R.I.P. PG&E

Remember the superrr bad air quality?! I do :( PG&E, Pacific Gas and Electricity Company,  just filed
for bankruptcy. In 2017, seventeen major wildfires fires were connected to PG&E. These fires destroyed
193,743 acres in eight counties and led to deaths of 22 people. 2018 was worse. The Wolseley fire tore
through Southern California and destroyed more than 1,500 structures from Oak Park to Malibu,
burning almost 97,000 acres and killing three people. Meanwhile, Camp Fire raged through Northern
California killing a minimum of 85 people and destroyed 14,000 residences the size of Chicago!! The
2018 Wildfire season was the deadliest and most destructive wildfire season in California with a total
of 8,527 fires burning an area of 1,893,913 acres. As a result of the 2017 and 2018 fires, PG&E is facing
approximately $30 billion in liabilities.


Although PG&E is a public utility related to the crazy damages of the wildfires, the intensity of the
wildfires cannot be entirely attributed to the company. PG&E is legally required to provide power to
all residents of the state, including those living in rural areas. And because conditions have become
drier, the individual mistakes causing damage have increased. In the future, it may be impossible for
utility companies to manage and function under the current and potentially worse conditions in the near
future, given the risks.


PG&E is a Gas and Electricity company, given the name of course, which means it’s a monopoly! Once
the gargantuan fixed costs involved with power generation and power lines are payed, each additional
unit of electricity costs very little. The more units sold, the more the fixed costs can be spread, creating
a reasonable price for the consumer. Generally, consumers are unresponsive to changes in price because
there are no other options. However, with all the issues involving PG&E, consumers have considered a
new option, the Valley Clean Energy Alliance. In fact, consumers are willing to now endure higher bills
after leaving PG&E, a monopoly utility company. Is this the end of PG&E? What would you do?

https://www.sacbee.com/news/politics-government/capitol-alert/article224561110.html

Comments

  1. Anny T.March 10, 2019 at 5:50 PM

    This is a great read! I think it is hard to say that consumers would be willing to switch to a higher priced product to fight a monopoly. Because PG&E is a monopoly, the general population of America can only think of PG&E when they think about gas and electricity. It is extremely difficult for smaller brands to enter to the market. Part of it is due to distrust. Many consumers may think ill of smaller named companies because "no one" knows the company, there for psychology tells them people don't know it because it is not "good". PG&E banks on the trust the nation has for the well established company. However, that trust can be ruined. The extremely destructive fire that occurred in November in Northern California, "Camp Fire", can be used as an example. PG&E definitely ruined the trust of many of their consumers and it is under speculation that PG&E may go bankrupt. This may pave way for people to switch to a different company! I think it is possible, but it is a long shot. It is very difficult to merge into an industry dominated by one company.

    Source: https://www.salon.com/2019/01/15/culpability-for-camp-fire-leads-to-bankruptcy-prep-for-california-utility-monopoly-pge/

    ReplyDelete
  2. AnonymousMarch 18, 2019 at 9:53 PM

    I really enjoyed reading this post and gained a deeper understanding of the ongoing situation with PG & E. However, when I looked further, I found out that the issue at hand isn't as simple as it may seem. The main issue is that even if Californians choose to turn towards other options for energy and the utilities provided by PG & E, we would still be relying on the company. This is because much of the energy infrastructure in the State is owned and operated by them. Even new companies would be reliant on the infrastructure already in place. In turn, new options would be based around PG & E and it would be extremely hard to break away from the monopoly at place. What really needs to be considered is a more effective way to reduce the monopoly that PG & E has and spur on competition in the industry.

    Source : https://www.sfgate.com/local/article/alternatives-to-pge-other-options-rates-monopoly-13533155.php

    ReplyDelete

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