The Devil is in the Details of any State Takeover of California’s Private Electric Utilities
“The devil’s greatest trick ever played is to claim he doesn’t exist” – Charles Baudelaire
The current justification for the State of California to take over its three private investor-owned electric utilities (PG&E, SDG&E and Edison) is that public utilities do not have to pay a profit to its shareholders. This ideology devilishly misleads Californians.
After 30 years of working for county government and public utilities in California I realized that government doesn’t solve problems, it just shifts them around. Take the recently enacted policy in California to base electric rates on a combination of income and usage.
Another cost shifting area is property taxes. Pacific Gas and Electric in northern California paid $678 million in property taxes across 43 counties in 2022-2023. Where would local county governments replace those property taxes but by commensurately raising property taxes, sales taxes and/or Utility User’s Tax rates. Electric bills would be lowered but higher local tax rates would result. Everything is a seemingly invisible tradeoff.
Moreover, in my experience, sociologically speaking, state takeover of private utilities is no assurance of lower operating costs. Politicians tend to want to create more make-work patronage jobs and bloat to increase their political power and reassure reelection. Pareto’s Law indicates 20% do 80% of the work in a bureaucracy.
One of the tricks used to persuade the public against takeover of private-regulated electric utilities might devilishly result in the opposite conclusion. California’s average electric rate of 32.47 cents per kilowatt hour is often compared to North Dakota at 10.44 cents for each kilowatt hour (1 kilowatt hour would power your stove for 30 minutes of use). Most of California’s population live along the mild climate coastal area and average 2,257-kilowatt hours of power usage per year. Conversely, North Dakotans use 6,771 kilowatt hours of electricity per year, or 3 times as much as Californians, mainly due a greater proportion of cold temperature days. Adjusting the rates for the higher proportion of cold weather days, California’s electric rate would be around
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