Back in 2010, right after the San Bruno explosion killed 8 people, PG&E threatened to make its California customers pay the cost of reparations and reconstruction. But that would make those customers accessories to manslaughter (the crime with which PG&E could have been charged). There are laws on the books in any state in the US which say that anyone who contributes money to an organization, some of whose actions constitute felonies, become accessories to those crimes after the fact.
Today, at the end of 2012, PG&E's threat has become a reality. The California Public Utilities Commission (CPUC) has agreed to allow PG&E to pass on 65% of the costs of the damage and compensation, that is, the costs of its criminal negligence, to its customers. In other words, the CPUC has approved our becoming accessories to PG&E's malfeasance, its "debt to society," as it were. It makes us victims as well as accesssories to that criminality. Nowhere else in this economy are customers required to pay for the crimes of those from whom they buy goods.
If we are to maintain our honor as law-abiding people, we must decline this opportunity to contribute to PG&E's transgressions. But that will require more than simply refusing to pay the toll for that corporation's destructions. It will require organizing to make any refusal feasible and effective.
It is for that purpose that I propose the organization of "rate-payer's unions" by which customers could defend themselves against PG&E's threat. I use the term "union" in its traditional sense of an organization whose purpose is to fend off autocratic control, give people a voice in their own affairs and destiny, and democratize the social domain in which they find themselves. The essential effect of rate-payer's unions would be to democratize utility rates. And it will give neighborhoods as sense of their sovereignty, a sense of the political power people can have.
Here is the problem with PG&E's economics. It is a privately held corporation with monopoly power over people as a "public" utility. As a private corporation, it has stockholders and investors. Those stockholders have been attracted to this corporation under the assurance that they will receive an 11% return on their investment. That's right! The CPUC acts not only to establish utility rates to meet PG&E's costs of production, which would be fair, but it also acts to guarantee that high level of return for the investors (at our expense), regardless of whether PG&E's operations are efficient or not, humane or not, criminal or not.
To the extent the San Bruno explosion occurred because money's needed for testing and maintenance of equipment, for the renewal of obsolete or rotting delivery systems, were paid instead to the stockholders in fulfillment of that guarantee, it signifies that for PG&E, investor returns are more important than the safety of society. Because of that, 8 people are dead and some 34 houses were destroyed or rendered uninhabitable.
If PG&E's crimes are committed in the name of benefit to the investors, then it is the stockholders and other investors who should bear any compensatory responsibility. Simply by investing, the stockholders have tacitly agreed to accept the risks of loss of earnings or of capital in the event of market fluctuations or faulty management. Thus, it is the investors who should take responsibility in their misplaced confidence in that management. For the utility to extract a single penny for reconstruction or compensation purposes from people who have not agreed to accept that liability is to commit another wrong. It is to hold bystanders responsible for a contract that they never signed.
So we, the people, need a means of defending ourselves not only against the criminality of PG&E (with the complicity of the CPUC), but also against our being used to bailout the investors through increased utility rates. For that, we will need to organize some form of customer's union.
Here's how the rate-payer's union would work.
People in a neighborhood, perhaps an area of 4 or 5 blocks, would simply have to meet, and discuss among themselves what they think would be a fair rate to pay for gas and electricity. These meetings would constitute Neighborhood Rate-payer's Assemblies (NPA) for those blocks. Each sector of a city, whether in small groups or contiguous neighborhoods, could form its own NPA, and meet to discuss the question of a fair rate to pay. And these discussions would accomplish, for their participants, a separation between utility rates and arbitrary charges for ancillary or nefarious purposes.
As stated above, money paid to an organization that commits a felony renders the contributor an accessory. Such contributions have a different character from a standard utility bill. The bill is payment to the utility for electricity and gas delivered as a market transaction. Any money that a customer would give the utility above and beyond that market transaction, which includes the cost of production and administration, would be for stockholder earnings, or for bailout.
The purpose of a NPA discussing the issue of a fair rate to pay would be to establish what rate people should pay if their transaction with the "public" utility were to be rendered totally honest. It would be the first step toward democratizing utility rates.
Now, nothing in the concept of neighborhood assembly implies that they all have to come up with the same evaluation of utility costs, or what would constitute a "fair rate." One NPA might think it sufficient to go back to the rates prior to San Bruno. Another might think it legitimate to return to rates being paid before the 2001 "energy crisis," caused by Enron's finagling. Still another might do research into the actual costs of production of energy in California, and decide that the 1979 rate would be a "fair rate." The main thing would be that people get together and take the issue "by the horns" as it were. That is, pay that autonomously decided "fair rate" in concert.
The question of legality arises. It is legal for people to meet and discuss anything they want, and make decisions. The real question is whether it would be legal to act on those decisions, the punishment for which (in this case) would be discontinuance of service. Legally, the only basis upon which a public utility can cut off service to a customer is for non-payment of a bill or tampering with equipment. The utility does not have the legal right or authority, under California law, to cut off power to a customer for partial payment of the bill.
Now,realistically, what would a utility like PG&E do in the face of several dozen NPA's paying less than the amount billed, openly doing so in order not to pay for PG&E's crimes, nor be the source of bailout for PG&E's investors? Faced with such a mass uprising against the company's impunity, PG&E would have to negotiate. And that is the purpose of a union in the first place, to bring capital to the negotiating table.
What would be practically assured would be media exposure. Because the democratization of utility rates is an entirely innovative concept, as soon as a number of neighborhoods organized for that purpose, it would become a media event. In the face of such meetings, other people would begin similar organizational moves in other areas. If a dozen or so NPA's coordinated their shift to democratized rates, simply on the basis of fairness, the idea would spread like wildfire.
By democratizing utility rates, utility customers would be achieving three tremendous goals. They would be saving themselves money, they woud be saving themselves from becoming accessories to corporate crime, and they would be defending themselves against the corporation's using them to bail itself out with respect to its shareholders, who should be the ones holding it responsible for its malfeasance, or criminal activity.