Published on Thursday, October 14, 2010 by CommonDreams.org
Death and Profits: The Utility Protection Racket
Pacific Gas & Electric (PG&E) is a multi-billion-dollar privately owned, publicly regulated utility whose main function is to make enormous profits for its shareholders at great cost to ratepayers. I know this to be true; I’m one of the ratepayers.
Better than Bernard
PG&E enjoys a captive consumer market of fifteen million customers in northern and central
If northern and central California’s gas and electric services were publicly owned (yes, socialism), there would be no 11.35 percent skim off the top going to rich investors, no fat salaries and bonuses and huge severance packages pocketed by top executives, no billions of dollars in private wealth to be traded on the stock market. Customer rates would probably be one-third to one-half lower than they are today. And gas pipelines would be in better repair.
An Avoidable Catastrophe
Along with all the other expenses they bear, PG&E’s ratepayers usually pay for the enormous costs of utility accidents. This may still prove to be the case with the disaster recently visited upon
In the weeks before the catastrophe, residents had been reporting gas odors and had voiced fears about a leak. But this brought no action from the company. A state assemblyman from the
Company officials had known since 2007 that the aged pipeline serving
Then it had the gall to request another $5 million rate increase to replace the same neglected section of pipeline. The disastrous September 2010 explosion likely would have been averted if the utility had dealt with the pipeline in 2009 as originally slated.
PG&E has a history of dangerous mishaps: improper piping allowed gas to leak from a mechanical coupling in 2006; a leak in
Not in the Safety Business
This problem obtains not only in
PG&E’s CEO, Peter Darbee, formerly of Goldman Sachs (how perfect), reassured the public that he was “focused on the tragedy” in
Darbee failed to mention that PG&E is not in the safety business. Like so many big corporations, it does what it can to cut corners on maintenance. The lower the maintenance costs, the higher the profits. The corroding pipelines fit well into the picture, like the corroding infrastructure of the entire society. Safety is not a prime concern for giant corporations, if any concern at all, because safety does not bring in any money. In fact, it costs money.
Like any other multibillion-dollar firm, PG&E is first and foremost in the business of making the highest possible payoffs for its shareholders and its executives. The system works just fine for those whose real job is to skim the cream, those who do not have to pay the costs. That is the alpha and omega of modern corporate capitalism.
Capitalism at Work
Lives were lost in
Left out of the whole picture is how corporate malfeasance and corporate generated disasters are a reflection of the capitalist system. If a gas pipeline had exploded in communist Cuba, killing people and destroying homes, the incident would immediately have been treated by US commentators as evidence of the deficiencies of the broader economic system, as proof that socialism cannot do it right.
But disasters in our own society are seen simply as immediate mishaps, at worst, instances of negligence and mismanagement by a particular company, never as the outcome of a broader capitalist system that steadfastly puts profits before people, with immense costs passed along to the public.
The same is true of mining accidents, train wrecks, plane crashes, unsafe auto vehicles, unsafe consumer products and foods, toxic spills, offshore-drilling calamities and a host of other noxious things that corporate
Pressed on the matter, they might admit as much. Steel magnate David Roderick once said that his company “is not in the business of making steel. We’re in the business of making profits.” The social uses of the product and its effects upon human well-being and the natural environment win consideration in capitalist production, if at all, only to the extent that they do not violate the profit goals of the corporation.
Better Things To Do
Rather than spend money on replacing aging pipelines, PG&E—just three months before the
With thousands of miles of aging pipes to inspect and perhaps replace, PG&E continues to find other things to do. Through most of 2010, it was busy putting “smart meters” into people’s homes. The new meters do not need to be read by an employee out in the field. Instead data from residences and businesses are transmitted by a mesh network of radio signals.
Critics argue that the smart meters are too smart. They often inflate electric bills. Worse still, they may be harmful to our health. There is evidence that radio-frequency exposure is linked to cancer and other diseases. A number of ratepayers already complain of being sickened by the heavy doses from smart meters. PG&E gives reassurances that the frequencies pose no great danger but it continues to face community resistance and skeptical questions from independent investigators.
Smart meters cut labor costs. Lower labor costs do not bring lower rates for ratepayers but higher profits for managers and stockholders. Never accuse PG&E of neglect or stupidity. The company knows what it is doing. In keeping with the essence of the corporate capitalist system, PG&E exists not to serve the public but to serve itself.
Michael Parenti's most recent books are The Culture Struggle  (2006), Contrary Notions  (2007), God and His Demons  (2010), Democracy for the Few  (9th ed. 2011), and The Face of Imperialism (forthcoming March 2011). For further information about his work, visit his website: www.michaelparenti.org .
URL to article: http://www.commondreams.org/view/2010/10/14-4
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"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs