Fed Up With PG&E, California Mayors Pitch Customer-Owned Power Co-Op

The move would lower costs for customers and shift the company's priorities away from paying dividends to shareholders, they wrote.

Twenty-two mayors, as well as other city leaders, from across Northern California are behind a bold proposal to turn the region’s troubled Pacific Gas & Electric into a publicly owned cooperative.

In a letter to the California Public Utilities Commission shared Tuesday, the mayors and city supervisors argued that PG&E ― beset by massive bankruptcy and public outrage over its role in deadly wildfires and mismanaged forced power outages ― would function better as a customer-owned utility than a business focused on paying dividends to its shareholders.

The letter, organized by San Jose Mayor Sam Liccardo, comes as PG&E’s fate rests in the hands of a federal bankruptcy judge, though the CPUC must vote to approve any final reorganization plan submitted to the court.

“A cooperative financial structure will save ratepayers many billions of dollars in financing costs over this next decade,” the letter read. “A customer-owned PG&E will better focus its scarce dollars on long-neglected maintenance, repairs and capital upgrade, and mitigating some part of the substantial upward pressure on rates.”

A co-op would save ratepayers money over the next decade, the city leaders estimated, because it would be exempt from federal taxation and wouldn’t be burdened with having to pay its shareholders.

Several critics, including California Gov. Gavin Newsom (D), have laid in on PG&E in recent weeks for its history of prioritizing profits over public safety. The state’s worst wildfires in recent years have been linked to the company’s failing infrastructure and failure to cooperate with state regulations, such as its poor record-keeping on problematic power lines and transformers.  

When the company cut power to millions of residents last month during high fire risk weather conditions, Newsom and others slammed PG&E for having to take such drastic measures to solve a problem of its own making.  

Noticeably missing from the letter’s signatories is San Francisco Mayor London Breed, whose city has the second largest population in PG&E’s service area. 

Jeff Cretan, her communications director, said she remains focused on the city’s idea to buy San Francisco’s electrical grid from PG&E ― an offer the company has so far rejected.

“We have discussed Mayor Liccardo’s plan with him and we believe our approaches are not mutually exclusive,” Cretan said.