If California doesn't like PG&E making $550M profit, and would like PG&E spend more on maintenance, it should set lower profit target, and allow PG&E spend more money on maintenance. PG&E operates based on decisions of California Public Utilities Commission, which decides, among other things, how much money PG&E is allowed to make, and how much it is allowed to spend on maintenance. Here's what it looks like: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M102/K...
PG&E would love to spend more money on maintenance. It doesn't cut into their profits, because their expenses and profits are set by state government commission anyway. Of course, the government commission has some incentive to keep the rate low, to make citizens happy, which makes it limit how much money PG&E can make and spend.
The above is not meant to imply that if PG&E worked like any normal company, they'd maintain their shit better -- I have no idea if they would. However, in the current regime, where CPUC exercises so much control over what PG&E does and how much money it makes and spends, the blame cannot be solely placed on PG&E side.
Why is it people will argue that there should be fewer regulations to allow companies more freedom to operate but when those companies, unsurprisingly, put money ahead of safety, it’s then the government’s fault for not regulating those companies?
At some point companies need to take responsibility and be held accountable for their (in)actions. I know this is an unpopular opinion for HN, given its venture funding roots, but companies shouldn’t be given a free pass every time they screw up due to placing greed above all else.
I don’t think you understood my comment. PG&E is as regulated as you can possibly get without literally being part of government. When PG&E wants to spend $100M on maintenance, it has to ask government for permission, and CPUC needs to approve this expense.
My point here is not to argue that with less regulation, PG&E would do better job when it comes to maintenance — I don’t know if it would. However, considering how deeply regulated it actually is, and how much the regulator controls everything it does, some blame must also be placed on the regulator’s side.
There's definitely an observable issue with Californian electricity supplies being significantly worse than in other parts of the world, which have more liberalised transmission operator firms.
Is it more liberalised in other parts of the world though? That’s not usually the case for Europe and China (the next two biggest global economies). Perhaps it might be true specifically with regards to electricity supply but I would be very surprised if that were the case knowing how the U.K. likes to regulate similar services which I have directly been employed by.
> PG&E would love to spend more money on maintenance
Yeah, their series of felony convictions for violating the law regarding maintenance, and obstructing investigations into those failures, tells a very different story.
IMO, this is the most important comment here (so far) in understanding the investment & maintenance decision making and constaints of PG&E.
From the linked CPUC Decision Making in the above comment, there are multiple examples where PG&E have advocated for increased spending for safety purposes, but organisations such as the Division of Ratepayer Advocates and The Utility Reform Network were pushing back. Ultimately, however, it is the CPUC that weighs the arguments of the different parties and determines allowable spending.
> PG&E operates based on decisions of California Public Utilities Commission...
As clarification, your statement makes it sound like CPUC makes unilateral decisions about what PG&E can or cannot do when, in fact, CPUC makes those decisions based on requests made by PG&E.
While CPUC does have a certain level of decision making power, a lot of their decisions are made based on what PG&E says is the right/necessary thing to do.
PG&E would love to spend more money on maintenance. It doesn't cut into their profits, because their expenses and profits are set by state government commission anyway. Of course, the government commission has some incentive to keep the rate low, to make citizens happy, which makes it limit how much money PG&E can make and spend.
The above is not meant to imply that if PG&E worked like any normal company, they'd maintain their shit better -- I have no idea if they would. However, in the current regime, where CPUC exercises so much control over what PG&E does and how much money it makes and spends, the blame cannot be solely placed on PG&E side.