Transmission Lease Proposal to Benefit PG&E Shareholders and Leave Customers with Liabilities

On May 13, 2024, we asked the California Public Utilities Commission (CPUC) to dismiss PG&E’s request to lease up to one billion dollars of unspecified transmission assets to a third party. The application would not provide immediate benefits to ratepayers, as PG&E itself has noted, while providing cash upfront to PG&E shareholders. Under its proposed terms, the third-party – Citizens Energy Corporation – wouldbecome eligible to earn 30 years of unspecified profits from the leased equipment. However, PG&E would remain responsible for operating and maintaining the lines, as well as remain liable for any potential wildfires caused by the lines. The CPUC should reject PG&E’s application to send a clear signal that it will prioritize its time and attention on proceedings that can deliver clear benefits to the public and ratepayers.

We filed the motion to dismiss PG&E’s application for several reasons, including:

1) The application will not clearly benefit ratepayers. 

If everything goes as planned, PG&E anticipates the agreement will not deliver any direct benefits to ratepayers. PG&E is effectively mortgaging its transmission lines to generate short term shareholder cash. On the other side of the ledger, Citizens Energy Corporation will receive a PG&E’s rate of return for 30 years for effectively acting like a bank, despite it having none of the risks or operational responsibilities of a utility.

2) PG&E does not provide the information needed to make an informed decision on this issue.

The CPUC should only consider applications that show how they are just, reasonable, necessary, or in the public interest. The PG&E application does not meet this standard. It lacks critical details for the CPUC and stakeholders to evaluate the proposal, such as specific projects that will be leased or timelines to identify such projects. The application also neglects to provide key financial terms and conditions, such as rates of return, liabilities, and any built-in ratepayer protections.

3) Priority should be given to proposals that will provide benefits and/or reduce costs for ratepayers.

Granting PG&E’s request would divert attention away from more impactful solutions and pressing priorities for the CPUC, the Public Advocates Office, and other stakeholders.

PG&E’s customers face a rates crisis, with electric rates more than double what they were ten years ago, and we expect utility costs to continue to outpace inflation. The CPUC has the ability to determine where its resources are best spent and has stated that affordability is a major concern at the helm of many of its decisions.

This proposal only clearly benefits PG&E shareholders and Citizens Energy Corporation. and will do nothing to advance the public interest and address affordability.

A motion to dismiss PG&E’s application is a commonsense step forward to prioritize customer rate relief.