State (of California): Fining PG&E 'does not make sense'

[Newsjock]

Source: San Francisco Chronicle

Pacific Gas and Electric Co. shareholders should pay $2.25 billion to fix the company's gas pipelines in the wake of the 2010 explosion in San Bruno, but fining the utility for the dozens of regulatory violations it allegedly committed over decades "does not make sense," a state regulatory agency said Monday.

"I am recommending the highest penalty possible against PG&E without compromising safety, and I want every penny of it to go toward making PG&E's system safer," said Jack Hagan, head of the consumer protection and safety division of the California Public Utilities Commission.

He said the $2.25 billion - a sum an independent consultant told regulators that PG&E could safely absorb and remain viable - should come from company shareholders, not its customers.

... In contrast, San Bruno officials asked Monday that PG&E be fined $1.25 billion on top of $1 billion to improve its system. Mayor Jim Ruane said such a fine would show that the utilities commission can be a "tough regulator" and hold PG&E accountable for "gross mismanagement."

Read more: http://www.sfgate.com/bayarea/article/State-Fining-PG-amp-E-does-not-make-sense-4492767.php

[NYC_SKP]

1. Correct. It doesn't make sense. The utility should spend ALL such funds for system improvements.

Not fines.

Fines punish nobody but the ratepayers.

If there was criminal negligence, then prove it and fine responsible individuals.

[cstanleytech]

4. No, they should be forced to pay the fine just dont let them raise rates to pay for it is all. nt

[NYC_SKP]

7. That cannot be done.

Unless you want to create a whole shitstorm of work for lawyers and agencies like CARB, CPUC, and others.

Plus, it's stupid. It could end in bankruptcy and problems for customers, probably higher rates and worse service, and nothing will have been made better.

Nope.

Identify a fine, if you like, but rather than collect it to spend on whatever, make it go toward fixing the problems.

That is the obviously better way to go about this.

[cstanleytech]

8. So, this is another to big to fail? nt

[NYC_SKP]

9. No. It's a Gordion Knot of regulatory and bureaucratic entanglement.

Quite different from the too-big-to-fail meme.

Why NOT just force them to fix the shit?

Why do you want the utility investors to suffer while nothing gets done????

FIX IT.

Problem solved.

If there was negligence, identify the individuals. Same with big banks, punish the people who are to blame.

[cstanleytech]

10. How about a compromise then? Fine them still

but require that it come from the profits and until its paid off no raises will be granted to any executives nor will the shareholders be granted any dividends payments until its paid?

[NYC_SKP]

11. This is a better approach. (nt)

[cosmicone]

12. It will still hurt a lot of retirees and families

A lot of people invest in utilities because they are safer and pay dividends.

[cstanleytech]

13. I doubt it will impact many if any.

Few after all are foolish enough to rely solely on the earnings from a single stock in their retirement and if they do then they are doubly foolish because if the company they relied on went bankrupt their retirement would be totally gone.

[SharonAnn]

18. THey USEDTO BE safe and paid dividends. Not anymore. Privatizing ruined that.

[HooptieWagon]

16. Jail for CEO, BoD, etc in lieu of fine would be OK.

Jail time for corporate criminals will straighten their asses up real quick.

[tularetom]

2. Doesn't the CPUC rule on rate requests by utilities like PG&E?

So it seems to me that they have control over where the money comes from to pay the fines. All they have to do is fine the living shit out of them and then simply deny any rate increases that PG&E asks for.

This is just political double talk by regulators who really don't want to regulate. Maybe it's time for some major housecleaning on the commission.

[freethought]

3. Let's talk about a simple reality.

Often times if you want to keep a corporation's behavior in check the threat of some kind draconian surrender of assets is the only thing that keeps them in line. Sometimes the threat of a massive fine or being caught up in some kind of expensive legal situation is the only deterent.

[adieu]

5. Rather than fining the utility

how about arresting and convicting the people involved, say, everyone at director level and above.

[HooptieWagon]

17. +100.

This shit happens because the corporate criminals get to walk away with a golden parachute, and get hired by another company. Start jailing their asses, take away their bonuses and golden parachutes...they'll get the message we mean business.

[freshwest]

6. Get the job done, make them fix the mess. The shareholders made money off of mismanagement, even if

they claim that they weren't informed.

This is why I want all utilities in the public realm for the public good. We can't afford all these middle men obscuring the big picture.

The rate payers should be the owners of the utility, they are paying for everything in the long run. This is how my city is.

I applaud the decision to not make rate payers pay for this, as they did their part and didn't profit by mismanagement, nor did they advocate for cutting corners and harming the public.

If it will not be made a public utility with rate payer oversight, those who profited should pay the price. Good move on the part of the commission.

[OnyxCollie]

14. Sure, let PG&E spend its money to fix the lines.

Slap a Band-Aid on and pocket the rest.

[msongs]

15. Jail Time makes sense for "dozens of regulatory violations" - seems to be a pattern nt