PG&E by any other name: Golden State Power Light & Gas?

PG&E’s reputation has been so battered over its wildfire liabilities and other problems that some think it should change its name.

A group of bondholders trying to take over the utility company has proposed that they re-brand it to Golden State Power Light & Gas Co. They made the proposal during proceedings in PG&E’s bankruptcy court case earlier this year.

Patrick McCallum, who is co-chair of the wildfire victims’ group Up From The Ashes, said he made an off-the-cuff suggestion to the investors about a year ago that the utility company should start over.  “PG&E is too toxic,” he told them at the time.

The bankruptcy plan caps out its liabilities for the wildfires at $17.9 billion, far lower than the $30 billion previously estimated.

State fire investigators have found PG&E’s equipment responsible for several devastating fires in the state in 2017 and 2018, including the terrible Paradise fire in November which resulted in the deaths of 86 people.  McCallum said the company has a long history over 30 years of ignoring safety concerns. “This is the worst utility company in the country towards safety,” he said.

PG&E is unlikely to win over its critics with its filing this week of its Chapter 11 bankruptcy reorganization plan. The plan, filed in United States Bankruptcy Court, caps out its liabilities for the wildfires at $17.9 billion, far lower than the $30 billion previously estimated. Compensation for wildfire victims would be no more than $8.4 billion while no more than $8.5 billion would be allocated for insurers and $1 billion for local governments.

On Friday, PG&E announced that it reached an agreement to pay $11 billion to insurers who covered wildfire losses during 2017-18.

PG&E maintains it is committed to “fairly compensate” wildfire victims. “Throughout this process, we remain focused on the guiding principles of safely and reliably delivering energy to our customers, further reducing the risk of wildfires, and continuing to support the state’s clean energy goals,” Bill Johnson, PG&E Corp.’s chief executive officer and president, said in a written statement.

McCallum emphasizes that thousands of people and homes have been impacted by wildfires caused by PG&E’s negligence. “They are hurting, financially and emotionally,” he said. “Some incredibly desperate. There are victims in tents that go down to a creek to get water.”

But AB 235 recently died in the Legislature and won’t be taken up again for discussion until January.

The issue is personal to McCallum because he and his wife lost his Santa Rosa home in the 2017 Tubbs Fire. “It’s the most dramatic experience in either one of our lives that we have ever had,” he said.  PG&E is facing a state court case to determine if it is liable in that fire.

PG&E says the sale of Wildfire Victim Recovery Bonds is a critical piece of paying the victims of 2017 and 2018 wildfires as quickly as possible. James Noonan, a PG&E spokesman, said Assembly Bill 235, which would authorize the bonds, would ensure that the bonds were paid at shareholder expense without increasing customers’ bills.

A recent study by Sacramento-based Capitol Matrix Consulting said this proposal would restore PG&E to taxpayer status more quickly than other proposals.

The plan “has the distinct advantage of retaining PG&E ownership among traditional utility investors seeking stable earnings, long-term growth and dividend payments,” said the study. “This is in contrast to alternative plans involving massive sales through rights offering, which would effectively transfer company ownership almost exclusively to hedge funds and other investors seeking short-term profits, potentially to the detriment of the long-term viability of PG& E and its customers.”

TURN will always be concerned about PG&E being held accountable for its mistakes.

But AB 235 recently died in the Legislature and won’t be taken up again for discussion until January.

The Utility Reform Network, an advocate for ratepayers, opposes the bill because if PG&E shareholders default on the bond payments, the bondholders will not be at risk because ratepayers guarantee payment.  The organization says the only way for that not to happen is for the hedge funds who comprise the majority shareholders to put up their own assets as loan collateral instead.

Mindy Spatt, a spokesperson for TURN, said her organization has not taken an official position on the possible rebranding of the company to Golden State Power & Light Co.  But she said TURN will always be concerned about PG&E being held accountable for its mistakes.

“Changing the name won’t make any of that go away,” she said. “If they think customers will forget when their neighbors’ homes are burned or their neighbors are killed by PG&E’s negligence, that doesn’t seem possible.”