Legislator to offer bill making PG&E publicly owned utility

SAN FRANCISCO -- The bankrupt Pacific Gas & Electric Company would be turned into a publicly owned utility under a bill proposed by a state lawmaker on Monday, but the company emphasized it is not for sale.

State Sen. Scott Wiener, D-San Francisco, said he would unveil legislation this week that will allow the state to take over PG&E by empowering the California Power Authority to buy all the utility's shares.

The transformed entity would be called the Northern California Energy Utility District and would have lower rates and heightened safety standards under the terms of his bill, according to Wiener. "PG&E is a failure, and we need to try something new," he said.

PG&E's "facilities are not for sale," utility spokesperson Paul Doherty emphasized in a statement. "Changing the structure of the company would not create a safer or cleaner operation."

Wiener said PG&E is no longer economically sustainable given it has repeatedly proven it prioritizes shareholder profits over investments in safety.

He said "PG&E's shares are very cheap right now precisely because they have liability" over its power lines causing massive wildfires, including the 2018 Camp Fire that killed 85 people and destroyed more than 180,000 structures.

The Northern California Energy Utility District would prioritize safety investments while having lower rates because it would be able to secure better financing from investors, Wiener said at a news conference that was protested by members of PG&E's union representing roughly 12,000 employees upset over the potential loss of retirement benefits.

The state-run utility would be modeled after the Long Island Power Authority in New York, Wiener said. A vast majority of the company's workers would be employed through a public benefit corporation, Northern California Energy Services, which would oversee daily operations of the utility, Wiener argued.

Wiener's announcement came on the heels of Gov. Gavin Newsom threatening last week to "take [PG&E] over, if necessary." He said, "I have no interest in the existing management, in the existing board."

Newsom has remained adamantly opposed to the utility's proposal to emerge from bankruptcy, citing what he called the lack of changes to its governance structure and flexible financing for it to make necessary safety investments.

PG&E must secure Newsom's approval to exit bankruptcy by a June 30 deadline to qualify for a state program offering a multi-billion-dollar wildfire assistance fund. The governor is already "pursuing strategies to protect California's interests through further intervention," according to attorneys representing Newsom in court filings.

PG&E responded to some of Newsom's concerns on Friday by announcing it would break its operations into new units in which each region would have its own safety officer, heighten safety standards and replace its board of directors.

Wiener said he has met with Newsom's staff about his proposal.

"I know the governor will have a huge say on what happens here," he said. "This is going to be a group, collaborative effort about the largest utility in California and in the country."

The governor's staff did not return requests for comment for this article.

The bill would not prevent San Francisco from pursuing a plan to form a locally operated utility, Wiener said.

Pacific Gas & Electric Corp., PG&E's parent, rejected in October a $2.5 billion offer from San Francisco to buy its power lines and other infrastructure in the city.