The recent bankruptcy filing by PG&E, stemming from wildfire liabilities over the past two fire seasons, has raised an important issue. Why bail out PG&E and the stockholders and management who presided over the disasters – including the gas line explosion in San Bruno which killed 4 from my church? Why not let the stockholders lose all and the bondholders and fire victims be paid off from sale of assets to the State? Then run PG&E as a state institution?
There are many derivative issues which would have to be resolved, including:
- PG&E doesn’t serve all of Calif. Why should taxpayers down south have to be burdened by any risks from Norcal?
- Should fire victims’ damages have priority over bondholders?
- Who would run the socialized entity?
On the MidCoast of California, there is a “socialized” water and sanitary district, which remedied severe cost, safety, and quality issues stemming from private industry mismanagment. “Profits” are reinvested in the enterprise. Costs are now lower and quality and availability higher than before. Management is from local residents and hired specialists. Carmel is exploring a similar arrangement. These are small scale compared to PG&E, but the principle is the same. Why should a Public Utility like water or electricity be a profit-making Private entity?
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