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Gov. Gavin Newsom signed into law June 30 legislation creating a state takeover of Pacific Gas & Electric if it is unable to complete its $58 billion in post bankruptcy financing by Sept. 30. If poorly maintained utility equipment causes another fire or disaster that also would trigger the takeover under SB 350 by Sen. Jerry Hill (D-San Mateo).

“No more business as usual for PG&E,” Newsom said late Tuesday. In the midst of wildfire season and a pandemic, Californians need assurance that the utility is focused on safety, he added.

The Senate Energy Utilities & Communications Committee passed an amended measure on an 8-3 vote June 29, and sent it on to the governor.

If Golden State Energy, which would be a nonprofit public utility, is launched pursuant to SB 350, “it means PG&E failed us once again,” Hill told the committee Monday. This is expected to be his final legislation because he is being termed out.

The measure also would allow the massive new nonprofit utility to bid for PG&E if the company voluntarily puts itself up for sale.

Creating Golden State Energy to take over PG&E’s 70,000 square miles of territory and serve its 16 million customers would cost an estimated $5.88 billion, according to the committee.

Sen. Brian Dahle (R-Bieber) objected to creating a large non-profit utility, with a board controlled by a majority of governor appointees. Dahle, who was the only lawmaker present without a mask, said solar lobbyists have the ear of both the state’s chief executive and Democratic lawmakers, and that solar excess on the grid is growing. He added that small public utilities are preferable, pointing to his local electric co-op with its “very reasonable rates and a system that is not burning down our communities.”

Hill stressed that the initial nine-member board would be replaced by a six-member board, with four appointed by ratepayers, one by the governor and one by the legislature.

Sen. Henry Stern (D-Calabasas) said whatever clout solar lobbyists possess is dwarfed by that of oil and gas lobbyists. If Golden State Energy comes to fruition, he said, the state’s clean energy and decarbonization goals must be front and center in its mandate.

Another committee Republican, Sen. John Moorlach (R-Costa Mesa), worried the bill was an attempt to “nationalize” PG&E.

Sen. Scott Weiner (D-San Francisco) balked at Moorlach’s assumption that a private corporation was always better than a public one. PG&E is a private company that has been around for more than a century and “it’s a complete disaster,” he said.

Weiner supported SB 350 although he objected to giving PG&E yet another chance to clean up its act. He pointed to his unsuccessful legislation that would have taken over the company by eminent domain.

Hill clarified that Golden State Energy would not be a state-owned utility, nor a possible financial burden to the state. The estimated $5.88 billion cost to establish a ratepayer-owned nonprofit would be backed by the State Infrastructure and Development Bank and repaid by ratepayers. The legislation specifies that any debt taken on by this bank is not the responsibility of the state.

Hill added that Golden State would create about $2 billion in annual savings because of not paying state tax nor double digit rates of return to shareholders.

Environmental justice and local energy advocates did not object to the amended SB 350 but insisted that their representatives be on the governance committee and on any advisory board during and after Golden State’s creation. Mary Rose Turuc, with Reclaim Our Power, noted it was too late to add such a provision to the bill but noted agreement to address this issue in legislation next year.

SB 350 places Golden State Energy under the jurisdiction of the California Public Utilities Commission. The nonprofit would have to include both a chief safety officer and risk officer. There also must be an independent safety monitor, as well as regional safety officers to manage set regions, in line with the CPUC’s decision approving PG&E's reorganization plan last month.

Golden State’s ratepayers would be required to help fund the $21 billion legislatively created wildfire fund. They also would have to pay any penalty imposed on the public utility.