PG&E's $2.2 billion pipeline plan triggers outrage (want customers to pick up 90% of tab)

[The Straight Story]

PG&E's $2.2 billion pipeline plan triggers outrage


PG&E on Friday unveiled an extensive pipeline modernization plan that would cost $2.2 billion over the next four years -- an effort to prevent another disaster like the one that incinerated San Bruno last year.

But the company outraged consumer advocates and elected officials by proposing that customers pick up 90 percent of the expense.

The plan -- which calls for overhauling 20 percent of PG&E's pipeline system by inspecting hundreds of miles of aged pipe, replacing other gas lines and adding automated valves to shut off gas in emergencies -- must be approved by the California Public Utilities Commission. PG&E said it also plans additional pipeline upgrades after that, but did not detail the cost.

The company estimated the expense through 2014 at $2.18 billion, with its customers responsible for $1.96 billion. It expects to bill them $769 million through 2014. That would increase a typical residential gas customer's monthly bill by $1.93 to $47.16, the company said. The rest of the expense would be billed to PG&E customers over 40 years, according to company spokesman David Eisenhauer, but he said it would be difficult to calculate how much that might add to an average bill.

http://www.mercurynews.com/breaking-news/ci_18766199

[ProgressiveProfessor]

1. Where is it going to come from? They can not bill previous customers

for what should have been covered earlier. Where else would they get the capital for the required upgrades? Alternatively they could cut off service to those area...which would be unacceptable.

[strategery blunder]

2. At least some of it should come from the next 40 years of executive compensation

I know that wouldn't cover the entire cost, but those who made the decisions to cut safety and maintenance should bear some of that "shared sacrifice."

I don't think PG&E would ever ask the utility commission to approve THAT, however.

[girl gone mad]

8. They should take it from profits.

Not every cost needs to be passed along to the consumer.

[ProgressiveProfessor]

9. Profits and costs are already under the tight control of the California PUC

There is little profit these days in terms of ROI when it comes to public utilities. Not supporting them as much as being realistic.

[girl gone mad]

11. According to the article, PG&E cut corners in order to..

increase shareholder profits over the past 20 years.

Profits were going up because proper maintenance wasn't being done. They didn't pass the cost savings from reduced maintenance on to consumers, they passed it on to shareholders. Therefore, the increased costs should also be passed on to the shareholders. If shareholders are unhappy, they can vote to reduce executive compensation or even claw back some of the compensation which was previously handed out when the decisions not to maintain infrastructure were being made.

[rdking647]

3. would you rather they let another disaster occur?

or just cut off service to that area???
who do you expect to pay?

[The Straight Story]

4. Investors. (nt)

[tularetom]

5. It should come out of the dividends they pay to their shareholders

Last time I looked they were paying a dividend of about 4 bits per share. Those dividends should be reduced or eliminated until the emergency repairs are completed. As far as system upgrades due to ordinary wear and tear those are a legitimate charge for gas customers to pay.

The PUC needs to grow a pair and tell them they can't get their users to pay for their negligence. Make the owners of the company (owners of PG&E stock) pay for it.

[xchrom]

10. +1

[demosincebirth]

6. We customers are always on the hook for their fuckups. Always.

[Firebrand Gary]

7. This detail is HUGE! This is against everything the Tea Party stands for RIGHT?