Jeff Smith 2:30 p.m., June 26
- Community Blog
- Encanto Gas Holder
The Ethics of PG&E and Possible Passage of Proposition 16
In today's distinguished daily paper, there is an editorial written by Robert C. Fellmeth, Price professor of public interest law at the University of San Diego School of Law. Professor Fellmeth's editorial pretty much slams Proposition 16, the proposed monopolistic constitutional amendment being promoted by Pacific Gas and Electric.
I was never a law student at USD, and to be honest, after finishing the undergraduate computer science major with a mathematics minor under advisement of Professor Stacy Langton, I never actually graduated from USD for not completing that third semester of Spanish language instruction.
Still, I heard Professor Fellmeth loudly and clearly when he wrote: “Proposition 16 really hits a new low. ... We can only hope that the consulting firm hired by PG&E did not use any of our former students at USD.”
Before any of us gets the impression that USD is another bastion of flaming liberalism and anti-Republican sentiment, one should be aware that USD is now on a national ten-best list for its business school. While living on campus there in the 1990s, it was my impression that a significant number of the business school students were looking forward to attending the law school after graduating with the bachelor in business degree. At least, that is what my dorm brothers and sisters told me as I tutored them in algebra and business calculus.
As undergraduate students, we were required at USD to get a strong liberal education, where the adjective “liberal” has nothing to do with politics. I expect that some readers will make the mistake of confusing liberal education with liberal politics, but then again not many people have taken the time to read the introductory material in the Britannica Great Books of the Western World series either.
As part of a strong liberal education, there is the requirement to take one or more ethics classes at USD. In addition to Christian Ethics (after all USD is a Catholic university), I also took Biomedical Ethics, where I was introduced to the concept of combining utilitarianism with other philosophies into an ethical decision process, as a matter of deciding whether ordinary acts in the real world were good or bad. If something infringed on the personal rights of individuals or was not in the best interest of the greatest number of people, then it was an obvious sign to stop and rethink what it was that one wanted to do.
The problem with all corporations like PG&E, SDG&E, Sempra Energy and Enron is that they are all examples of artificial persons under the law, not natural persons like you or me.
These artificial persons have no legal loyalty to anyone except to their board of directors as elected by corporate shareholders. There is a legal and practical consequence to corporate loyalty to boards of directors and their electing shareholders: profit matters more to corporations than the public good. If the public good is served by a corporation seeking greater profits, then that is a truly good thing, but in most instances, such as in PG&E's promotion of Proposition 16, public utility corporations seeking profit protections through a state constitutional amendment mean that the public is going to have its rights trampled on to some degree.
If there is any question about this, then just stop and think about how and why BP is acting the way it is in the Gulf of Mexico.
Proposition 16 is about forcing consumers to go through the expense of a public election before being allowed to avoid PG&E and other investor owned utilities to get their power from a municipal power company or through community choice aggregation. Indeed, the term “community choice aggregation” implies that consumers did choose to get their power from another source rather than deal with PG&E or the other investor owned utilities.
According to Christopher J. Warner of PG&E's legal department, “Community choice aggregation means that customers should have a meaningful choice in deciding who will be their electricity supplier. To have a meaningful choice, the process customers follow to make their choice must be easily understood and easily completed. Customers must also have access to all of the information they need and want to make their decision.”
As real persons, we also have a right to expect that neither the state nor any corporation established under state law is going to kill us by burning us out of our homes and neighborhoods in a foreseeable and preventable wildfire.
As part of an ethical decision process, I choose to avoid using an investor owned utility because those corporate-owned utilities want us to pay for wildfires caused by their own negligence. SCE, SDG&E and PG&E are all currently requesting authority from the California Public Utilities Commission to bill us for their uninsured wildfire legal and other expenses, where the utilities insist that there be no automatic review to prevent that billing when the wildfires were caused by utility negligence. CPUC's Division of Ratepayer Advocates opposes this scheme as an open-ended tax on consumers with no limits, as the customer liability would be for all uninsured legal costs tied to future wildfires, no matter how many lawsuits the utilities lost or settled out of court.
If anyone is interested, SDG&E just voluntarily settled with the CPUC to close investigations into the 2007 Guejito-Rice-Witch wildfire complex. Fortunately, closing those investigations was worth it to SDG&E to have its insurance handle the cost with shareholders picking up any uninsured amount.
As long as Sempra Energy is making $8-$11 billion a year and paying dividends to shareholders while its SDG&E utility refuses to put all power lines underground as its first order of business, I consider that to be willful corporate negligence. SDG&E employees have already testified last year to CPUC how SDG&E equipment failures led to wildfires in 2007. Those 2007 wildfires were foreseeable based on SDG&E experience in the 2003 wildfire season. Right now, SDG&E has no plans to put the power lines underground until 2063, and Sempra Energy is putting no profits back into SDG&E to speed that up.
Given our collective wildfire experiences from 2003 and 2007 in the County of San Diego, one can only imagine how many of our homes will be destroyed, how many of us will flee in mandatory evacuations, how many of us will be scorched or killed by utility-caused wildfires between now and 2063.
If Proposition 16 passes, then all I can tell you about not rewarding corporate bad behavior is to get more and more of your electricity from off-grid solar panels or from some other source that does not result in more monopolistic profits to the investor owned public utilities. Some of my neighbors are talking about leaving California if it passes, especially the ones who are already known as SDG&E crime victims. Those corporations may not like me writing this, but I consider it to be a fair and reasonable popular response to the passage of their constitutional amendment, placing investor owned utilities above the rights of ordinary citizens in charter cities and other municipalities in the State of California.
After all, in a truly free market without constitutional power monopolies, the customer is always right.
More like this:
- CPUC's Consumer Protection and Safety Division In Need Of Wildfire Cause Data — Nov. 10, 2010
- What is an Unavoidable Cost of SDG&E Doing Business? — Sept. 1, 2010
- SDG&E, Other IOU Wildfire Billing WEBA Application Still in Negotiations — June 4, 2010
- SDG&E, the IOU WEBA Application, and Proposition 16 — May 23, 2010
- Uninsured Wildfire Billings Still Tied Up in Negotiations — May 19, 2010