risk as a top-tier enterprise risk. It is evident in our actions.”

The utility removed 451,000 more trees from 2016 through 2018 than it had originally forecast, she said, in an “amped up” effort to deal with massive tree mortality."

...

"The task was complicated because some dangerous trees were on private land, forcing PG&E to negotiate with landowners, said Bob Fratini, a retired PG&E vegetation-management manager. Residents sometimes pressured crews, he said, to trim just enough to satisfy minimum requirements.

“Utilities should be given the right to remove any tree that could cause an outage or a fire,” he said. California regulators recently gave utilities more latitude in this area, saying they could shut off power to homes or businesses that prevent tree crews from working. PG&E’s Ms. Paulo said that isn’t necessary very often.

Sometimes, PG&E’s tree-clearing created new problems. After PG&E workers removed two trees in January 2015 southeast of Sacramento, a gray pine was exposed to wind and began leaning, according to a state investigation.

On a 102-degree day in September, the pine hit a 12,000-volt line and electricity ignited it, dropping embers onto dry grass and sparking the Butte Fire, which burned 70,868 acres and 921 buildings. Two people died."

These two blocks of text to me make it sound more like what you'd traditionally call an 'act of god', and not malfeasance (unlike San Bruno). While its unfortunate people died, and that there were great losses, you when you have people living in land that historically (over tens of thousands of years) had regular burn cycles, then humans came along and kept putting the fires out, I have less sympathy for those who take a loss - they should have known it was a risk of living there.

Also, I work with power utilities, having to turn the power off in a windy situation is an unwinnable situation, you either get complaints to the PUC, or you get higher fire risk - both are expensive to an extent to deal with - and without a historical record of fires in that area, its not really rational to just turn the power off, to tens of thousands of customers, and its harder to justify to your customers on its face - just as they are being excoriated now a failure to exert enough caution, if they had exerted the caution and nothing had happened, they would have been excoriated for exerting too much caution, again - its an unwinnable situation.


>its an unwinnable situation

It becomes a bit of "boy who cried wolf" situation. In the mid-west/Tornado alley, a similar situation occurs. Weather forecast tech has become reliable enough to detect tornado conditions, and issue warning appropriately. However, these conditions do not always lead to fully developed tornadoes even though the warnings have already gone out. This leads to a lot of people ignoring the warnings and even getting annoyed at the interruptions to regularly scheduled programming.


Why is something as vital as ENERGY managed by a private company with profit motives?

Not trying to be NATIONALIZE EVERYTHING or whatever, but we decided its worthwhile for water... why not power?


Energy used to be fully regulated for a long time. All in all, they did a good job while getting a guaranteed return. Deregulation didn't really deregulate everything (the industry is still super regulated), but it brought in competition and more market based mechanisms. Stoft's power system economics textbook covers this subject pretty well. Deregulation helps incentivize innovation, but it isn't a slam dunk. We have a different system now that is definitely better in some ways and worse off in others. I doubt wildfire safety would have been radically different prior to deregulation.


Ok, let's turn this situation around.

The most dangerous fires occur at the Urban Wildland Interface(UWI). Instead of spending countless billions in an attempt to reduce the likelihood of a power line fire, in a place that historically has fires, we nationalize not building houses there?

The number of wildland fires will increase.

The number of people living in the UWI will increase.

The number of people losing all their shit in wildland fires, therefore, will increase.

It seems like subsiding this bad behavior is the first thing to stop.


And that whole water thing always works out flawlessly, too?


I wonder if the cost of providing energy with so much liability will force California to solar e.g. individual homes and businesses providing their own power?


That's actually part of the problem. Profits have been going down for years because their most profitable consumers (rich people with big houses) have been going solar. They don't adequately separate the cost of infrastructure from the cost of energy, so they've had less for infra.

Also we just passed a law to make this even worse by requiring solar on new homes.


$10,000 bet not a single Exec will go to jail.


Every year, they cause a fire or other natural disaster, then threaten bankruptcy, then get bailed out.


Capitalism for the poor. Socialism for the rich.

If they continue to get bailed out I would prefer that we just have state run power or something more heavily regulated and monitored.


Socialize the losses and privatize the gains, but only for those who are wealthy and in power. That is our current system in America, too big to fail.


On a somewhat similar note, president Trump recently threatened to cut off funding for wildfires[0].

[0] https://www.cnbc.com/2019/01/09/trump-threatens-to-cut-off-f...


I think this is great news. Why would we want to give money to wildfires?

They're pretty destructive, causing millions (billions?) of dollars in damage and killing innocent civilians. I do not think we should be giving money to wildfires. They can't even use the money anyway.


They'd burn right through it anyway.


What would the burn rate be compared to other start ups, and how much runway would they be given before they pull the plug?


How many times does California need help until it, as its own entity, fixes the problem?

Hopefully this lights a fire under the regulators in Sacramento.


How many times would Florida, Louisiana, etc need help until they fix the hurricane problem? There's definitely situations that people create that makes them much more susceptible to natural disasters, and I would go along with the "fix the problem" approach if this is the point you are making.


Obviously they just need to establish a hurricane fighter force. I wonder why nobody has ever considered this before /s


The irony of course is that the fire that caused him to say that was on federal land. I.e. he is the leader of the organization that is responsible for preventing fires on that land.


How are Californians going to be better off? When they go out of business, some other entity will pick up the equipment and staff.

Probably a lot of institutional memory will carry over.


Bankruptcy doesn't necessarily mean they "go out of business".

Someone will keep electricity flowing in northern California...


They don't murder the employees when the company goes bankrupt, you know.


Which is the whole point of my remark.

Why do people think it's going to help them to have essentially the same co running their power again?


Well, for one, they can maybe be hopeful that money set aside for keeping down the fire risk by trimming trees near power lines/stations wouldn't be diverted to executive bonuses, as PG&E did.




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