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by stickfigure 1797 days ago
Because government-run electric utilities are a mixed bag too. "Public" utility monopolies like PG&E are an attempt to get some of the benefits of a market system from what is fundamentally a government service. The utility can raise money from investors, who expect a modest but stable return. In theory, the profit motive gives the utility an incentive to keep costs in check.

It's far from perfect, but actually-public utilities are responsible for a lot of disasters too. It's not obvious that nationalizing PG&E would be good for anyone.
1 comments
zbrozek 1797 days ago
Except they have regulated profit margins - it's cost-plus. So they have an incentive to make everything as expensive as possible to maximize their take. And the CPUC rubber stamps everything the utilities ask for.

CA has some of the most expensive electricity in the nation. So it doesn't seem like the idea worked out.

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seanmcdirmid 1797 days ago
California winds up being in the middle for avg money residents spend on household energy, but mostly because they don’t use AC or heat very much. https://wallethub.com/edu/energy-costs-by-state/4833
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zbrozek 1797 days ago
Sure, but I said most expensive electricity, not highest monthly bills.
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stickfigure 1796 days ago
You'll have to verify this yourself, but my understanding is that there is no clear winner on the public choice issue of public vs private electrical. There are well-run and poorly-run examples on both sides.

In PG&E's defense, it's not literally cost-plus, and the CPUC doesn't always rubber stamp everything. Imagining the government alternative, what would really be different? There will still be a big bureaucratic organization full of imperfect humans with muddy incentives and limited resources. Would PG&E be better if the board of directors was appointed by politicians instead of elected by shareholders? I doubt it.

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seanmcdirmid 1796 days ago
The most expensive energy would be Alaska and Hawaii for obvious reasons. California’s rates are similar to northeastern state rates (a bit lower than their average) but is definitely high for a western state that benefits from a lot of cheap hydro.
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