Thurs. 7/11: Urgent! – Wall St. made a killing on the housing crash with our money. They can hardly wait for us to pass AB-1054. It’s time for us to win.

“It’s a massive hijacking of the state of California.”  

– Michael Aguirre, former city attorney of San Diego.

Action – Tell your assemblymembers the bandits are in charge of the stagecoach again and to vote “NO” on AB 1054. – Oh, and Gov. Newsom too! Voting today or tomorrow!

Governor Newsom has been cracking the whip to get AB 1054 – “Public utilities” wildfires, pushed through under “urgency” conditions. PG&E, who declared bankruptcy after the recent wildfires caused by years of their negligence, along with their lawyers and their Wall St. creditors are excited…shareholders and executives see a quick way to wriggle out of their problems. (PG&E surged 16%, the most since April 12! Edison was up as much as 2.6%!) Bad sign. We say “NO”. Too fast, no transparency, no time for amendments. This proposed legislation forces us, the ratepayers, to cover the costs of their negligence, removes safety protections, and opens us up to endless bonds with no voter input. Our legislators need to say “NO” and have the time necessary to fully examine the concepts of this bill, along with other ideas, like having PG&E sell off assets to repay victim compensation.

Minimal script: I’m calling from [zip code] to ask the Assemblymember [___] to vote “NO” on AB 1054. This bill is a rushed second bailout of PG&E that gives them permission by default to pass liability costs on to ratepayers, rather than having to bear the costs of mismanagement themselves.

Contact: State Assemblymember Monique Limón (CA-37): SAC (916) 319-2037
Not your people?: findyourrep.legislature.ca.gov.

Minimal script to Governor Newsom: We didn’t elect you to let PG&E’s lawyers stampede you like a newbie and lock us into a terrible energy deal. CA is supposed to lead the way on energy in this new century. This Wall St. bailout is a throwback to Enron’s energy endrun of 1996 and the corruption that followed. Stop this now. Do not sign this legislation.

Contact: Governor Gavin Newsom: email(916) 445-2841


Background

Cheat us once, shame on you…In 1996, Enron’s lobbyists and “experts” sold our legislators on an energy bill, with promises that it would provide cheaper, cleaner energy for our families and businesses. Legislators removed protective regulations and passed Enron’s legislation, AB1890, which surrendered our state authority to the federal government and left us without essential legal protections.

After the deregulation of 2000, Enron and others pocketed tens of billions of dollars in profits out of the state’s economy and directly from ratepayers in just two years. (SFChronicle) “When state regulators responded, PG&E, after shoveling billions of dollars up to its holding company, cried poor and filed for bankruptcy. Bailing the company out cost Northern California utility customers billions, keeping rates unjustifiably high for more than a decade.”

Cheat us twice…With the lure of a wildfire victims’ compensation fund (which doesn’t cover 2017-8 losses), AB 1054 is being presented as the “only” solution to compensate victims and stabilize utilities. Lurking below in the fine print are the details that make Wall Street rich, and stick us with long-term higher utility bills, along with no guarantees for adequate compensation, no new safety requirements, chaotic oversight requirements and promises to fix electricity rates that aren’t permanent. Meanwhile, back at the ranch, no one knows what happened to all the money we’ve been paying PG&E for utility maintenance. 6 billion dollars from over 50 years…gone, while CA burns.

Wait. What? PG&E probably put some of it into the over $100 million they spent on lawyers to figure out how they can get us, the taxpayers to bail them out of this jam. Under their solution, AB 1054, we end up paying for all utility insurance premiums, most of the wildfire funds through a $10 billion bond and future reimbursements, and further unknown amounts due to the repeal of rules that limit utility cost recovery. We’d even be paying for the $2.5 billion in profits that utilities supposedly forgo for safety investments because it’s not actually their money; it’s ratepayer money that will be paid into the fund. The bill was also amended on Friday to make it more difficult for public agencies to replace PG&E with a public utility.

CA as hostile takeover target: Mike Gatto, in CALMatters, wrote “(AB 1054) has but one purpose: make as much money for the Wall Street consortium as quickly as possible, from our pockets. Moreover, it could turn PG&E into a zombie company, laden with debt. The consortium wants PG&E to replace the bonds it owns with new debt, costing billions more, while hedge funds and bankers, reap hundreds of millions in fees to underwrite and secure that debt.  And get this: the group would also take control of PG&E and install its hand-picked board of directors. Therefore, it’s safe to conclude that this proposal would end up similar to the leveraged buyouts we’ve seen in the past: a new master demands juicy returns, which lead to higher costs for customers, diminished service quality, and future worker layoffs…. (PG&E) recently underwent a much overdue house-cleaning after it filed for bankruptcy, and the new team has been willing to work with Gov. Newsom and the Legislature on comprehensive safety measures–something we never saw during my tenure in the Assembly. It has followed the proper legal process, and it seems to recognize that it must compensate wildfire victims fully. Thus, at this point, I see no point in substituting in a set of distressed-debt profiteers for the current board.

We were sooo close:  We are finally close to paying off the energy debacle from two decades ago. What are Newsom getting us into? If this were a sane world, we’d all be getting lower electricity bills soon. But AB 1054 will put us in hock for large bills until 2035.

“Bonds forever” is not a 007 movie: (Consumerwatchdog.org) “The details give the Public Utilities Commission power to bond endlessly, without the legislature’s approval, should ratepayers have to bear the burden of “recoverable” costs for fires.  The problem is the legislature is weakening the standard by which ratepayers can hold utilities accountable for not being prudent managers and starting fires. So ratepayers will pay in more instances than the past.

It’s all part of the deal making, but the new standard for fault puts the finger of the scale of justice on the utilities’ side in marginal cases. Ratepayers will have to pay. And there will be opportunities to charge them billions more through bonds without legislative veto. For example, the fund will not cover 2017 and 2018 fires, but the new weakened standard for fault will apply to whether shareholders or ratepayers pay in those cases under the legislation. (See below)

Also, if the wildfire fund ever runs out, the PUC will be able to make ratepayers pay through unlimited bonding authority. The Commission has been morally bankrupt for years, and hijacked by the utilities. There’s no reason to trust it with that type of power. Ratepayers could be on the hook for many billions of dollars more than the legislature was led to believe today under the rule changes in the bill.In addition, there’s lots of details in the complex bill that we just don’t know. And the Newsom Administration is not allowing any amendments because they want this bill done this week.”

Our fault, your fault, your fault, your fault. (Indivisiblesf.org) “Currently, when a utility’s equipment is involved in a wildfire, the utility must prove affirmatively that it did not contribute to the disaster.

Under AB 1054, utility companies would receive a “safety certification” every year by meeting some basic, ground-floor requirements. Then, a utility so certified is not liable by default, and victims of a disaster would need to organize to show the utility’s liability.

This means we would pay for wildfires caused by utilities’ malfunctioning or ill-maintained equipment, not the utilities that are supposed to maintain and properly operate that equipment.

We’re getting very close to the abusive system that corporations use to sue developing countries for billions when denied anticipated profits.

Tell your legislators to vote “NO” and let’s really plan for a CA of the 21st century.

 

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