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Health & Fitness

Demonizing Corporate Entities…Is It the Right Thing to Do?

Is all the venom directed at PG&E deserved? Should the target of the wrath be defined differently?

Pacific Gas & Electric Company has been in the headlines a lot lately.  The only problem for the utility company is that all the news has been bad: the San Bruno pipeline explosion, the ill-fated effort to stifle Marin Clean Energy, public reaction to SmartMeters, and underground explosions in San Francisco. While it feels good to vent against this faceless corporate giant, you may be inflicting some collateral damage against innocent bystanders.

Elected officials have been quick to jump on the bandwagon condemning the company for its misdeeds.  I find it interesting that while many politicos questioned PG&E’s pipeline safety efforts after the explosion, I can’t find evidence of anyone doing so before the catastrophe.  One might say they are very good at locking the barn after the horse is out.  All this negative publicity reflects poorly on the company’s 20,000 employees, most of whom are working stiffs like us that have nothing to do with their employer’s offenses.

Another popular battle cry of elected officials is to levy heavy fines on the company for their transgressions.  While your gut reaction might be Yeah, nail those so and so’s!, fining a public utility is like shooting yourself in the foot for stepping in doggy-doo.  You and I end up footing the bill.  Even more illogical is their addendum to keep the cost of the fine out of the rates and sock it to the stockholders.  Oh, great!  Let yet another innocent group suffer the consequences!  PG&E stock is relatively thinly held by company executives, the presumed target of this codicil.  Much of PG&E stock is held by pension plans and mutual funds.  Yep, that includes some of those same pension plans that are already underwater.

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In no way am I saying that the problems connected to PG&E are to be dismissed or taken lightly.  Rather, the finger of blame needs to be more specifically directed at the wrongdoers.  Individual executives at PG&E were negligent in addressing their responsibilities or at the very least made some really dumb decisions.  While we cannot know who did what within PG&E, the California Public Utilities Commission should.  By their own admission, this public agency has roomsful of analysts, economists, engineers, administrative law judges, accountants, lawyers, safety and transportation specialists and other professionals. 

Perhaps some of the problem lies with the CPUC’s leadership: five very political appointees.  Three of the five have been appointed recently by Governor Brown.  Catherine Sandoval was an associate professor at Santa Clara University School of Law.  Mike Ferron was an executive with Deutsche Bank in London.  Mike Florio was an attorney with The Utility Reform Network (TURN).

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Timothy Simon was appointed by Governor Schwarzenegger and had previously served as the appointments secretary to Schwarzenegger. Michael Peevey, who serves as President, was appointed by Gray Davis. He had been President of Southern California Edison. 

How do we get the CPUC to do what is right and not what is politically expedient?

Disclosure – I own 350 shares of PG&E stock.

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