Tuesday, January 27, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS



Customers pay tab for utility negligence

elias column sig

By
From page A11 | February 27, 2013 |

When an automaker is caught placing flawed parts in some of the models it builds, a recall ensues, with the car company often paying hundreds of millions of dollars to replace fuel injection systems, floor mats or whatever was wrong.

Of course, there is plenty of competition in the car business, as relative newcomers like Hyundai, Kia, Tesla and others rise up continually to challenge the existing giants, forcing them to keep prices within reach and to respond when they’ve done something wrong.

Utility companies in California are not like that. They are monopolies. If you live in Pacific Gas & Electric Co. territory, you buy power from it or you install expensive solar panels on your roof. There’s no other company equipped to deliver electricity to very many homes or businesses.

The only thing forcing the big utilities to keep rates reasonably affordable is the state Public Utilities Commission, whose mission is to prevent consumer rip-offs, with a secondary purpose of making sure companies like PG&E, Southern California Edison Co., Southern California Gas and San Diego Gas & Electric remain financially strong.

How the PUC lives up to its vital mission depends on who peoples the five-person commission, where members serve five-year terms. They are appointed by the governor and almost impossible to remove once in office. For most of the past half-century, they’ve almost always given more emphasis to the need for keeping utilities profitable than their central purpose of preventing utilities from ripping off the captive-audience customers.

The latest example came with little fanfare this winter, when commissioners voted to assess PG&E’s customers two-thirds of the estimated $2.2 billion it will cost to upgrade that company’s admittedly decrepit gas pipeline system. Federal authorities found PG&E flat-out negligent while investigating the 2010 pipeline blast that killed eight people and destroyed 38 homes in San Bruno.

Inspectors essentially determined that California is lucky similar explosions have not become commonplace. That’s because it’s not just PG&E with pipeline troubles, but also SoCal Gas and SDG&E, both owned by San Diego-based Sempra Energy.

If commissioners act as they usually do, the PG&E decision will set the pattern for repairs by those companies, expected to cost SoCal Gas about $2.6 billion and run to about $600 million for SDG&E.

Dunning the customers for two-thirds is, of course, touted by the commission as a compromise. But it’s really the result of a kabuki dance the PUC and the utilities have performed for decades. Each time a utility applies for a rate increase, it gets one that’s about 25 percent to 30 percent less than what’s requested. So the utilities invariably ask for higher rates than they know they need or can get, generally ending up with less than they ask for but more than what’s required for them to be profitable.

The process is a predictable joke for all involved, even if all parties maintain straight faces through all their convoluted hearings.

So it was, too, with the PG&E pipeline expense. The company at first asked the commission to force its customers to pay 90 percent of the repair costs, then reduced its request to a mere 84 percent.

Of course, for consumers to shoulder much of the cost is rank injustice. Gas customers have already paid more than $1 billion over the past few decades via monthly billing assessments to assure safety and reliability of pipelines.

That didn’t matter much in the eventual PUC decision. So customers are paying about 88 cents more per month this year and will pay $1.36 more each month starting in 2014 until the work on more than 900 miles of pipeline is complete.

Customers in Southern California can expect the same sort of increases soon.

All this will also guarantee about $400 million in additional profits to the companies each year until 2033. That’s because utility profits are based in part on a “reasonable rate of return” on their capital investments, now set at about 11.35 percent. In a spiraling process, customers will pay higher rates for years to come because the utilities are allowed to charge them for repairs caused by the companies’ negligence – and their failure to properly use the maintenance money consumers have long been paying.

If all this seems unjust beyond the level of absurdity, it is. Consumers will just have to pay the higher rates, because there’s now no apparent way to stop it.

Thomas Elias is a California author. Reach him at tdelias@aol.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
Health officials report 1st Solano flu death

By Kevin W. Green | From Page: A1 | Gallery

 
Fairfield man who says he accidentally kicked woman, faces charges

By Ryan McCarthy | From Page: A5 | Gallery

 
 
American Legion Post schedules head-shaving fundraiser

By Kevin W. Green | From Page: A6

Rush Ranch seeks docents

By Kevin W. Green | From Page: A2

 
Dramas, thrillers lead week’s box office openings

By Amy Maginnis-Honey | From Page: B6

Vacaville Toastmasters welcome guests

By Amy Maginnis-Honey | From Page: A6

 
Kroc Health Fair offers free screenings

By Amy Maginnis-Honey | From Page: A1

 
Chipotle fundraiser to benefit Armijo newspaper

By Amy Maginnis-Honey | From Page: A6

Vacaville council eyes earlier start time

By Ryan McCarthy | From Page:

 
.

US / World

Facebook suffers outage affecting users worldwide

By The Associated Press | From Page:

 
Private wells in California farm area show high uranium

By The Associated Press | From Page: B2

Budget for Koch-backed network: almost $1 billion for 2016

By The Associated Press | From Page: B2

 
Ex-Army prosecutor found guilty of rape at court-martial

By The Associated Press | From Page: B2

California may dam 3 Delta channels, if drought persists

By The Associated Press | From Page: B2

 
Law enforcement wants popular police-tracking app disabled

By The Associated Press | From Page: B2

Gov’t to overhaul Medicare payments to doctors, hospitals

By The Associated Press | From Page: B2

 
Cuban youth build secret computer network despite Wi-Fi ban

By The Associated Press | From Page: B2 | Gallery

Seekers of the Hollywood Sign disrupt nearby neighborhood

By The Associated Press | From Page: A2 | Gallery

 
2 small planes crash-land off Hawaii; all aboard survive

By The Associated Press | From Page: B2

Report: State worker sent alarming notes before gun arrest

By The Associated Press | From Page: B2 | Gallery

 
Panic attack, bad back: Theater shooting brings jury excuses

By The Associated Press | From Page: B2

Lawyer: Boy Scout files depict ‘sordid’ history of abuse

By The Associated Press | From Page: B2

 
Dwindling group of survivors to mark Auschwitz 70 years on

By The Associated Press | From Page: B2 | Gallery

New Jersey’s Christie launches political action committee

By The Associated Press | From Page: B2

 
US drone strikes resume in Yemen despite turmoil

By The Associated Press | From Page: B2

Monster snowstorm swirls into densely populated Northeast US

By The Associated Press | From Page: B2 | Gallery

 
Kurds celebrate ousting Islamic State fighters from Kobani

By The Associated Press | From Page: B2

Man takes responsibility for drone over White House

By The Associated Press | From Page: B2 | Gallery

 
.

Opinion

2 sides to state highways rehab backlog

By Dan Walters | From Page: A11

 
.

Living

Community Calendar: Jan. 27, 2015

By Susan Hiland | From Page: A2

 
.

Entertainment

Petty earns writing credit for Sam Smith’s ‘Stay With Me’

By The Associated Press | From Page: B3

 
National Cowboy Poetry Gathering begins in northeast Nevada

By The Associated Press | From Page: B3

Trainor and Styles write a duet about heartbreak

By The Associated Press | From Page: B3

 
Emma Watson to star in live-action ‘Beauty and the Beast’

By The Associated Press | From Page: B3

 
SAG Awards win sends ‘Birdman’ Oscar hopes soaring

By The Associated Press | From Page: B3

Cumberbatch says sorry for calling black actors ‘colored’

By The Associated Press | From Page: B3

 
A murder at the edge of the world takes ‘Fortitude’ to crack

By The Associated Press | From Page: B3 | Gallery

Lawyers: Melissa Rivers files lawsuit in mother Joan’s death

By The Associated Press | From Page: B3 | Gallery

 
Sundance Watch: ‘Cobain’ premieres, women talk Hollywood

By The Associated Press | From Page: B3

TVGrid Jan 27

By Daily Republic Syndicated Content | From Page: B7

 
.

Sports

Manfred knows he’ll get hit as commish _ his name is on ball

By The Associated Press | From Page: B1 | Gallery

 
NASCAR to leave championship format unchanged in 2015

By The Associated Press | From Page: B1

 
Kobe Bryant to have shoulder surgery, likely out for season

By The Associated Press | From Page: B1 | Gallery

Tim Brown hopes 6th time is charm in Hall of Fame vote

By The Associated Press | From Page: B1

 
Raiders sign Charles Woodson for 2015 season

By The Associated Press | From Page: B1

Rams notify St. Louis they’ll go year-to-year on dome lease

By The Associated Press | From Page: B1

 
Gamecocks still No. 1; Chattanooga joins women’s hoops poll

By The Associated Press | From Page: B1

Scott Dixon shines in masterful final drive in Rolex win

By The Associated Press | From Page: B1 | Gallery

 
LeBron, Cavs climb in standings, back in title conversation

By The Associated Press | From Page: B1

Capitals among East contenders; West race too tight to call

By The Associated Press | From Page: B1

 
Playoff not interested in moving semis of New Year’s Eve

By The Associated Press | From Page: B1

Fireworks help celebrate Venus Williams’ Australian Open run

By The Associated Press | From Page: B1

 
US women to host New Zealand, Ireland, Mexico, South Korea

By The Associated Press | From Page: B1

NBA D-League All-Star events set for Feb. 15 in Brooklyn

By The Associated Press | From Page: B1

 
AP Source: Los Angeles Kings release Mike Richards

By The Associated Press | From Page: B1

Hope Solo could be left off US World Cup roster

By The Associated Press | From Page: B1 | Gallery

 
.

Business

Employers: Agreement made on key issue in port labor dispute

By The Associated Press | From Page: B4

 
Lyft cars doing away with pink furry mustache

By The Associated Press | From Page: B4

California draws $3.2 billion in federal health subsidies

By The Associated Press | From Page: B4

 
Hard Rock (again) dips toe into Atlantic City casino market

By The Associated Press | From Page: B1

US stock market finishes with small gains

By The Associated Press | From Page: B4

 
IBM disputes report that big layoffs coming

By The Associated Press | From Page: B4

Union says California Kaiser nurses reach contract agreement

By The Associated Press | From Page: B4

 
Boeing, SpaceX will beat Russia on price for astronaut rides

By The Associated Press | From Page: B4 | Gallery

CBO: Deficit to shrink to lowest level of Obama presidency

By The Associated Press | From Page: B4

 
Eurozone looks for dialogue after stunning Greece elections

By The Associated Press | From Page: B4

S&P downgrades Russia credit rating to junk

By The Associated Press | From Page: B4

 
.

Obituaries

Donald Wesley Johnson

By Susan Hiland | From Page: A4

 
.

Comics

Rose is Rose Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy Jan 27

By Daily Republic Syndicated Content | From Page: B4

Beetle Bailey Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
B.C. Jan 27

By Daily Republic Syndicated Content | From Page: B4

Cryptoquote Jan 27

By Daily Republic Syndicated Content | From Page: B5

 
For Better or Worse Jan 27

By Daily Republic Syndicated Content | From Page: B4

Dilbert Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Bridge Jan 27

By Daily Republic Syndicated Content | From Page: B5

Garfield Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Crossword Jan 27

By Daily Republic Syndicated Content | From Page: B5

Baby Blues Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Pickles Jan 27

By Daily Republic Syndicated Content | From Page: B4

Sally Forth Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Baldo Jan 27

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Word Sleuth Jan 27

By Daily Republic Syndicated Content | From Page: B5

Frank and Ernest Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Sudoku Jan 27

By Daily Republic Syndicated Content | From Page: B5

Blondie Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Zits Jan 27

By Daily Republic Syndicated Content | From Page: B4

Peanuts Jan 27

By Daily Republic Syndicated Content | From Page: B4