Sorry, PG&E, but sorry is not enough

Update, December 4, 2019: A New York Times story largely confirms the damning indictment of Pacific Gas and Electric here but also raises questions about the efficacy of regulatory supervision:[1]

The report has also raised fresh questions about why the utilities commission did not identify PG&E’s safety lapses in previous investigations and audits of the company. The report did not address that issue but implied that the problems could have been discovered years earlier. It said that “long-duration exposure to higher winds, age and historical inspection methodologies likely all contributed” to the equipment failures that caused the fire.[2]

Primary responsibility remains, of course, with the utility. But the deficiencies in oversight hint at regulatory capture, in which regulators become too friendly with and even defenders of the subjects of their regulation. Typically, such capture is at least partially the result of corruption (as with the Deepwater Horizon catastrophe); however, an anti-regulatory ideology (as under the Trump administration) can also be to blame. This hazard is inherent to regulated capitalism, implicitly raises the question of who will watch the watchers, and thus how they, in turn, will avoid capture.

The point here ultimately remains the same: Capitalism is an inherently untrustworthy system.


I understand the capitalist libertarian impulse that insists that government is inherently incompetent and a burden, both in regulation and in taxation.

This impulse is what capitalist libertarianism bequeathed to neoliberalism, which is what happened when capitalist libertarianism came to power in the post-Watergate era and all but shed its already ludicrous claim to anarchist ideals, in which only political, but never economic, power is problematic in an allegedly “free” (for whom? to do what? to whom?) market.

As government was seen to be inherently wasteful, it burdened even itself with even more onerous regulations, hence a part of my experience with the U.S. Census Bureau last year, in which even the act of being hired for a low-level position entailed a mountain of paperwork and training that emphasized stewardship of taxpayer money, assessed strictly on quantitative measures and to such a degree that we were to feel guilty for the costs we imposed on taxpayers even as we were calling on them to fulfill their alleged duties as citizens (or even residents) to participate in survey research.

For capitalist libertarians and even neoliberals, the example of Pacific Gas and Electric (PG&E) in California will serve as no counter-example. In their light, the public utility which was found feloniously negligent in a San Bruno gas line explosion that cost lives and property and remains under federal court-supervised probation[3] is an example of government interference in action, with a monopoly and even its profits assured through regulation.

California has now found that PG&E failed to conduct inspections of aging towers that even the utility itself had found to be necessary but simply declined to do, resulting in the Camp Fire last year[4] that devastated Paradise and submerged even much of the San Francisco Bay Area, over a hundred miles away, with choking smoke so thick that visibility was reduced to a few hundred yards.

PG&E is, of course, apologetic and reaffirms its commitment to safety.[5] But even its immediate response, imposing draconian power outages of large swathes of California when fire conditions seem ripe,[6] was insufficient to prevent the Kincade Fire this year, which began when an allegedly well-maintained transmission line tower broke.[7]

An immediate question for Californians is whether it would be criminally negligent to continue to allow this convicted felon, PG&E, to operate when even federal court-supervised probation has failed to remedy its safety lapses. I think the answer to this question is an obvious yes: Even given a fully-reformed and fully-redeemed corporation, which PG&E seems unlikely to be, the risk to Californians is too great.

The problem of a public utility is that competition would, in the example of a power distribution, require players to each string their own power lines. Eyesores would multiply. And the risk of fire we see now with a single utility would also multiply. This is manifestly inefficient and even as neoliberals have sought to impose competition in this industry, they have left final transmission and delivery to single suppliers: PG&E in much of California north of the Tehachapis, Duquesne Light where I live now.

The allegation against government is that it is uniquely inefficient and wasteful. The argument for private enterprise is that the profit motive drives efficiency and therefore nimbleness. And this, in essence, is the argument that Californians will hear in response to calls for a state takeover of PG&E or even municipal takeovers of PG&E facilities,[8] even as competition is all but absent.

The underlying question is whether capitalism can offer a solution, when by its very design, capitalists seek to externalize costs wherever possible. Hence, most obviously in the moment, the costs of lost lives and properties that PG&E has yet to be found liable for and that are, for the moment, being borne by victims.

The profit motive promises “efficiency” but on what criteria? In a public utility, all the incentives are for rent-seeking. Safety can only be a secondary goal, sought for fear of being held liable or to avoid further regulation and punishment. What we see is that, in this sense, PG&E—or any capitalist enterprise—is irredeemable and that a secondary priority is not sufficient to protect Californians.

  1. [1]Ivan Penn and Peter Eavis, “Report Detailing PG&E’s Failures Raises New Hurdles for Utility,” New York Times, December 3, 2019, https://www.nytimes.com/2019/12/03/business/energy-environment/pge-camp-fire-report.html
  2. [2]Ivan Penn and Peter Eavis, “Report Detailing PG&E’s Failures Raises New Hurdles for Utility,” New York Times, December 3, 2019, https://www.nytimes.com/2019/12/03/business/energy-environment/pge-camp-fire-report.html
  3. [3]Jarod Cassidy, “PG&E Guilty of 6 Felony Charges in San Bruno Pipeline Explosion,” Thomas J. Henry, October 5, 2017, https://thomasjhenrylaw.com/blog/premises-liability/pge-guilty-6-felony-charges-san-bruno-pipeline-explosion/; Richard Gonzales, “Federal Judge Imposes New Probation Terms On PG&E To Reduce Wildfire Risk,” National Public Radio, April 2, 2019, https://www.npr.org/2019/04/02/709248544/federal-judge-imposes-new-probation-terms-on-pg-e-to-reduce-wildfire-risk; Lyanne Melendez and Katie Marzullo, “Federal jury finds PG&E guilty of obstructing investigators,” KGO, August 10, 2016, https://abc7news.com/news/federal-jury-finds-pg-e-guilty-of-obstructing-investigators/1463352/
  4. [4]Katherine Blunt and Russell Gold, “PG&E Knew for Years Its Lines Could Spark Wildfires, and Didn’t Fix Them,” Wall Street Journal, July 10, 2019, https://www.wsj.com/articles/pg-e-knew-for-years-its-lines-could-spark-wildfires-and-didnt-fix-them-11562768885; Russell Gold and Katherine Blunt, “PG&E Had Systemic Problems With Power Line Maintenance, California Probe Finds,” Wall Street Journal, December 2, 2019, https://www.wsj.com/articles/pg-e-had-systemic-problems-with-power-line-maintenance-california-probe-finds-11575338873; Kanishka Singh, “PG&E failed to inspect transmission lines that caused deadly 2018 wilfdfire [sic]: state probe,” Reuters, December 3, 2019, https://www.reuters.com/article/us-california-wildfire-pg-e-us-idUSKBN1Y70N8
  5. [5]Russell Gold and Katherine Blunt, “PG&E Had Systemic Problems With Power Line Maintenance, California Probe Finds,” Wall Street Journal, December 2, 2019, https://www.wsj.com/articles/pg-e-had-systemic-problems-with-power-line-maintenance-california-probe-finds-11575338873; Kanishka Singh, “PG&E failed to inspect transmission lines that caused deadly 2018 wilfdfire [sic]: state probe,” Reuters, December 3, 2019, https://www.reuters.com/article/us-california-wildfire-pg-e-us-idUSKBN1Y70N8
  6. [6]Dale Kasler, “PG&E expands blackouts as fierce winds approach: 940,000 to lose power in California,” Sacramento Bee, October 26, 2019, https://www.sacbee.com/news/california/fires/article236691183.html; Dale Kasler, “Can wildfire risk worsen? Northern California eyes more winds, another PG&E outage,” Sacramento Bee, October 28, 2019, https://www.sacbee.com/news/california/fires/article236718203.html; J. D. Morris, “‘Unacceptable’: State orders PG&E to reform outage program,” San Francisco Chronicle, October 14, 2019, https://www.sfchronicle.com/bayarea/article/Newsom-PG-E-should-give-100-to-every-14521218.php
  7. [7]Nathan Heller, “San Francisco’s Fire Season,” New Yorker, October 30, 2019, https://www.newyorker.com/news/california-chronicles/san-franciscos-fire-season; Nico Savidge, Annie Sciacca, and Casey Tolan, “‘I don’t want to do this again’: Blackouts and wildfires put Sonoma County on edge,” San Jose Mercury-News, October 26, 2019, https://www.mercurynews.com/2019/10/26/i-dont-want-to-do-this-again-blackouts-and-fires-make-sonoma-county-residents-question-their-home/; Reis Thebault, Kim Bellware, and Andrew Freedman, “High-voltage power line broke near origin of massive California fire that forced thousands of evacuations,” Washington Post, October 25, 2019, https://www.washingtonpost.com/nation/2019/10/24/fast-moving-wildfire-ignites-northern-california-wine-country-prompting-evacuations/
  8. [8]Katherine Blunt, “San Francisco Offers to Buy PG&E Wires in City,” Wall Street Journal, September 8, 2019, https://www.wsj.com/articles/san-francisco-offers-to-buy-pg-e-wires-in-city-11567960938; Katherine Blunt and Alejandro Lazo, “California Governor Threatens State Takeover of PG&E,” Wall Street Journal, November 1, 2019, https://www.wsj.com/articles/california-governor-threatens-state-takeover-of-pg-e-11572641749; Mary Fricker, “Exploring options for PG&E’s future,” Sonoma West Times and News, November 20, 2019, http://www.sonomawest.com/sonoma_west_times_and_news/news/exploring-options-for-pg-e-s-future/article_cdccdf26-0bc2-11ea-a06f-1bf6a8868cad.html; Rebecca Smith, “California Mayors Join Campaign to Buy Out PG&E,” Wall Street Journal, November 5, 2019, https://www.wsj.com/articles/california-mayors-join-campaign-to-make-pg-e-a-cooperative-11572955201

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