Sonoma Clean Power officials will explore public ownership of PG&E utility lines

Sonoma Clean Power, a public agency that supplies renewable energy to Sonoma and Mendocino counties, will begin exploring the impact of a public takeover of PG&E’s electrical grid as the bankrupt utility faces growing questions about the safety and solvency of its operations.

In a unanimous vote, Sonoma Clean Power’s board of directors instructed staff Thursday to study what role, if any, the Santa Rosa agency might play in the acquisition of PG&E power lines and other equipment.

“I think it’s incumbent upon us,” said board Chairman Mark Landman, a member of the Cotati City Council. “I don’t see where we have a choice. We recognize it. I know the public recognizes it.”

The vote followed a discussion of PG&E’s precarious hold on solvency, including whether it would be able to meet a June 30 deadline set by Gov. Gavin Newsom to resolve its bankruptcy in order to access state money to pay for future wildfire liabilities.

Sonoma Clean Power is following the lead of San Francisco and a public power agency in Yolo County, which each made offers to buy PG&E’s distribution grid, and a group of elected officials in Northern California who urged the creation of a customer-owned cooperative to ?replace PG&E.

PG&E facilities are not for sale, spokeswoman Deanna Contreras said in an emailed statement. Changing the structure of the company would not create a safer operation, she said.

“We remain firmly convinced that a government or customer takeover is not the optimal solution that will address the challenges and serve the long-run interests of all customers in the communities we serve,” Contreras said.

Sonoma Clean Power has a symbiotic relationship with PG&E. Founded in 2014, the agency buys and generates electricity from renewable sources, then delivers it to customers over PG&E wires. PG&E retains responsibility for maintaining the grid, servicing customers and billing.

Acquiring the operations of a close partner is a difficult topic to discuss, said Geof Syphers, chief executive officer for Sonoma Clean Power. But PG&E is behind on maintenance by 10 to 14 years and is ensnared in a multibillion-dollar bankruptcy case featuring plans put forth by hedge funds bent on squeezing huge margins out of the utility, Syphers said.

“The only way to do that is hurt employees, don’t invest in safety or you do something else dramatic,” Syphers said. “I’m nervous at the outset at who’s competing to control PG&E.”

Board member Dave King, a member of the Petaluma City Council, put a sharper point on it.

“Nothing I can think of says, ‘screw the public interest’ like a hedge fund-owned public utility,” King said.

Even without the uncertainty about its future, PG&E is dogged by questions about its past. Sonoma Clean Power documents outlined a series of high-profile and expensive mishaps, leading to criticism the utility’s leadership has favored profits at the expense of safety.

PG&E equipment is blamed for a series of wildfires including the 2018 Camp fire, the deadliest and most destructive in state history. The company is also responsible for a deadly gas pipeline explosion in 2010 that destroyed a neighborhood and killed eight people in San Bruno.

“Investigations, penalties, convictions, fines and probations have not worked,” according to a July statement cited in Sonoma Clean Power documents from the Public Advocate’s Office, which represents customers’ interests before the state Public Utilities Commission. “Executive shuffling hasn’t worked. Reorganizations haven’t worked. Replacing and overpaying board members won’t work. PG&E is a reactor not a creator.”

It’s possible, too, that PG&E is to blame for the recent Kincade fire, the largest in Sonoma County history. The fire erupted near a PG&E transmission tower that had not been deactivated during a power shutoff and malfunctioned. The blackouts have left millions of customers, including thousands of vulnerable people, without critical power. At least one death has been attributed to the utility - a man who relied on electricity to power needed medical equipment.

The public officials who lead Sonoma Clean Power have little faith that PG&E has the capacity to make its grid both reliable and safe. Landman said it was time to offer a way forward.

“Do we truly feel continuing with a hedge fund-controlled entity - one that is a convicted felon, probation violator, an organization that has repeatedly falsified evidence even after having caused death and destruction through their criminal negligence - do we really believe ‘business as usual’ is the most prudent course of action?” Landman said.

Contreras, the PG&E spokeswoman, said via email the company is focused on resolving wildfire claims and exiting bankruptcy as quickly as possible.

She said the company is committed to working with stakeholders to make the necessary changes to build a stronger and safer company and “be the company our customers and communities want and deserve.”

But Sonoma Clean Power board members spoke of a power and leadership vacuum, and seemed to relish the opportunity to fill that void. They directed staff to explore the idea of customer ownership of the distribution grid infrastructure either locally or across all of PG&E’s territory.

Syphers said he wanted real action to begin before next fire season.

There’s no telling where that exploration might lead, even if Landman said Sonoma Clean Power is “ideally suited” to lead. As a result of Thursday’s vote, Sonoma Clean Power will seek to play a role in acquiring some or all of PG&E’s operations if the utility does not emerge from bankruptcy.

There will be plenty of problems to look into, including the infrastructure repair costs that ostensibly would still exist should PG&E lines be taken over. Syphers cited a failed piece of legislation that would have bailed out PG&E to the tune of $20 billion as one potential estimate of the costs.

“That gives you an idea of what PG&E thought was the bare minimum to get them out of Dodge,” Syphers said.

Syphers doesn’t put all of the blame on PG&E. The Public Utility Commission’s policy objectives required certain investments, and the company cut back in other areas to reach those goals, making this a “50-50 problem,” Syphers said.

Sonoma County Supervisor Lynda Hopkins, the Sonoma County representative to Sonoma Clean Power, called Thursday’s vote a bold and essential step.

She recounted west county evacuees returning to freezing cold, dark houses in the wake of Kincade fire evacuations, the result of another PG&E-caused power shutoff. The status quo, she said, is unacceptable.

“It’s a little scary to stick your neck out there,” Hopkins said of Sonoma Clean Power. “I’m a firm believer that if you’re not at the table, you’re on the menu.”

You can reach Staff Writer Tyler Silvy at 707-526-8667 or at tyler.silvy@pressdemocrat.com. On Twitter ?@tylersilvy.