FYI - Some clarifying information re PG&E and Mayor Liccardo’s proposal. All the best, Catherine Begin forwarded message: From: "Liccardo, Sam" Subject: PG&E Update Date: February 4, 2020 at 10:05:21 AM PST To: "Liccardo, Sam" Friends and Colleagues, As you know, Senator Scott Weiner recently introduced legislation to facilitate a state takeover of PG&E. His action brought an immediate and strong response from some critics—including the International Brotherhood of Electrical Workers, Local 1245 (IBEW), the union that represents the majority of PG&E’s employees—asserting that Sen. Weiner’s proposal undermines protections for wildfire victims, taxpayers, city taxable income, and workers. We have concern because several media sources and elected leaders have conflated Senator Weiner’s proposal and our own. The customer-owned model that we propose differs in many critical respects from a governmental takeover, and does not implicate any of the problems that critics have identified in the state-owned model. In our extensive conversations with IBEW, their leadership fully understands the distinction between the two approaches, but others are not so clear. Among the differences between our proposal (“mutualization”) and Senator Weiner’s bill: * Ownership Structure: Customer-owned utilities—whether structured as mutual benefit corporations or as cooperatives—are not governmental agencies. They remain private corporations, albeit non-profit, just like REI, State Farm Insurance, Kaiser Permanente, USAA, and your local credit union. * Victims: IBEW asserts that a government takeover would prevent wildfire victims from gaining access to the state’s AB1054 wildfire fund. Our mutual benefit corporation would make the requisite $5 billion contribution to the AB 1054 fund, and ensure victim access. Unlike PG&E’s plan, we propose to compensate wildfire victims entirely in cash, not in PG&E stock. * Taxpayers: Our proposed mutualization does not involve costly eminent domain processes, because unlike a state takeover, the government is not the buyer. * Workers: A customer-owned company would assume all current collective bargaining agreements, with no change in the status for workers or their pensions, unlike a public takeover. * Cities & Counties: Unlike a state-owned utility, our proposed customer-owned company would pay all local property taxes and franchise fees. It would be exempt only from federal income taxation. * Customers: IBEW argues that a state takeover would likely lead to a breakup of PG&E into multiple smaller public utilities. We agree that a balkanized PG&E will be more costly and risky for ratepayers, and have urged maintaining the company as an integrated operation. From the beginning, we have declined to seek a governmental takeover of PG&E, particularly given the prohibitions of the California Constitution to State ownership of corporate equity. The coalition’s customer-owned utility constitutes the best option, in the view of many of the industry and financial experts we have consulted. Please call me on my cell phone at (408) 674-3952 if you’d like to discuss this matter further, or reach out to Mackenzie Mossing on our team, at Mackenzie.Mossing_at_(domainremoved) All the best, Sam [signature_287585131] Sam T. Liccardo Mayor, City of San José 200 E. Santa Clara Street, 18th Floor, San Jose, California 95113 p: (408) 535-4800 | e: sam.liccardo_at_(domainremoved) Connect with us: Facebook https://gcc01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.facebook.com%2FSamLiccardo1%2F&data=02%7C01%7Crhonda.hadnot%40sanjoseca.gov%7C4bd588d3442a4b258e6f08d70a0c08e7%7C0fe33be061424f969b8d7817d5c26139%7C0%7C0%7C636988919117536712&sdata=PdQ06Q0UzFK2 NNSON1jwn8qLdpOM3%2BydRhFgBMynYBI%3D&reserved=0>, Instagram https://gcc01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.instagram.com%2Fsamliccardo%2F&data=02%7C01%7Crhonda.hadnot%40sanjoseca.gov%7C4bd588d3442a4b258e6f08d70a0c08e7%7C0fe33be061424f969b8d7817d5c26139%7C0%7C0%7C636988919117546704&sdata=8HdBdNEDaAdB Jq44hs4Tz5EH5a9DWLbbcNY96F4YLQk%3D&reserved=0>, Twitter https://gcc01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.twitter.com%2Fsliccardo&data=02%7C01%7Crhonda.hadnot%40sanjoseca.gov%7C4bd588d3442a4b258e6f08d70a0c08e7%7C0fe33be061424f969b8d7817d5c26139%7C0%7C0%7C636988919117546704&sdata=R6yK%2B7kg62eKvSHTBQ qRJopRGH85%2FtgSj2vxMTm9EOM%3D&reserved=0>, Website https://gcc01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fsjmayor.org%2F&data=02%7C01%7Crhonda.hadnot%40sanjoseca.gov%7C4bd588d3442a4b258e6f08d70a0c08e7%7C0fe33be061424f969b8d7817d5c26139%7C0%7C0%7C636988919117556701&sdata=y2zPTUjZxHOCjvrdmWxezaLxjIXvIPhhm VXKqgBqSBI%3D&reserved=0> Proudly serving San José: America’s 10th Largest City & the Capital of Silicon Valley Received on Tue Feb 04 2020 - 10:12:14 PST
