A former California regulator said the state could resolve its ongoing wildfire-induced electric utility issues by replacing three major investor-owned utilities and taking over the power distribution business.
Loretta Lynch, who was chief regulator of the California Public Utilities Commission (CPUC) from 2000-2005, is advocating the state to go beyond what Gov. Gavin Newsom has proposed and create a public power authority. She offered few details, however, in how the privately held assets could be switched to state control.
Now a board member of utility watchdog Protect Our Communities, Lynch has publicly feuded with her CPUC successor Michael Peevey, one-time president of Southern California Edison Co. (SCE) and founder of one of the state's early unregulated power companies, New Energy Ventures.
During an interview last month that was broadcast on radio station WORT in Madison, WI, Lynch said she was worried that Newsom, now in his first year as governor, had called for a public utility takeover "as a last resort, and he has called people to the table to make a deal.” However, she said she is concerned that creditors in the ongoing bankruptcy by Pacific Gas and Electric Co. (PG&E) have an advantage over the public sector.
"Wall Street knows much more about how to profit from a deal than any government official," Lynch reportedly said during the radio interview. "I am quite concerned that history will repeat itself,” as PG&E did when it filed for bankruptcy in 2002.
Lynch said California and national governmental officials do not recognize that the nation is "on the cusp of an historic change regarding how to keep the lights on." Technology has freed consumers from being tied to 19th century technology and fossil fuels, she said.
"Recent technological advances are revolutionizing electricity and energy and frankly, it is easier than ever for local communities to create their own energy democracy through micro-grids, solar, distributed resources, and energy efficiency."
All of this makes it easier for the general public to control their energy needs, according to Lynch. "If we take the profits out of electricity it means we can take those dollars to better maintain our systems."
Last summer Lynch advocated against a compromise measure to deal with wildfires and the utilities under Assembly Bill 1054. She said it would "leave utility customers holding the bag." Consumers, she said, would pay for all utility insurance premiums, most of the wildfire funds through a $10 billion bond and future reimbursements, and further unknown amounts because of the repeal of rules that limit utility cost recovery.
PG&E is not supportive of Lynch’s approach. Spokesman Jason King said the San Francisco-based combination utility considers a government or customer takeover "not the optimal solution" for addressing the challenges and long-run customer interests that are in play in California.
King repeated the PG&E pledge to "remain focused on fairly resolving wildfire claims and exiting the Chapter 11 process as quickly as possible," and stay "committed to working with all stakeholders to make the necessary changes moving forward to build a stronger and safer PG&E and be the company our customers and communities want and deserve."
SCE spokesperson Robert Laffoon Villegas avoided commenting directly on Lynch’s proposal. SCE, he said, is continuing to mitigate wildfire risk by "further hardening our infrastructure, bolstering situational awareness and enhancing our operation practices."