[amorphid]

> However, AB 33 could potentially mean that PG&E customers are on the hook to repay the secured bonds.

Aren't customers on the hook regardless? PG&E gets it's money from customers, which would imply that customers are paying would be the ones to pay down the debt. Maybe they mean customers are a captive audience, and rates could be raised to cover the costs of the debt without impacting PG&E's profits.

[yayana]

That's part of the pointlessness of allowing private monopolies. All profits go to stockholders normal losses from things like gross inefficiency are replaced with price hikes.

But a drastic expense can cause bankruptcy, taking ownership from the stockholders and cause a resale bellow book value to new risk takers that now factor in this kind of risk, pressure the new management to avoid it repeating, and are more or less happy with current rates given their lower investment.

Watch them cast that as an injustice that our corporate social net needs to prevent instead of the correct result.

Giving them a sweet bond deal essentially gives them the opportunity to turn it into longterm price hikes and reward current shareholders for owning a fire hazard (or really not claw back that reward by killing the stock price as it has already been paid out in years of higher dividends due to lower safety costs.)

[Scipio_Afri]

This is good analysis. Not to say that the "correct result" is the best result - we'd find a way (laws) to force profits to prevent fairly likely disasterous events from happening in the first place. In a competitive marketplace with enforcement of the spirit of those laws that would mean companies try to innovate and drive down the costs of implementing those changes. It would also mean that competition woult keep a lid on profits from becoming too great, creating motivation for companies to simply pursue the most profitable thing. As a natural market (essentially infrastructure) monopoly, things are different.

If infrastructure/natural monopolies are run by the state, that is a decent solution so long as people are elected into power that understand they're making decisions to maximize the benefit of the citizens.

What is needed is tighter enforcement or a framework which incentivizes entities for innovating ways to improve services to their customers and minimize societial impact. While bankruptcy and the bond market is a decent check on that behavior, those who enacted those policies and made more profit with them enriched themselves and simply had the clock run out on their corner cutting not causing external damage (externalities on society). It doesn't prevent that behavior but it does prevent it from continuing.. for some time until the new board looks for ways to further their return on investment. Which eventually leads to the similar damaging behavior.

[e40]

The PUC sets the rates for customers, so it's not automatic that PG&E can pass through the costs. Presumably, if the PUC doesn't approve a rate increase, PG&E would need to cut costs some where (exec salaries, layoffs, etc).

[tomohawk]

Fire prevention maintenance...

[jdavis703]

I'm fine with being on the hook. The fires were awful, but for me personally the smoke was the worst. I'd happily pay double my electric bill if it meant I could breathe clean air.