Private profit  v. public good

Private profit v. public good

That CPUC is investigating SCE and not PWP speaks volumes about the performance of both during the recent windstorms

By John Grula 02/09/2012

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Things have been going from bad to worse for Southern California Edison (SCE) in the wake of the severe windstorm the night of Nov. 30 and early morning of Dec. 1.  The privately owned, for-profit utility has been raked over the coals at two recent public hearings, one on Jan. 12 that was organized by Congressman Adam Schiff, (D-Pasadena) and another on Jan. 26 that was held by the California Public Utilities Commission (CPUC). Then on Feb. 1, the CPUC released a preliminary report that slammed SCE for its dismal performance both during and after the windstorm. 
 
Whereas only 10 percent of Pasadena Water and Power (PWP) customers (homes and businesses) lost power during the windstorm, it is now well established that SCE customers in the West San Gabriel Valley communities of Altadena, Arcadia, La Cañada Flintridge, Monrovia, San Marino, Sierra Madre and South Pasadena experienced massive blackouts in which at least 75 percent lost power.  At both the Jan. 12 and Jan. 26 hearings, even SCE President Ronald Litzinger admitted that 75 percent of SCE customers in the area affected by the windstorm lost power.  That’s a failure rate more than seven times that of community-owned, not-for-profit PWP, even though the wind speeds in Pasadena were at least as high, and perhaps even higher, than those in the surrounding towns and cities.
 
The hearings produced other startling revelations. At the Jan. 12 hearing, Litzinger acknowledged that much of SCE’s infrastructure was built in the years immediately after World War II (therefore, it is at least 60 years old) and is reaching the end of its life. Ya think?
 
But wait, there’s more.  Also at the Jan. 12 hearing, CPUC representatives Denise Tyrell and Raymond Fugere disclosed that the CPUC’s preliminary investigation had revealed that at least one-third of the 211 SCE power poles that toppled during the windstorm were overloaded with wires and equipment. Pole overloading is a violation of state law and involves both the strength of a pole (which deteriorates over time) and its load. If SCE is found to have negligently allowed some of its poles to become overloaded, it could face penalties of up to $50,000 per violation per day.
  
The Feb. 1 CPUC report gives a lower estimate for the number of SCE poles that were overloaded, but because the report also says that SCE destroyed evidence related to damaged poles, we will never know the real number. Furthermore, CPUC investigators did not get access to damaged poles and other crucial evidence and had to rely on data from SCE to make determinations, the report said.
 
By the way, according to PWP spokesperson Erica Rolufs, none of the 30 PWP poles that went down during the windstorm did so because of overloading; the causes were falling trees and branches. The fact that the CPUC is investigating SCE, but not PWP, is a testament to PWP’s superior performance before, during and after the windstorm.
 
One of the speakers at the Jan. 26 hearing, Hans Laetz of Malibu, hammered SCE on the pole overloading issue. He presented the CPUC commissioners in attendance with a letter from Malibu’s mayor, which argues that SCE and four communications companies should together be fined $99 million for violations, including pole overloading, that probably  started the October 2007 Malibu Canyon fire. That blaze, apparently ignited by downed power lines, burned 3,800 acres and destroyed 14 homes. With the many hundreds of power lines that went down in the West San Gabriel Valley on Nov. 30 and Dec. 1, it’s amazing no major fires got started. Given how hard the wind was blowing that night, fires could have been catastrophic.
 
The solution to windstorm power outages is to put power lines underground. PWP has been in the forefront of this innovative solution since 1968, when the city first levied an “underground surtax” to pay for the undergrounding of power lines, according to Dan Rix with Pasadena Public Works. Despite this surtax, most PWP customers still pay less for their electricity than do SCE customers, according to PWP General Manager Phyllis Currie. Why? Could it have something to do with the fact that PWP is not-for- profit, while SCE is for-profit?
 
PWP has put the underground surtax to good use, and currently 74 percent of its primary power lines are underground, as reported by Eric Klinkner, PWP assistant general manager. This high percentage of primary power lines underground probably helps explain why only 10 percent of PWP customers lost electricity during the windstorm. What percent of SCE’s primary power lines in the West San Gabriel Valley are underground? So far, SCE has not been able to provide me with an answer to this question.
 
Is it not the case that privately owned, for-profit utilities like SCE will always have a huge conflict of interest and be more concerned with profits than with maintaining and upgrading its infrastructure? I’ve said it once and I’ll say it again: Let’s hear it for community-owned utilities! n

John Grula, PhD, is affiliated with the Southern California Federation of Scientists.

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Comments

I appreciate Mr. Grula's interest in SCE and its infrastructure but he is, to use an apropos phrase, 180 degrees out of phase.

PWP does not have any of the issues that SCE does. They are not held to the same regulations and oversight. They do not have to supply power over the entire geography of southern California to rural and mountain areas and widespread urban areas covering hundreds and hundreds of miles. They do not have the large demographic challenges that SCE does such as a massive lower-income base. SCE also does not get to hide costs for legal, right of way, permitting, HR and numerous other functions that the city absorbs elsewhere. They are subject to regulatory accounting costs, fuel costs, taxation and much more the city is not. The scope of the service area for SCE is simply not compatible with a small urban city.

Just one example of how "out of phase" is the contention SCE destroyed evidence. The idea was to restore power to its customers. Common sense should tell you that means poles destroyed by an act of God had to be moved out of the way. It should also tell you that at that point dedicating massive numbers of men and equipment to somehow preserving what has been chain sawed and removed would have delayed the restoration of power.

I have been in this industry since 1972 working for contractors to shareholder owned, municipal, and co-op utilities nationwide. In my experience SCE does a much better job than other utilities elsewhere.

posted by Tim on 2/11/12 @ 04:08 p.m.

Cameras are wonderful things ... so is documentation. For that matter even, Google Earth is an excellent example of recording an infrastructure ... just cell phone pictures alone of a downed pole (or several dozen, before getting chopped up and hauled away) would provide sufficient evidence as to whether SCE is appropriately maintaining the infrastructure it's legally responsible for. How much extra time does that take?

Fundamentally, its not only a quality-control issue, but also one of cost-effectiveness. Ultimately, it yet sounds to me that the expansive outsourcing of public utilities to private corporations ends up costing 99 percent of most "poorer" populations more money.

In the end, PWP customers (even the poor ones) mostly retained power and experienced more comprehensive disaster-relief, and SCE customers suffered much more severely. Can we postively blame this particular circumstance on the "socialism" of government-managed public works?

DanD

posted by DanD on 2/11/12 @ 07:38 p.m.
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