Support grows for possible PG&E takeover

SAN JOSE, Calif. -- Support is growing for San Jose Mayor Sam Liccardo's recently unveiled proposal to turn PG&E into a customer-owned cooperative.

"I think the reality we all have to accept is that, as ratepayers, as customers, we are on the hook for this," said Liccardo. "If we're going to be on the hook, we better own it."

Talks about how to fund the utility takeover are still in the early stages, but the plan has now been endorsed by more than 110 elected officials from 58 cities and 10 counties across the state.

Liccardo added: "We need to let go of the delusion that someone else is going to pay for the neglect of PG&E."

PG&E filed for bankruptcy in January as it faced billions of dollars in liability claims for fires started by its equipment. Next year, a federal judge is expected to consider two competing reorganization plans: one put forth by shareholders and the other from bondholders.

However, the California Public Utilities Commission has final say, which is why Liccardo has been pushing his proposal as an alternative.

While many agree that PG&E's infrastructure and governance need to change, some aren't entirely sure the mayor's plan, in its current form, is the best overall.

RELATED: 22 mayors, including San Jose's, pushing to make PG&E customer owned

"We need to make sure that when we're looking at the governance structure, that we don't inadvertently create something that disadvantages rural people, as well as low-income people," said Santa Clara University law professor Catherine Sandoval, who previously served as a CPUC commissioner.

In general, co-ops such as Silicon Valley Power in Santa Clara tend to have favorable reviews.

"Because we're not a non-profit, we're able to maintain lower rates then PG&E. For example, our residential rates are 50% lower," said Manuel Pineda, Chief Electric Utility Officer for Silicon Valley Power.

Under the coalition's governing principles, announced Thursday, the proposed co-op would commit to keeping PG&E's service area intact.

"We are going to be paying more," said Liccardo. "The question, how much more, and who is going to benefit? Is it going to be out-of-state hedge funds, or is it going to the customers and the ratepayers in the state of California?," he asked.

A customer-owned utility has never been created at the scale of PG&E, which serves more than 5.4 million customers. The utility hasn't said much, other than that its facilities are not for sale.

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