FOR IMMEDIATE RELEASE Feb. 3, 2020
In response to Sen. Scott Weiner’s proposed legislation regarding a state takeover of PG&E, IBEW 1245 Business Manager Tom Dalzell issued the following statement:
“IBEW Local 1245 remains firmly opposed to any proposed takeover of PG&E, as we believe it would be extraordinarily detrimental to both the utility’s dedicated workforce, as well as the millions of customers they serve.
“For the 25,000 PG&E employees – including approximately 12,500 members of IBEW 1245 — who have a secure pension in a private ERISA qualified plan, a public takeover means that they would lose their hard-earned retirement, as no mechanism exists under law to transfer or convert an ERISA pension fund into a multi-employer, publicly held pension fund. Additionally, there will be an untold number of jobs lost as the state and municipalities assume ownership of the PG&E system and seek to downsize or contract out what have historically been some of the highest-quality jobs in our state.
“The loss of this workforce would result in serious public safety concerns that should not be overlooked. In the event of a major emergency, PG&E is able to mobilize skilled and trained personnel from all across the system at a moment’s notice to make the area safe and restore gas and electric service as quickly as possible. With a state-run program and many smaller POUs, that ability to respond to emergency situations would be vastly diminished, leaving hazards unattended, customers in the dark, and first responders unable to perform their duties.
“The proposed phase-out of gas service also presents serious safety concerns. Not only would it lead to more job loss for our members, but any attempt to rush the process and dismantle the gas infrastructure too quickly could have devastating consequences. Additionally, it would result in huge rate increases to low-income customers at the end of the gas line who cannot afford electrification.
“Oversight and regulation are absolutely critical for any utility operation. But a public takeover is effectively another kind of deregulation — any new POU would not be regulated by the CPUC, allowing these new POUs to choose not to invest in grid safety and reliability. With large debt from acquisition costs, along with the loss of hundreds of $1.1 billion dollars in taxes and fees that PG&E currently pays to the state, cities and counties (in 2019, PG&E paid $388 million to cities and counties, and $742 million to the state), there is a strong incentive NOT to invest in the type of infrastructure upgrades that are critically necessary to protect against more devastating fires.
“Regardless of utility ownership, the likelihood of another fire will remain high for several more years, as the fire hazards in the electric system will still exist, and conservative estimates indicate that it will take at least five years to complete the work needed to harden the system against fires — and likely upwards of 10 years if a takeover occurs since the takeover would inevitably result in major delays to that essential work.
“And if publicly-owned utility equipment does start another fire, California taxpayers would be on the hook for potentially billions of dollars in wildfire liabilities, since all utilities, public and private, are subject to the state’s inverse condemnation law. For smaller, newly formed POUs that are unable to absorb costs from catastrophic events (or even modest-sized events), customers would have to pay the total amount of wildfire damages, or the city goes bankrupt. And a state takeover removes the utility from the AB 1054 Wildfire Insurance Fund (which applies only to electrical corporations) meaning future fire victims would lose access to that fund to cover their damages, even though customers have already paid the premiums.
“While we agree that changes to the utility are necessary, we do not believe that forcing taxpayers to foot the bill for a state takeover is the right way to effect this type of change. The cost of such an acquisition could easily reach $100 billion, as cities and counties would have to pay fair market value of distribution/transmission assets (not market capitalization, which is a lot less) – and all California taxpayers (not just current PG&E customers) would be on the hook for bonds issued by the state to pay for PG&E assets and property.
“A takeover would be extremely expensive and time-consuming, it would negatively impact workers and communities, and it would divert resources away from the infrastructure work that will protect against future fires. We strongly urge the legislature to reject the state takeover proposal.”