22 Mayors Want PG&E To Become A Customer-Owned Co-Op

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Above photo: A PG&E contractor works on utility poles along Highway 128 near Geyserville on Oct. 31, 2019, as the Kincade Fire continued to burn nearby. Philip Pacheco/Getty Images

California – A coalition of public officials representing 5 million Californians — including 22 mayors — wants to see PG&E emerge from bankruptcy as a customer-owned cooperative. And they’re asking state regulators to help.

In a letter sent Tuesday to the California Public Utilities Commission (CPUC) and Gov. Gavin Newsom, the group of mayors and county supervisors argues that the two factions currently vying for control of the bankrupt utility are made up of “Wall Street titans” concerned only with “a short-term desire to maximize financial gain,” and that a co-op structure would go further toward making PG&E a financially stable company capable of addressing its operational challenges while also regaining the public trust.

View the letter here: mayor-letter-to-pg-e

The group, led by San Jose Mayor Sam Liccardo, wrote that Californians would be served better by a customer-owned utility that would not have to pay dividends to shareholders or federal taxes.

They noted the recent wildfires and power shutoffs that have plagued communities in PG&E’s massive service area.

“A cooperative financial structure will save ratepayers many billions of dollars in financing costs over this next decade,” the letter states. “A customer-owned PG&E will better focus its scarce dollars on long-neglected maintenance, repairs and capital upgrade, and mitigating some part of the substantial upward pressure on rates.”

While a federal bankruptcy judge will have the final say on PG&E’s future, the CPUC has a significant role to play.

The state regulatory body must vote to approve any final reorganization plan submitted in bankruptcy court, and the commission will also decide if PG&E is eligible for a new state-backed wildfire insurance fund seen as key to ensuring the utility’s future solvency.

In addition to Liccardo, the letter is signed by the mayors of several large cities, including Oakland Mayor Libby Schaaf, Sacramento Mayor Darrell Steinberg, Stockton Mayor Michael Tubbs and Santa Cruz Mayor Martine Watkins.

Additionally, the leaders of five county boards of supervisors — San Mateo, Santa Cruz, Marin, Yolo and San Benito counties — signed on.

The letter comes as PG&E executives and investors meet with Gov. Gavin Newsom Tuesday about the company’s future.

On Friday, Newsom said the state is taking an active role in the bankruptcy restructuring and warned California could take over the troubled utility if an acceptable resolution isn’t reached quickly.

  • GaryReber

    The approach should be to have the profits go to the customers served by the utility. All of the profits, called margins in the utility business, should stay with the customer based served by the utility.

    Using the structure of a non-profit cooperative, the managing board of directors would be elected by its base of ratepayers, who each would get one vote. That means each business and each home owner or renter would comprise the ratepayer base.

    The goal of a cooperative utility should be local, demo­cratic control over the crucial resource and infrastructure, keeping profits within the ratepayer base and pursuing greater energy independence and lower electrical costs (electricity rates).

    Utility cooperatives work. Today more than 900 electric cooperatives and public power districts provide electricity for 42 million people in 47 states, according to the National Rural Electric Cooperative Association.

    While rural utility cooperatives have access to low-cost government financing, in the case of the acquisition of PG&E government financing should be interest-free.

    As an alternative to non-profit Cooperative, Community Investment Corporations, Land Trusts, Land Banks, Land Foundations or any other legal vehicle in which ownership of land, natural resources and basic community infrastructure are owned collectively (i.e., where no one has a property stake) or by any state monopoly, California PG&E ratepayers could use a Citizen Land Bank (CLB).

    A Citizens Land Bank is a for-profit, professionally-managed, citizen-owned-and-governed community land planning and development enterprise, designed to enable every citizen of a community of any size, or in the case of a utility’s ratepayers, to acquire a direct ownership stake in local land, natural resources and basic infrastructure.

    A CLB is a social vehicle for every child, woman and man to gain, as a fundamental right of citizenship, a single lifetime, non-transferable ownership interest in all the CLB’s assets, share equally in property incomes from rentals and user fees from leases or use of the CLB’s assets, accumulate appreciated equity values from enhanced land values, and gain an owner’s voice in the governance of future land and infrastructure development.
    A CLB is an innovative legal and financing tool empowered to borrow on behalf of all citizen-shareholders and service the debt with pre-tax dollars to meet the land acquisition, capitalization and operational needs of the CLB. The CLB shelters from taxation the equity accumulations of citizen-shareholders and protects the outside assets of the citizens in the event of loan default or if the enterprise fails.

    A Citizen Land Bank is a social tool designed to encourage a just, free and non-monopolistic market economy. It applies the democratic principles of equal opportunity and equal access to the means to participate as an owner as well as a worker. It demonstrates that anything that can be owned by government can and should be owned, individually and jointly, by the citizens.

    The Citizen Land Bank is a major feature in a proposed national economic agenda known as Capital Homesteading for Every Citizen and embodied in the proposed Capital Homestead Act, which is designed to reform existing monetary, credit and tax barriers to provide every American an equal opportunity to share in the governing powers and profits from new entrepreneurial ventures, new technologies, new structures, and new rentable space built upon the land. Capital Homesteading offers a JUST Third WAY of reversing unsustainable federal deficits and debt, and revitalizing and growing the American free enterprise system in a sustainable and environmentally sound way.

  • chetdude

    Was there ever a corporation more deserving of Eminent Domain turning it into a publicly owned Co-op, taking it away from the murderers that own and run it than PG&E?

    I can’t think of one.