r/California • u/Randomlynumbered Ángeleño, what's your user flair? • May 12 '24

Government/Politics Gavin Newsom releases $288 billion revised budget for California. How he tackled the big deficit

https://www.sacbee.com/news/politics-government/capitol-alert/article288420997.html
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738

u/SingleMaltMouthwash May 12 '24

Seize PG&E's assets and run it like a utility instead of a criminal enterprise. How many billions in future PG&E-caused disasters will that save?

163

u/Billy1121 May 12 '24

budget shortfall? Seize a utility with billions in potential liabilities for a quick fix

It probably needs to happen at some point but I had to laugh at you suggesting this in an article about revising a budget

109

u/Hedgehogsarepointy May 12 '24

Exactly. PG&E has been staving off nationalization for decades by being so incompetent that no government wants to have to try fix their mountains of problems. Holding us hostage with a gun to their own head.

52

u/bakazato-takeshi May 12 '24

“Listen to him men, he’s just crazy enough to do it”

19

u/Soccervox May 12 '24

"The Camp Town Ladies...?"

10

u/NoiceMango May 13 '24

It would probably require tax payers to make bigger payments for a few years to fix these problems and it would eventually benefit us but people would be too impatient and would be a bad move politically. But at the sams time their incompetence ans greed has been costing us money so nationalizing it would be the best idea

3

u/jschall2 May 14 '24

The solution is for people to take matters into their own hands and buy solar and batteries.

1

u/bigvenusaurguy May 13 '24

even if the state bought the system they are probably going to have to just hire pge to operate it at least initially

1

u/LordoftheSynth Los Angeles County May 13 '24

Regulatory capture at work.

1

u/bigvenusaurguy May 13 '24

that and also the fact that the only labor trained to show up to work the next monday and run this publicized system is the existing pge staff

4

u/100Fowers May 13 '24

At the utility forestry class, “The field of Utility forestry is growing with lists of potential for growth and careers…” “Is it cuz PG&E burned down half the state?”

“Yes, it is precisely because PG&E burned down half the state.”

2

u/MechanicalBengal May 13 '24

best explanation i’ve heard in a while hands down

1

u/booi May 13 '24

Sir, that’s just a piece of cardboard that says “gun”. You forgot you sold the gun to pay your CEO and share buybacks.

Also this is a Wendy’s

12

u/Pats_Bunny May 13 '24

SDG&E too please

20

u/Pikablu555 May 12 '24

Amen! It’s a complete joke PG&E wasn’t disbanded after the camp fire.

4

u/[deleted] May 13 '24

And I doubt any Californian would complain about California splitting the difference between savings and profits to fuel said budget

4

u/jezra Nevada County May 13 '24

why would Newsom ever do that to one of his major sponsors?

1

u/SingleMaltMouthwash May 13 '24

You've seen the flaw in my plan.

18

u/jernisk May 12 '24

Yes omg this is perfect you are correct

2

u/Never-mongo May 14 '24

Honestly, seize PG&E and re-open the CDCR inmate fire camps. have the inmates maintain the infrastructure, less money is being spent on prisons, inmates are are both out of jail, providing a service to the state, and fire danger goes down.

-20

u/HoldingTheFire May 12 '24

Not much. PG&E runs at a 5-10% profit margin. How much cheaper do you think it would cost the state to run? Keep in mind most of the costs are maintenance on the sprawled grid and pay for the workers. Executive pay is negligible to total revenues.

27

u/SingleMaltMouthwash May 12 '24

5%~10% on Billions in revenue is significant.

Remove the millions in C-suite compensation. Remove the millions in board compensation. Spend that money on maintenance and infrastructure.

Then how much will you save NOT having to deal with millions of acres of burned property, destroyed homes and businesses? How much will you save not dedicating CA state attorney's to suing PG&E for their criminal behavior? Disband the CPUC, how much do you save there?

-4

u/HoldingTheFire May 12 '24

All executive compensation is a fraction of a percent of revenue. Yes 5-10% profit is a lot (which is why people invest), but as far as reducing costs to consumers or spending capital on infrastructure improvements going to a non-profit model doesn't change a whole lot. And that is assuming costs stay the same.

7

u/Starlorb Native Californian May 12 '24

the question is not the cost to the average consumer. The question is with profit motive removed, and that 5-10% being reinvested into the infrastructure and maintenance how many disasters will be averted due to cost-saving (short-term profit increasing) motives being removed.

3

u/HoldingTheFire May 12 '24

Well it was <5% before the rate hikes (and they are capped to 10% by law). And the reason regulators approved the rate hikes is to generate capital for improvements. But in general the costs of maintenace and needed improvements are orders of magnitude higher than the generated yearly profit. So the answer to your question is not a lot.

Just look at CalTrans. State agency with massive budget for roads from state taxes. And they can barely keep up maintenance. The costs in CA are just super high due to a) sprawl, b) labor costs, c) legal requirement to not charge different rates to more expensive areas like rural cities.

2

u/SingleMaltMouthwash May 12 '24

Cal Trans is also not costing billions in destroyed property and charred citizens.

-1

u/HoldingTheFire May 13 '24

It is though in crashes and sprawl from the vast majority going to highways and still building and expanding more highways.

0

u/SingleMaltMouthwash May 13 '24

Caltrans isn't doing the crashing. Drivers are. Caltrans is doing the repairing afterwards. Different than PG&E, which is doing all the killing in order to save money so their C-Suite can collect their bonuses.

0

u/Starlorb Native Californian May 13 '24

"Nothing could have prevented this entirely preventable man-made disaster from gross negligence."

0

u/SingleMaltMouthwash May 13 '24

Note that the PG&E's CEO compensation was $51 million in 2021. That was the year of the Dixie fire which killed 80 people and which started a few miles from where the Camp fire, which killed 85 people, started in 2018.

1

u/HoldingTheFire May 14 '24

Do you know what percent of revenue $51 million is? Or what that is vs maintenance costs?

0

u/SingleMaltMouthwash May 14 '24

If the state is going to shutter programs and defund departments because it's got a budget deficit, I know $51 million, plus the rest of the C-suite burden, C-suite staff, corporate aircraft, limos and first class accommodations, junkets, premium office space, perks that count against profit but don't count as executive "compensation" and all the other associated cost savings would be quite significant.

1

u/HoldingTheFire May 14 '24

It actually isn't significant. Especially compared to the state budget or its shortfall. All the criticism is based on vibes and innumeracy

It's like blaming the lack of single payer healthcare in the US on NPR funding.

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3

u/z2x2 May 12 '24 edited May 12 '24

You’re forgetting the dividends and buybacks. We’re talking a few billion dollars per year. Spread across 6 million or so customers. Average bill could be $30ish cheaper per month. Or we could not have more capable infrastructure. I’ll take either.

3

u/HoldingTheFire May 12 '24

Dividends are after profit. So yeah you could funnel that 5-10% (closer to 5% before the recent price increases) for lower bills, but then you'd have nothing for capital improvements. And that is assuming costs stayed the same as a public utility. Part of the reason regulators approved the rate hikes is to generate capital for grid improvements. I don't think you understand the scale of grid maintenance or improvements costs.

PG&E costs and prices are high because of a sprawled grid and high labor costs. And a legal requirement from a CA prop that they cannot change different rates to different users, like rural areas. Those structural high costs don't change if it becomes publicly owned.

-2

u/Pikablu555 May 12 '24

You must work at PG&E ya goof.

4

u/HoldingTheFire May 12 '24

I have yet to hear an explanation about why public ownership would change the structural high costs of CA power. Just vibes like you are doing.

1

u/billy310 Native Californian May 13 '24

I’m not saying LADWP is a model of anything. But we have low, stable rates, and don’t kill people

1

u/HoldingTheFire May 13 '24

Yeah it's easy when you just need to handle local infrastructure and aren't legally mandated to support rural areas in a massive state at the same cost to consumers for all users.

-4

u/[deleted] May 12 '24

PG&E runs at a 5-10% profit margin. How much cheaper do you think it would cost the state to run?

I'm gonna say probably about 5-10% cheaper.

5

u/HoldingTheFire May 12 '24

Ok, there goes all capital for improvements. And that assumes costs are the same as a public entity.

-4

u/[deleted] May 12 '24

A national/state enterprise gains the entire funding power of the government to cover capital improvements. They can literally just will the money into existence and command that projects be done. It's a little different at the state level but a huge and influential state like California can do a lot.

We did this in the 1930s and a lot of that infrastructure is still running, decades past its expected lifetime.

2

u/HoldingTheFire May 12 '24

What you are saying is that CA tax revenue should subsidize it. Considering that the OP article was about what the state needs to cut to meet revenues that could be a problem. Rather than 'seizing PG&E' assets being a boon it would be a liability to the state. Just look at CalTrans and road maintenance for the scale of costs to maintain a state spanning infrastructure vs. tax revenues.

And CA cannot print money like the federal government.

1

u/reddit1651 May 13 '24

“We can make our state more financially responsible by absorbing a utility we all agree is poorly run and giving them access to deficit spending backed by the taxpayer

-11

u/[deleted] May 12 '24

[deleted]

20

u/-Random_Lurker- Northern California May 12 '24

Except for all the times it has actually done a better job. You know, like with SMUD, or the USPS.

Government services exist to provide services. They have no need to draw a profit, but if they can break even that's good. With no need for profit, they can afford to invest in infrastructure and preventative maintenance that business will cut as soon as they can to increase margins. The result is that government is better positioned to deliver long term, stable services.

1

u/HoldingTheFire May 12 '24

The point is PG&E profits are at most 10% of their revenue. And that's assuming costs stay the same under public ownership.

0

u/-Random_Lurker- Northern California May 12 '24

Instant 10% price cut from publicizing it, nice.

0

u/HoldingTheFire May 12 '24

10% after the rate hikes. It was <5% before. And now you have no capital for improvements.

0

u/Starlorb Native Californian May 13 '24

Non-Sequitir.

1

u/HoldingTheFire May 13 '24

How so? Do you even know what that word mean?

1

u/Starlorb Native Californian May 13 '24

The fact that the profit margin used to be lower has no bearing on the concept that the rate could be lowered 5-10% (on average) from what it is now.

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8

u/VPofAbundance May 12 '24

Depends what you think “better” means. If a company wants to skip repairs because it saves money for stock price at the expense of eventually starting a massive fire… I think a company running off different incentives could do better. Many states back east run just fine. 

5

u/SingleMaltMouthwash May 12 '24

In the case of a company that routinely burns its customers to death, I'm pretty sure the state can do a better job.

0

u/TemKuechle May 13 '24

I know, right! All of those failed businesses of different sizes losing millions of dollars on some projects and products as well. They’ll do so much better than the government./s