You’re Fired!

 

“It’s socialism, pure and simple,” is the argument against having any business structures taken over by government. But is there a balance where direct and immediate public safety is concerned? Where it comes to utilities, often having de facto monopoly power, even under regulation of local municipal regulatory commissions? We’ve lived with this reality a long time.

“The idea that government and public agencies should own or closely regulate essential utilities is as old as the industrial revolution. American social reformers of the nineteenth century were particularly alarmed by the economic power of railroads and they fought for decades to bring them under public regulation.

“In the cities, key services such as water, gas, public transportation, electricity, and even telephone service were viewed as ‘natural monopolies,’ which is to say, as industries in which effective competition was nearly impossible. Believing that one company or cartel would ultimately dominate delivery of such vital services in any city, reformers argued that the public should take over the job or, minimally, license and control the private providers. This was the theory behind the municipal ownership movement of the late nineteenth and twentieth centuries.” History.org. But the effort against such “natural monopolies” addresses an economic fear. In today’s fire prone regions, public utilities under-managing their assets to increase profits – has become a safety concern.

In California, for example, open and exposed electrical powerlines frequently span large areas of brush and forest land, increasing a de facto volatile tinderbox as climate change amps up the heat and reduces precipitation. But putting those powerlines underground is expensive, so the relevant utility, a for-profit corporation, reacted to this drying out with a much cheaper alternative… or so it seemed: Pacific Gas & Electric began a policy of simply shutting off the powerlines entirely, during periods of intense risk (often high winds and expanding fire lines).

Katherine Blunt, writing for the August 8th Los Angeles Times, described the resulting chaos: “The company first deployed this strategy at scale in 2019 with a series of power outages that wreaked havoc on communities and the economy. The first blackouts began just after midnight on Oct. 9. The lights first went out in the North Bay and in the Sierra. The East and South Bay were next, and then parts of the Central Valley. By evening, more than 2 million people were in the dark.

“Within hours, Northern California had come to a near standstill. Hospitals in the East Bay rushed to move refrigerated medications to facilities with power. Nursing home residents were left in the dark. Businesses shuttered. As the outages persisted for days, economists estimated the losses were in the billions… ‘We simply could not continue running parts of this system given the risk to public safety,’ Bill Johnson, the chief executive of PG&E at the time, explained. ‘We must have zero risk of a spark.’ He had feared a replay of the catastrophes of two prior years. In 2017, the company’s power lines ignited more than a dozen fires in the wine country region that killed 22 people. In 2018, a power line broke in the wind, emitting sparks that ignited the Camp fire that killed 85 people, destroyed the town of Paradise and consumed more than 150,000 acres.”

PG&E was forced into bankruptcy after an investigation by state fire officials found that a faulty PG&E transmission line sparked the 2019 Kincade fire (pictured above), which exploded through Northern California wine country. “And the blackouts weren’t over yet. They would continue through the weeks ahead, with millions losing power that month.

“PG&E’s blackout strategy was driven by its fear of causing more destruction, as well as its need to get out of bankruptcy court. It could barely handle $30 billion in liability costs that it was already facing. Shutting off the power was an existential decision for both the company and its customers… It was a dark dilemma. PG&E could no longer provide safe and reliable service when the Diablo winds blew in Northern California. That was supposed to be the central objective for every utility. For PG&E, it had become an either-or proposition.

“Even before the blackouts, [California Governor Gavin] Newsom’s team had contemplated what it would take for the state to take ownership of PG&E. Across the state, residents were hoping for dramatic transformation of the company… ‘PG&E as we know it may or may not be able to figure this out, and if they cannot, we are not going to sit around and be passive,’ Newsom said. ‘The state will prepare itself as backup for a scenario where we do that job for them.’… All across Northern California, the leaders of the cities and towns that had gone for days without power were ruminating on whether their locales could somehow break free of the giant utility.” Blunt.

This wouldn’t be the first time that safety pushed state ownership of public utilities. It began a long time ago: “One month before [a] state constitutional convention met, Seattle had a disastrous experience with a private utility. The city's water was developed and owned by private investors, beginning with Henry Yesler (1810-1892). It flunked its severest test on June 6, 1889, when a small fire in a cabinet shop near 1st Avenue and Madison Street raced out of control and engulfed the entire business district. The water system could not provide firefighters with water and volunteers had to pump it from Elliott Bay in a losing battle with the flames.

“It took exactly one month (on July 8, 1889) for voters to approve bonds to buy and operate the city's private water utilities. This was the beginning of the Seattle Water Department, now part of the Seattle Public Utilities Department. Under the leadership of progressive leaders and engineers such as George Cotterill (1865-1958) and Reginald H. Thomson (1856-1949), Seattle went on to acquire the Cedar River Watershed (during the 1890s) and built a modern water system that still supplies most of King County.” History.org. We are nation that increasingly tends to govern by label. Call something “socialist,” regardless of the context, and it’s “left-wing bad.” Climate change regulation falls within that labeling habit as well, even as society is sucking up trillions of dollars of rising damages, as people are dying or facing a material diminution of the quality of life.

I’m Peter Dekom, and I wonder whatever happened to American ingenuity and care of its lands… the can-do attitude that provided both opportunity and solutions that actually did make America great.