Gov Signs Bill To Raise $21B For Power Companies, Malibu Senator Worries Gas Company Will Cause Electricity Shortage
Written by 991KBU on July 12, 2019
LATE UPDATE: The governor signed this bill at 11:15 this morning.
The California legislature has passed a bill to spend 10 and a half billion dollars in-state money to make Wall Street happy.
The money is designated for Southern California Edison and two other electric utilities to tap … if and when I another disastrous fire like paradise or Malibu caused more billions of dollars in damage claims.
What does it mean for Malibu ratepayers???
Short term … not much.
But Long-term … pretty much guarantees that ratepayers will subsidize enormous cost of writing electricity to high fire risk areas.
One in four Californians live in a high fire risk area.
The governor is expected to sign the bill today.
California’s three large shareholder-owned companies that provide electricity we’ll have to come up with 10 1/2 and a half billion dollars from their profits for this insurance fund.
Ratepayers will put up a matching 10 and one half billion dollars.
This is supposed to stave off threats from Wall Street to downgrade the utility companies borrowing ratings.
The governor argues that this expensive bill will ultimately cost customers less than inaction would.
State leaders worry that Southern California Edison might follow Pacific Gas & Electric Co. into bankruptcy if the liability law remained unchanged … if the power company credit rating was downgraded and a major wildfire broke out in its territory this year.
If those three things happened … Malibu fire victims would have a very difficult time collecting damage expenses from a bankrupt Southern California Edison.
The governor said yesterday “it’s either ratepayers, taxpayers, shareholders or victims” who have to come up with the money.
“What a bill like this does is buys a little time” … the governor said yesterday.
Edison will have to pay nearly one-third of the 10 billion dolalrs … and woudl have to adopt rules that tie executive pay to being able to prevent fires.
Those guys want to get their bonuses … and that explains why Southern California Edison helicopters are hovering over Malibu on weekends … looking for weak spots in the power grid.
Malibu state senator Henry Stern is accusing Southern California Gas of deliberately delaying repairs on a key natrual gas pipeline … potentially causing a major energy crisis and price hikes this summer.
The L A Tiems reports that the Gas Company may have delayed repairing the pipeline … out in the desert near Barstow … after it blew up 2 years ago.
The pipeline brings natural gas into California from teh Four Corners region … and that natural gas is used to generate electricity…. among other things.
A shortage of natural gas drives its cost up … benefitting Sempra … the big energy company that owns a natural gas import terminal that brings in liquified natural gas for the California market by ship.
Sempra owns Southern California Gas.
State Sen. Henry Stern says the Gas Company sat in the repairs for months.
At a hearing last winter … Stern said he has “significant concerns about whether or not the delays in that project repair were willful or not …, and the cost to Southern California ratepayers from that delay.”
The LA Times reports that Stern and other skeptics have wondered whether SoCalGas is purposefully slow-walking the pipeline repairs.