Pacific Gas & Electronic: A silent Partner in the Unsustainable Golden State Economy of California

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The state of California, with the 39.56 million in Population and Area of 163,696 square miles, has a net worth over $6 trillion or about $160,000 per resident. The Golden state keeps up 17 percent of the national net wealth, ad-lib 12 percent of the U.S. population, and nearly 1,650 zip codes. It’s considered to be among the top five most influential economies in the world, hence clenching a citadel in the nation’s federal legislative process. Despite all said and done with California is recognized for its unique Infrastructural deficit with state and local authorities owing to the sum of $1.3 trillion to the federal government as of June 30, 2015. According to another source, it may even reach as high as $2.3 trillion. Recent Hoover Institute postulated that over $1 trillion in pension liability or $76,884 per household alone correspondingly, making California the 10th highest sales taxed state in the nation. Many Californians are utterly fed up with their lifestyle. Hence, they are compelled to flee their home state to low tax states offering more jobs due to increasing housing costs and taxes.

According to, California has the highest debt-to-income ratio in the country ranking last among the rest of the country in quality of life, according to a study by U.S. News. Not surprising enough, California is striding even farther to the left by hosting intensifying pinnacle liberal doctrines, comprising social programs while anticipating the rest of the nation to pursue in support of disbursing their cause. Contrary to its descriptive epithet as a golden state, California is nothing close to being precious to its citizens, as it gives birth to the highest housing crisis in the country. Unsurprisingly has the most considerable multitude of the homeless community in the country, unable to sustain its essential supply of electricity to residents. So far, the state has failed to hold the liable party accountable for ravaging brush fires that have destroyed thousands of homes due to the shortcomings of a few others. It has neglected to deter excessive power outages and rising electricity costs that have been the consequence of neglectful sociopolitical malfunction for the deciding decades.

California’s economy Stands Unsustainable

The state of California is ceasing to a role to uphold itself, as it gives birth to hit the ferocious ring of flunking economic vitality and betterment. Its administration seems to be declining to provide the four pillars of sustainability. Latter consists of programs, initiatives, and actions primarily intended for the preservation of a particular reserve by four distinct domains; human, social, economic, and environmental.

As spoken of earlier, California’s culmination has been dismal. Unlike any other developed industries in the world, it rants conceivably of clasping the most well-known natural resources of any state along with gleaming high-tech sectors. Nonetheless, like a myriad of good economic tales, government policies, and ornamental attitude along with monopoly are endangering its fate. Like other corporations, the Pacific Gas & Electric (PG&E), has been able to play the way forward to cornering power conglomerate, and propagate ensuring legislative initiative of its administrators by hosting its amulet winning over political suffrages in their unethical games.

As the biggest investor-owned utility company serving 16 million customers in California, PG&E has intentionally cut the flow of electricity to 800,000 households last week for the second time this year under the rationale of urgency to confirm public protection. According to PG&E, the shutoffs conformed as a meaningful safeguard to curtail the risk of wildfires in the region that imperiled the San Francisco Bay Area. The high sustained winds with gusts of over 70 miles per hour were deemed to be a potential hazard to decaying overhead power lines. Along with the dry season, the utility company put up with the privilege of abridging power to its patrons. The shutoff implication of this size reaches beyond the essential safety that each episode might have cost the region’s economy over $2 billion, potentially saving billions for the entity.

A peek at the history of the PG&E

Pacific Gas and Electric provides natural gas and electricity to the most considerable part of California, from Bakersfield and to the north side of the County of Santa Barbara to near the Oregon State Line, Nevada, and Arizona Line, which represents 5.2 million households. The California Public Utilities Commission oversees PG&E and is the significant sidekick of the owning firm, i.e., PG&E Corporation. As of January 16, 2019, the power company has a market capitalization of $3.242 billion. On January 14, 2019, PG&E declared that it was filing for Chapter 11 bankruptcy in reaction to the economic challenges in association with the destructive wildfires that ensued in Northern California in 2017 and 2018. On January 15, 2019, the company asserted it would not be making the outstanding interest payment of $21.6 million that equaled to 5.40% Senior Notes due on January 15, 2040, which is worth $800 million.

Back in the 1850s, gas production was launched in the United States as a means of lighting. Gasworks were built in the larger eastern American cities when there was no gas industry in the West. In San Francisco, street lighting was available on Merchant Street, in the form of oil lamps, ran by Gas utilities, including San Francisco Gas Light that encountered new competition with the overture of electric lighting to California. According to a 2012 PG&E gazette and their 1952 commissioned history, in 1879, San Francisco was the first city in the U.S. to have a central generating station for electric prospects.

The San Francisco Gas and Electric Company and the California Gas and Electric Corporation merged to form the Pacific Gas and Electric Company (PG&E) on October 10, 1905. The consolidation procured the California Gas and Electric Corporation with access to the San Francisco market and ground for added financing. Following the acquisition in 1906, PG&E amassed the Sacramento Electric, Gas, and Railway Company, taking control of its railway undertakings in and around Sacramento. Within years of its incorporation, PG&E made inroads into Northern California’s hydroelectric industry through the buy of existing water repository and conveyance facilities, encompassing reservoirs, dams, ditches, and flumes built by mining dividends in the Sierras that were no longer commercially feasible.


PG&E was the most comprehensive incorporated utility system on the Pacific Coast. In 1930, the firm purchased majority stock rights in two major Californian utility systems; Great Western Power and San Joaquin Light and Power from The North American Company, a New York investment firm. In return, North American collected shares of PG&E’s common stock worth $114 million. During this period of expansion, PG&E was involved in legal proceedings with the Securities and Exchange Commission about the company’s status as a subsidiary of the North American Company. In 1957, the company bought Vallecitos Nuclear Center, the first privately owned and operated the nuclear reactor in the United States, in Pleasanton, California. In 2010, PG&E was accused of endeavoring to impede competition with Proposition 16, which required permission from two-thirds of voters to start or expand a local utility. Critics asserted that this would make it tougher for local governments to create their power utilities, effectively giving PG&E a monopoly. In December 2011, the non-partisan organization Public Campaign criticized PG&E for spending $79 million on lobbying and not paying any taxes during 2008–2010, instead of getting $1 billion in tax refunds, despite earning revenue of $4.8 billion and boosting executive pay by 94% to $8.5 million in 2010 for its top five executives. On February 28, 2002, after the collapse of Enron, which used ambiguous accounting and coalitions to hide its obligation, PG&E declared to paraphrase findings dating back to 1999, to show contracts related to power plant construction that had been formerly kept off its balance sheet. The PG&E and other investor-owned utilities that are inevitably granted monopoly status in California have safeguarded a negotiated fare rate of return on equity. It came to light that while PG&E was under felony retribution, they allotted to Gavin Newsom during his 2018 gubernatorial campaign. Gavin Newsom accepted $208,400 from the utility during his 2018 battle. Of that total, $150,000 went to a political spending group called “Citizens Supporting Gavin Newsom for Governor 2018,” while the rest went directly to Newsom’s campaign.

All said and done with, today as shutoffs arrived with just hours of warning that for most of the consumers caused Californians anguish and turmoil. But, while indeed frustrating, the shutoffs should come as no awe, while PG&E’s current state of wealth sums up to $11.1Billion.

Amidst unparalleled power outages implemented to dissuade wildfires spurred by their power cords, Pacific Gas & Electric has admitted in federal court that its equipment perhaps induced ten fires this year in Northern and Central California.

Pacific Gas & Electric Electrical transmission lines also caused the Camp Fire of 2018, which is by far California’s deadliest wildfire reported. The 4.5 million U.S. homes were identified at high or extreme risk of wildfire, with more than 2 million in California alone, 90% caused by human factors. Under its size and scarcity of competition, is certain Insurance companies are unwilling to procure liability coverage to PG&E Company. The 3rd party insurers were successful in suing the power company for the deal that covered insurance carriers, and hedge funds that were pursuing reimbursement from insurers had to be made to homeowners and businesses about fires provoked by the utility company’s negligence. Today, PG&E retains a self-administered, self-insured claims administration policy covering settlement of single-incident claims up to $10 million. However, the cost of catastrophic coverage is not incorporated in their plan, hence being charged against casualty insurance costs. Upon prevailing judgment, PG&E Agreed to pay $11 Billion Insurance Settlement over California Wildfires. Within the legal turmoil, a third group rose up with a proposal to take over PG&E Corp, in exchange to pay off its liabilities as well as other outstanding obligations, with the intent to pull the utility company out of bankruptcy. The insurance companies that say Pacific Gas & Electric owe them $20 billion under the proposals in U.S. Bankruptcy Court, calling it “the path send” to reorganize the utility.

In contrast to all said, a bill signed into law by the late governor Jerry brown in 2018, inferring that the PG&E equipment was reasonably maintained and operated, allowing services issue bonds to help pay damages, with a surcharge on ratepayers’ bills enabling to cover interest payments. Likewise, Unions remained a crucial backer of Gov. Jerry Brown’s campaign, presenting the kind of relationship that is vital for PG&E employees. Because, IBEW 1245 union represents about 12,000 PG&E employees in Physical and Clerical classifications, executing labor agreements through the years that have set the standard for the utility industry.

Not long ago, the city of San Francisco offered $2.5 billion to take over local Pacific Gas and Electric Co. power lines with unanimous backing from the city’s top elected leaders as part of a rare political coup for such a driving and expensive try. But the powerful unions opposed such transfer of power line ownership, saying it will hurt workers and hence offer was declined by Pacific Gas and Electric.

Environmental Protection Agency (EPA) and PG&E also retain their own set of controversies and finger-pointing at each other as the power company sees a tangible urgency to cut down trees that tend to erode through the channels and prevent developing subterranean power lines. In adversary, EPA is principally for protecting heritage trees in the historic neighborhoods and lobbies against developing underground power-lines.

All that described plainly points to a monopoly on gas and electricity in Northern California. A power outage is not an unusual spectacle in developing countries that do not relish the privilege of secure economic prosperity, but pondering such raw delinquency from an administration of the modern state is remote from anticipation. By the same examination, Governments across the world entertain conserving full control of the nation’s power supply and environmental safety practice. As we can substantiate by taking a glimpse at California’s history, the leftward sociopolitical system drift has been merely catalyzed the aftermath we are experiencing today. As some may contemplate, the fallout wasn’t merely because the system of free enterprise failed its citizens. But because of the prevailing double-standards put forth by assembling municipal programs on top of the supposedly capitalist footing, the kind of policies that positioned government across the table from giant forces such as the PG&E, instead of serving as quality supervision enforcer.

When you reckon the government can concede a better business bargain on your behalf, think again. Because corporations across the negotiating table have the lobbying power. And can sway the deal in any direction at any point of time.

The California administration of the past decades has tried to depict itself as a pro-small business, anti-corporation. Most of all, its front-running politicians have condemned the personification of corporations, however- concomitantly pushing for high taxes on large corporations. But, such claims have demonstrated to be contradictory to their conventional rhetoric. Aside from what was spoken of concerning the big companies, California has exhibited oppressive favoritism towards them, such as Google. For instance, the recent investigation of google on antitrust violation scheme by 48 states, California, along with Alabama, was the two states that refused to support such investigation.


report circulated by Bloomberg revealed how Apple and other vendors amass dozens of long-standing agreements with California cities that divert sales tax revenue back to the corporations.

The most significant breaks belonged to two aerospace defense companies, Lockheed Martin and Northrop Grumman. That marked the year 2014 headlines, as the lawmakers authorized a bill providing Lockheed, on a proposal to manufacture next-generation bombers for the Air Force, granting the company with a tax credit of 17.5 percent of wages paid to its workers; worth $420 million over the 15-year life of the deal.

Between the line

PG&E’s relationship with the California legislatures, along with their web of interaction with societies and consolidations, speaks for itself. It’s my opinion that Governments’ inducement by partnering up with large corporations is a multifaceted one. At the top of the roster, one can speak of their intention to conveniently micro regulate businesses and carry out aspects of social protocols without deeming the downside of their actions. That is mediating with elements that are affluent and influential enough to swivel the lawmaker’s poll through the meticulous execution of lobbying rallies. After all, what kind of covenant would that be, if the ordinance ratified will turn the table pointing in favor of the corporate cartel?!

California, San Francisco, and Pacific Gas and electronic company share an extended chronology of corner contest. And it is not startling to vouch right before our sights, the state safe harboring the old comrade. But isn’t it presumed to be about options, not obligations?!

I guess not in this case, as PG&E has been plummeting through the legal loopholes, eradicating the competition and prevailing though insolvencies are standing as another business commodity. The company has broken every aspect of reasonable business endeavors with the help of its aged compatriot!

Constitutionally PG&E has all the freedom to do everything it can to bring about as a legal entity but must not conduct business without competition. Their race is stifled with the support of the political cartel, by which they have thrived wider, corrupted beyond monopoly, brought about uninsurable by 3rd party. As an impact, consumers inevitably endure legal extortion.

Social programs on top of the capitalist base will lead to corruption and dismal failure. Administration negotiations with the corporation are erroneous. Government Partnership with large firms is prejudice and unilateral with one group of prey in the trap, called the citizens. The hypocrisy of being against corporations but engaging them is mind-blowing. In a constitutionally capitalist system with contention to enforce populous social programs, Lobbyists’ interest serving Unions is a power shift from the general population towards a class of people at the expense of taxpayer dollars.

The Golden State is utterly striving to operate as a nation, winning as a small state. Liberalism, rhetorical slogans with no base are feeble in the current state of constitutionality.

Take home message

Corruption, bribery, kickback, favoritism, corporate safe harbor, and even legal extortion in one way or another are all prevalent fads across all institutions in the world, but by no means are ethical or economically justifiable.

Solution! Let’s start with the good old advice; first,” Talk the Talk and Walk the Walk.” The government should back up its chatter with a course before exercising a double standard that results in putting the corporate interest ahead of its natives by enabling the influential entities to wield their capacity to imperil individuals, profiteer from them, instead of making a rightful profit.

Adam Tabriz, MD Dr. Adam Tabriz is an Executive level physician, writer, personalized healthcare system advocate, and entrepreneur with 15+ years of success performing surgery, treating patients, and creating innovative solutions for independent healthcare providers. He provides critically needed remote care access to underserved populations in the Healthcare Beyond Borders initiative. His mission is to create a highly effective business model that alleviates the economic and legislative burden of independent practitioners, empowers patients, and creates ease of access to medical services for everyone. He believes in Achieving performance excellence by leveraging medical expertise and modern-day technology.

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