SAN FRANCISCO – Pacific Gas & Electric, the monopoly California utility with a long and sordid history of wasteful spending, fleecing ratepayers, hindering clean energy equity and rampant negligence that has destroyed homes and lives, desperately needs reform.
That’s the conclusion of a four-part investigative series, “Power and Profit: How PG&E Fails California Ratepayers and What To Do About It,” released today during a briefing by the Environmental Working Group, former California Public Utilities Commission, or CPUC, President Loretta Lynch and Bill Powers, a nationally recognized leader in energy and environmental engineering.
EWG’s comprehensive review of PG&E’s record is forward-looking, offering an achievable set of reforms and improvements the utility and CPUC should pursue. The changes could lower ratepayers’ bills, promote clean energy and help fight the climate crisis.
Grant Smith, EWG’s senior energy policy advisor and lead author of the investigation, said, “In our four-year survey of the national utility landscape, it is clear to us that the current utility business model has failed miserably to provide for a safe, affordable, clean and resilient power system. PG&E is an unequivocal poster child of that failure.”
“PG&E is crushing Californians in their wallets, it’s killing Californians in devastating wildfires that are the direct result of its misguided energy planning, and it’s harming the planet by adding to the climate crisis with a rigid addiction to fossil fuels,” said EWG president, co-founder and longtime California resident Ken Cook.
“We hope this investigation will finally spur the state to rein in the out-of-control utility and force real reform within the company. Long-suffering Californians, desperate for relief from ever-increasing energy bills, thanks to PG&E, deserve no less,” said Cook.
“PG&E stands out among the nation’s utilities as the poster child for corruption, consistently finding ways to punish customers through higher and higher energy bills to pay for their costly and ill-conceived boondoggles,” said Loretta Lynch. “PG&E pursues any path it can that will boost profits for its shareholders and executives at the expense of its customers – and this report lays bare just how the company achieves those goals with the help of its captured regulators.”
Even during her tenure at the CPUC, Lynch was an early critic of California’s energy deregulation polices, which led to the Enron scandal. At the CPUC and after, she’s been a vocal advocate of protecting ratepayers and fighting corruption.
Bill Powers, who has spent decades advocating before the state’s regulators to reform the way PG&E and the other big investor-owned utilities in the state operate, slammed PG&E and the CPUC for the seemingly unending addiction to acquiring and spending customers’ money.
“The amount of money PG&E has spent, rubber-stamped by regulators, to build out unnecessary and dangerous infrastructure projects rivals the GDP of some European countries, including billions to bury power lines that have caused calamitous wildfires that have already cost ratepayers billions of dollars to rebuild their lives,” Powers said.
“Until fundamental reforms are either adopted by PG&E or forced on them by regulators, this behavior, which puts profits ahead of property and lives, will continue.”
EWG’s in-depth analysis documents PG&E’s long record of flawed energy investments, how it wields its monopoly control to boost profits on the backs of ratepayers, and its history of reaping billions in rate and taxpayer bailouts to recoup the costs of misguided power planning and wildfire destruction caused by that haphazard planning,
The costs of PG&E’s grid infrastructure, including transmission buildouts and wildfire mitigation efforts, are enormous and have only increased in recent years.
According to the CPUC, between 2018 and 2020, PG&E’s electricity distribution costs rose by roughly $3.5 billion, with the company estimating $4 billion annually through 2026. It will spend at least $25 billion in the coming years to bury 10,000 miles of power lines, all of which will be passed on its customers through steep rate hikes.
The report also details the utility’s efforts to eliminate residential solar, which is the greatest competitive threat facing PG&E, and its grip on electricity generation and distribution across its vast service area in Northern and Central California.
EWG recommends changes to how PG&E operates that could rein in the monopoly’s wasteful and unnecessary spending. The changes would put a stop to PG&E’s reckless decisions, which have contributed to some of the nation’s highest monthly electricity bills, and the outsize burden PG&E customers face from dangerous wildfires. They include:
- Imposing a more robust regulatory regime over infrastructure investment
- Prioritizing least-cost planning and a more resilient electric system by shifting investment to distributed resources, like solar and storage
- Providing solar and storage access to working-class customers and communities of color
- Preventing utilities from shifting stockholder risk and liabilities to ratepayers
- Creating much more transparency at the commission about utility planning and costs.
“At a time of soaring energy bills, fights over clean energy and budget uncertainties, we hope the analysis will help ignite debate over fundamental reforms of PG&E to reduce energy bills, boost clean energy and combat the climate emergency,” Smith said.
The Environmental Working Group is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.