Arthur Saginian | The Realities of Utilities

Letters to the Editor

Having read Kimberly M. Zamlich’s (Aug. 31) letter criticizing our state’s three big investor-owned utilities as well as our governor and capitalism in general, I can say that I completely understand where she’s coming from, but I also understand where THEY’RE coming from. 

Having worked as an engineer for the Los Angeles Department of Water and Power for 38 years, I learned what goes into both the cost of electric power and the price people have to pay to have it delivered to their meters. These costs are real and must be paid.

The first issue is that they are “investor-owned,” and unlike co-ops or municipal utilities they have to make a profit for their “investors.” 

Another issue is that Pacific Gas & Electric and Southern California Edison have racked up enormous losses due to the recent wildfires, and insurance will only go so far, so the pain is spread out over their ratepayers over many years. 

Finally, these are very large utilities that cover vast and varied service areas that provide for millions of customers. The cost to operate and maintain, let alone make upgrades to, these systems is staggering. The alternatives would be for them to either go bankrupt (which nearly happened back in 2000-2001 due to deregulation) or be taken over by the state because they cannot go out of business. 

As it is the state already controls, or rather manages, the “grid” in the form of the Independent System Operator, or ISO, up in Sacramento. The state, in the form of the Public Utilities Commission, also approves or denies any rate increases, but if you want to see utility prices go up even more then by all means let’s have the state take them over so they can run them like they run all of their other wasteful and inefficient programs. Mercifully, the state has absolutely no interest in “taking over” these utilities. 

By the way, as for cooperatives, they are a lot like direct democracies. They work well in smaller communities of a few hundred people, but not so well in large cities or entire regions encompassing millions. I myself put this entire scenario in the general category of “the cost of doing business in California.” 

Perhaps you might consider moving to someplace simpler, like Idaho? But you’d better do it quickly as emigration from unhappy Californians such as yourself is driving up their prices, too. 

There’s just no winning, is there?

Arthur Saginian

Santa Clarita

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