On July 1, the Golden State Energy Act, SB 350 (Hill) became law. This is known as “Plan B” and was pushed by many legislators to create a mechanism in which the State of California could step in and take over PG&E in case the Company failed to emerge from bankruptcy OR fails to operate its gas and electricity services in a safe and reliable manner in the future.
LET US BE CLEAR: IT IS LOCAL 1245’s MOST URGENT DESIRE THAT SB 350 NEVER TAKES EFFECT.
During the bankruptcy process, the Governor’s office and PG&E management agreed to several steps the utility would take to make its electric and gas service safer and make its infrastructure less likely to cause wildfires, including restructuring its business. This understanding is part of PG&E’s Plan of Reorganization recently approved by the Bankruptcy Court.
SB 350 is designed to maintain pressure on PG&E management to follow through on their commitments. Specifically, the bill empowers the State of California to establish a nonprofit public benefit corporation and a public financing authority to acquire Pacific Gas and Electric Company property through eminent domain. It allows Golden State Energy to issue bonds and other financial instruments to accomplish this goal.
Not surprisingly, this is a very complicated bill that could result in uncertainty for PG&E workers. Local 1245 weighed in heavily to insist PG&E employees would be protected, and that any future use of this bill would be only in extreme circumstances. The parts of SB 350 most important to Local 1245 members are future recognition of our labor agreements and benefits. Here is the relevant language:
“The acquisition of Pacific Gas and Electric Company by Golden State Energy, for any reason including pursuant to Section 713, shall not be subject to Sections 851 to 854, inclusive, if Golden State Energy, or its subsidiary, as part of such acquisition, agrees to do all of the following:
(a) Assume, take assignment of, and be bound by all collective bargaining agreements and related obligations, including pension and benefit agreements, then in effect that cover the business being acquired.
(b) Assume any obligations for funding under pension plans then in effect.”
This language explicitly states Golden State Energy must assume PG&E collective bargaining agreements and continue funding of the PG&E pension plan. Or that GSE must honor very similar utility worker protections already established in the Public Utilities Code Sections 851-854.
In addition, we remain concerned with people like State Senator Scott Weiner, who wants to take PG&E over for any reason at any cost. As a result, Local 1245 supported explicit language limiting when Golden State Energy can affect a takeover of PG&E. There are only two circumstances: first, if PG&E fails to emerge from Chapter 11 bankruptcy; and second, if the California Public Utilities Commission revokes PG&E’s right to serve its customers under the Certificate of Public Convenience and Necessity (CPCN).
The CPUC recently adopted a multi-step process to make the determination on how to revoke PG&E’s CPCN, so it is spelled out in regulation. Since the bankruptcy judge has already approved PG&E’s Plan of Reorganization and the Company is well on its way to raising necessary capital, the only way this law can be implemented is if PG&E fails to keep its CPCN. That is a process is established and controlled by the CPUC, not elected officials.
Local 1245 remains STRONGLY OPPOSED to the takeover of PG&E by the State of California or takeover of parts of PG&E by cities and counties. We continue to actively fight the efforts of San Francisco to take over PG&E electric infrastructure. And we hope never to have to discuss SB 350 again.
–Hunter Stern, IBEW 1245 Assistant Business Manager