You know, usually when we do these deep dives,
we're looking at a tech giant or maybe a specific
historical one. We analyze the strategy, the
market, the fallout. Right. But today... Today,
I feel like we're looking at a ghost story. A
ghost story. That's an interesting way to frame
a utility company. I mean, looking at the stack
of sources you sent over, we have NTSB accident
reports. We have bankruptcy court filings. We
have these dusty archives from the 1850s. We
have a lot. It feels less like we're analyzing
a corporation and more like we're reading the
biography of a monster. A monster that built
the world we live in, sure, but one that keeps
consuming the people it's supposed to serve.
That is a dark way to start. But looking at the
data, it's not an unfair characterization. We're
talking about Pacific Gas and Electric, PG &E.
The entity that powers California. The entity
that is California in so many ways. You really
can't tell the history of the Golden State from
the gold rush to Silicon Valley AI data centers
without telling the story of this one specific
company. And it's such a story. It is. It's a
story of engineering, genius, absolute monopoly
power. and negligence on a scale that is genuinely
hard to comprehend. And that's the mission today.
We're going to unpack 121 years of history. We're
going to try to figure out how a company that
started with the motto, let there be light, ended
up pleading guilty to 84 counts of involuntary
manslaughter. It's a wild arc. We're going to
cover the gas wars of the 1800s, the nuclear
hubris of the Cold War, the poisoning of Hinckley.
And the financial and physical fires that...
are currently threatening to burn the whole state
down. Yeah, that pretty much covers it. So let's
get into it. And I want to start where the sources
start. San Francisco, 1850. Okay, picture this.
San Francisco in the early 1850s is. It's not
the tech metropolis we know. It's a boomtown
in the mud. Just exploded out of nothing because
of the gold rush. Exactly. The population just
mushroomed, but the infrastructure hadn't caught
up at all. The sources describe it as literally...
Dark. Pitch black. You have to remember, this
is pre -electricity. There's no moon. You can't
see your hand in front of your face. And that's
not just an inconvenience. It's dangerous. It's
incredibly dangerous. Crime is rampant. People
are literally falling into holes in the boardwalks
and drowning in the mud and into this darkness.
Come the Donahue brothers. Peter, James, and
Michael. These guys are classic industrial pioneers.
They ran a foundry, a shipbuilding operation.
They were iron men. And they looked at this muddy,
dangerous city. And saw a massive opportunity.
In 1852, James Donahue goes to the city council
and says, I can fix the darkness. I can bring
you brilliant gas. Brilliant gas. It sounds like
a magic trick. It kind of was. We should probably
explain what that actually means because it wasn't
the natural gas we use today. Right. This is
something else entirely. This was coal gasification.
They would take coal, bake it in a retort, which
is, you know, basically a sealed oven without
oxygen until it released these volatile vapors.
And that's what you burn. Almost. Then they have
to scrub out the tar and sulfur mostly and pipe
that flammable gas through the streets. It sounds
incredibly dirty. Oh, it was filthy. It smelled
terrible. The byproduct was toxic coal tar. But
compared to a whale oil lamp. It was a miracle.
It was a miracle. They incorporate on August
31st, 1852, the San Francisco Gas Company. And
I love that you flagged their corporate seal
in the notes. Fiat Lux. Let there be light. It's
very biblical. It feels like they weren't just
selling a utility. They were selling civilization
itself. They absolutely were. When they turned
on the first streetlights on February 11th, 1854,
it was a huge event. A gala. Right. A banquet
at the Oriental Hotel. People were toasting the
conquest of the night. It completely changed
the social fabric of the city. Shops could stay
open later. You could walk home without getting
mugged. Or at least you could see the mugger
coming. But here's the thing about conquering
the night. It's profitable. Insanely profitable.
And usually when something is that profitable,
you get competition. Right. And this brings us
to the first major insight from the history of
PG &E. the inevitability of monopoly, because
they did not have the market to themselves for
very long. No. Capitalism hates a vacuum. You
had other players enter the scene. The city gas
company. Right. Back by the Bank of California,
which was the biggest financial powerhouse in
the West. And suddenly you had the gas wars.
The gas wars of the 1870s. This wasn't just a
polite business rivalry. I mean, you had these
companies digging up the same streets, laying
parallel pipes. That seems incredibly wasteful.
It was. Totally inefficient. And it highlights
a fundamental economic reality of utilities.
It makes no sense to have three different gas
pipes running to the same house. The capital
costs must have been astronomical. Exactly. It's
what economists call a natural monopoly. The
infrastructure is just too expensive to duplicate.
So what happened? Did one of them win? The same
thing that always happens in utility history.
They stopped fighting and they merged. In 1873,
they combined to form the San Francisco Gaslight
Company. So that's the DNA of PG &E right there.
Consolidation. It's the core of the business
model. Whenever competition rises, you either
buy it or you merge with it. Rinse and repeat.
But then a new threat appears on the horizon.
And this one isn't another gas company. No, it's
the light bulb. 1879. Exactly. And this is a
fascinating nugget I found in their commissioned
history. San Francisco actually had the first
central generating station for electric customers
in the entire United States. Wait, really? Before
New York? I always associate Edison and the Pearl
Street station with the beginning of the grid.
San Francisco beat them to it, technically. It
was the California Electric Light Company. They
were selling arc lighting, which is this incredibly
bright, kind of harsh light to businesses. Yeah,
and the gas guys. They were terrifying. I can
imagine. It's like Blockbuster watching Netflix
launch. Precisely. They looked at this wire and
realized, if we don't own this, it will bury
us. So more mergers. More mergers. The gas companies
started buying the electric companies. But, and
this is the crucial pivot point in the story,
the real power, the real juice wasn't coming
from the city. It was coming from the mountains.
Yes. This is where the Pacific part of PG &E
really comes in. Up in the Sierra Nevada mountains,
you had these guys like John Martin and Eugene
DeSabla. These two sound like characters out
of a Western movie. They essentially were. They
were building hydroelectric plants. But not for
cities, initially. For the gold mines. Right.
Mines need massive amounts of energy to run stamp
mills and pumps. But as the mines started to
play out, or as the hydro capacity exceeded what
the mines needed, Martin and DeSable had a realization.
We have all this power up here in the mountains,
and all the people are down there in the city.
Exactly. But there was a huge problem. Distance.
Distance. You couldn't transmit electricity that
far back then. The physics just didn't work.
The voltage would drop to zero due to resistance
before it got anywhere near the bay. But they
figured it out. They took a massive gamble on
high -voltage transmission. They built a 140
-mile line from the Colgate powerhouse all the
way to Oakland. 140 miles. At the time, engineers
said it was impossible. It couldn't be done.
But it worked. It worked. And suddenly, the entire
economic model of power generation shifted. How
so? Well, the city companies were burning coal
to make steam, to spin turbines to make electricity.
That's expensive. You have to buy the coal, ship
it in. Whereas Martin and DiSablo were using...
Falling water, which is free once you've built
a dam in the powerhouse. So the cheap mountain
power wins. It wins big. The marginal cost of
hydro is near zero. So in 1905, Martin and DeSable's
outfit merges with the San Francisco gas giants.
And that's the birth. And on October 10th, 1905,
the Pacific Gas and Electric Company is officially
born. 1905. So pause here for a second. They've
successfully consolidated everything. They control
the gas. They control the city's electricity.
They control the cheap hydro from the mountains.
They are the undisputed kings of California energy.
They're sitting on top of the world. And then
six months later. The world ends. April 18th,
1906. 5 .12 a .m. The great earthquake. It's
hard to overstate the violence of this event.
The ground didn't just shake, it liquefied. In
the city, the gas mains, those iron pipes we
talked about earlier, they just snapped like
twigs. And when you snap a gas main in a city
made of wood. You get an inferno. Yeah. The earthquake
did the damage, but the fire did the destroying.
PG and infrastructure was decimated. Their headquarters
on Post Street, gone. All the records burned.
The substations, rubble. I was reading the account
of the employees. They were literally trying
to fight fires with their bare hands to save
the generation stations. But the water mains
were broken, too. It was a complete apocalypse.
It's amazing the company survived it all. But,
and this is the key insight from this part of
the story. This disaster actually cemented PG
&E's monopoly forever. How does an apocalypse
help a business? That sounds completely counterintuitive.
Because of where their assets were. Remember
the merger? They had just bought all those hydro
plants up in the Sierras. And the earthquake
didn't hit the Sierras. Not at all. So the city
was destroyed, but their main power source was
fine. Ah. So there's smaller competitors in the
city. They were completely wiped out. Physically
and financially. They had no assets left, no
way to make money. PG &E still had generating
capacity. They still had revenue coming from
other parts of the state. They were the only
entity with the capital and the surviving infrastructure
to actually turn the lights back on. Survival
of the biggest. It was the ultimate stress test.
And it proved that a centralized, integrated
regional grid was more resilient than a bunch
of disconnected local plants. It gave them the
moral and political license to expand even further.
And expand, they did. The period from, what,
1910 to 1930 reads like a game of Monopoly where
one player just buys every single... property
on the board. It was a massive buying spree.
They bought up the water rights, the old mining
ditches, the small town electric companies in
the Central Valley, and they started building
big infrastructure. This is the era of the super
inch. The super inch. Sounds like a weapon from
a sci -fi novel. It was a weapon of commerce
for sure. Yeah. By the late 1920s. San Francisco
was running out of capacity for manufactured
gas, but they found these massive natural gas
fields down in Kettleman Hills and even further
in Texas. In the distance problem. How do you
get the gas all the way to the Bay Area? You
build a 34 -inch diameter pipeline. Yeah. At
the time, 1930, it was the largest high -pressure
gas transmission line in the world. They trenched
it through mountains, under rivers. It was a
true engineering marvel. And this sets the culture,
doesn't it? The sources keep coming back to this
engineer's mindset. We can build anything. We
can conquer any geography. That is the command
and control philosophy. Nature is something to
be tamed. If there's a river, damn it. If there's
a mountain, tunnel through it. If there's a distance,
you span it with wire. And for 50 years, it worked
brilliantly. It made California the economic
powerhouse it is today. There's no question about
that. But that philosophy assumes that nature
is static. It assumes the ground won't move,
the climate won't change, and that the people
won't fight back. And as we move into the post
-war era, all three of those assumptions start
to crumble. They really do. Let's talk about
the atomic age. Because PG &E wasn't content
with just gas and hydro. They wanted to split
the atom. Everyone did in the 50s. It was the
new frontier. Power too cheap to meter. That
was the slogan. And PG &E, true to form, wanted
to be first. Of course. In 1957, they brought
the Vecitos Nuclear Center online. It was the
first privately funded atomic power plant in
the United States. They were riding high, but
then they tried to build at Bodega Bay. A beautiful
fishing village. Right on the San Andreas Fault.
Wait, literally on the fault? Like, uncomfortably
close. And this is where they hit the first real
wall of the modern era, the environmental movement.
This wasn't just NMBYs, not in my backyard, right?
This was something new. It was the birth of organized
environmentalism, the Sierra Club, local activists.
They fought PG &E to a standstill. And for the
first time, PG &E had to back down. They abandoned
the Bodega Bay project. That must have been a
massive blow to their ego. They weren't used
to hearing the word no. So they moved down the
coast to Diablo Canyon. And walked right into
an even bigger buzzsaw. Yeah. Construction started
in 1968. It didn't fully open until the mid -80s.
Why the huge delay? Because after they'd already
started building, they found another earthquake
fault right offshore. The Hosgree fault. You
are kidding me. They started building a nuclear
plant and then found the fault line. It was a
geological surprise. A big one. And it led to
massive retrofits, billions in cost overruns
and the largest anti -nuclear protests in American
history. The sources mentioned 1900 arrests in
a single two week period in 1981. Think about
the optics of that. In 1906, PG &E is the hero
rebuilding the city from the ashes. In 1981,
they're the monolith arresting grandmothers who
are terrified of a meltdown. The public trust
had just evaporated. Completely. And while everyone
was looking at the nuclear plants, staring at
these giant cooling towers, something much more
insidious was happening in the desert. Something
you couldn't see. Hinkley. Hinkley. I think most
people know the name because of Julia Roberts.
The movie Erin Brockovich. It's a great movie.
But the reality is so much grimmer than what
you see on screen. Walk us through the science
here. Because the movie focuses on the legal
drama, but I want to understand the mechanics.
What exactly did they do? Okay. So PG &E has
these massive gas pipelines, like the Super Inch.
To keep the gas moving, you have to compress
it at regular intervals. Right, at compressor
stations. And compressing gas creates a ton of
heat. So they have these huge engines that need
to be cooled. Like a radiator in a car. Exactly.
And just like a radiator, you use water in cooling
towers. But water causes rust corrosion. So to
keep the machinery from corroding, they added
a corrosion inhibitor to the water. Texavalent
chromium. Chromium -6. It's incredibly effective
at stopping rust. It's also a potent carcinogen.
And what did they do with this contaminated water
after it cycled through the towers? For 14 years,
from 1952 to 1966, they took this cooling water.
loaded with chromium -6, and just discharged
it into unlined ponds. Unlined, meaning it just
goes straight into the dirt. Straight into the
dirt and then down into the aquifer, the groundwater.
How much are we talking about? Roughly 370 million
gallons of it. And the people of Hinkley, they
were all on well water. They were drinking it,
they were bathing their kids in it, they were
filling their swimming pools with it. And this
is where the chemistry gets really insidious.
What do you mean? Well, chromium -6 is structurally
very similar to sulfate. Why does that matter?
Because human cells have active transport channels
specifically designed to pull sulfates inside
the cell. Yeah. We need sulfates for various
functions. Okay. Chromium 6 hijacks that pathway.
It tricks the cell into letting it in. And once
it's inside, it reacts. It turns into a different
form, chromium 3. And in that chemical process,
it shreds the DNA. It's a Trojan horse on a molecular
level. That is absolutely terrifying. And PG
knew it was dangerous. The internal memos suggest
they knew it was toxic. But the cover -up is
what really damns them in the sources. They didn't
report the contamination to the regional water
board for years. And when they finally did...
They launched this PR campaign to tell the locals
that chromium -6 was actually good for them.
Good for them? How do you even begin to argue
that? They compared it to the chromium you find
in multivitamins, which is chromium -3. A totally
different, benign thing. It was purposeful scientific
gaslighting. Which leads to the lawsuit, the
$333 million settlement. Which at the time was
the largest direct action settlement in U .S.
history. But the money didn't run the town back.
It's a ghost town now. It really is. I looked
at the recent satellite imagery. It's just empty
grids where houses and farms used to be. It feels
like this is the turning point in the whole story.
Before Hinckley, PG &E was a builder. After Hinckley,
they were a defendant. It changed the adversarial
relationship forever. But right as they were
trying to write the check for Hinckley, the 2000s
hit. And the financial floor just fell out from
a... The energy crisis. I remember the rolling
blackouts. My power went out all the time. The
2001 crisis is a perfect example of a Frankenstein
regulatory system. California decided to deregulate
the market. Sort of. Sort of? Seems to be doing
a lot of heavy lifting in that sentence. It is.
They forced PG &E to sell off their gas power
plants, the things that actually make the electricity.
So PG &E became just a wires company for a lot
of its supply. They had to buy power from the
open market. OK, so they buy low, sell high.
No, that's the trap. They had to buy at market
price, which fluctuates wildly. But the state
law said they could only sell to you and me at
a fixed price. Oh. I see the problem immediately.
If the market price goes above the fixed price.
They lose money on every single light switch
that gets flipped. And then you had Enron. The
smartest guys in the room. Enron and other traders
realized they could game this broken system.
They engaged in these schemes with names like
Fat Boy and Death Star. What were they doing?
They would purposefully congest the transmission
lines or take power plants offline to create
artificial shortages. Supply goes down, price
goes up, basic economics. Except they took it
to an extreme. The price of wholesale electricity
went from about $45 per megawatt hour to over
$1 ,400. And PG &E couldn't raise its rates to
cover that. They were legally frozen. They were
bleeding billions of dollars a month. They were
completely insolvent. So in April 2001, the mighty
monopoly filed for Chapter 11. Bankruptcy number
one. The state eventually had to step in. It
cost taxpayers and ratepayers something like
$45 billion to clean up the mess. But here's
the key takeaway. When PGE emerged from bankruptcy
in 2004, they were a different company. How so?
They were leaner. They were desperate to cut
costs to pay back their creditors. And when a
utility is desperate to cut costs, what gets
cut first? Maintenance, inspections, record keeping,
all the boring, unglamorous stuff that keeps
people safe. Which brings us to a quiet afternoon
in San Bruno, September 9, 2010. This is one
of those moments that divides California history.
There's before San Bruno and after San Bruno.
Set the scene for us. It was a residential neighborhood.
Crestmoor Drive. People were coming home from
work. Kids were playing. People making dinner.
And under the street ran Line 132, a 30 -inch
natural gas transmission pipeline. Installed
in 1956. Right. And at 6 .11 p .m., it ruptured.
But it didn't just crack or leak. It exploded
with such force that it registered as a magnitude
1 .1 earthquake. Wow. It launched a 28 -foot
section of pipe weighing 3 ,000 pounds into the
air. It landed 100 feet away. That is horrific.
3 ,000 pounds of steel flying through a neighborhood.
The crater it left was 72 feet long. Eight people
died. 38 homes were completely destroyed. And
the fire burned for hours because PG &E couldn't
find the manual shut -off valves in their own
system. And the investigation. This is where
the negligence part of our story really cements
itself. It wasn't an accident, was it? The NTSB
report is just. It's scathing. It found that
the section of pipe that failed had defective
welds. It didn't even meet the standards of 1956
when it was first put in the ground. So it was
a time bomb from day one. Essentially. But the
real scandal was the records. PG &E didn't know
the pipe was defective. They didn't even know
what kind of pipe was in the ground. Their internal
database listed that section as seamless pipe,
which is very strong and modern. In reality,
it was pieces of scrap pipe with a shoddy well
down the side. So they were operating a high
pressure line based on a complete fantasy of
what was actually underground. Exactly. They
had cut funding for inspections. They had prioritized
financial performance over a culture of safety.
The NTSB chairman called it a dismal history
of oversight. And they were charged criminally
for this. Yes. They were convicted of multiple
felonies and put on criminal probation. A federal
judge appointed a monitor to watch their every
move. A utility company on probation. That feels...
That feels significant. It is. But as bad as
San Bruno was, it was still a localized disaster.
It was one neighborhood. What was coming next
was regional. It was statewide. The wildfire.
The wildfire era. This is where climate change
collides with that aging infrastructure we talked
about. All those deferred maintenance decisions.
It seems like it started slow and then suddenly
happened all at once. It did. 2015, the Butte
fire. A tree hits a power line. 2017, the North
Bay fires. 13 separate fires confirmed to be
caused by PG &E equipment. But 2018? 2018 changed
everything. The Camp Fire? November 8, 2018.
The deadliest and most destructive wildfire in
California history. It virtually wiped the town
of Paradise off the map. 85 people died. 18 ,000
structures destroyed. And the cause, I remember
hearing it was something small. It was a C -hook.
Explain that. What is a C -hook? It's a small
piece of cast iron hardware on a giant transmission
tower. It basically looks like the letter C,
and it holds the insulator string that holds
the wire. Okay. The specific hook that failed
was purchased and installed in. Recorded. 1921.
It was nearly 100 years old. It had been hanging
there, swinging in the wind, grinding against
a tower arm for 97 years. It just wore through.
It broke. The high voltage line fell against
the tower. It sparked. And because the vegetation
was bone dry from years of drought, Paradise
burned. A hundred year old hook. It goes right
back to that build it big era. They built it
and then they just left it there. They deferred
maintenance. They focused on profits. They missed
the wear patterns during inspections. And PG
&E. admitted guilt? They pleaded guilty to 84
counts of involuntary manslaughter, one for each
person who died in the fire where they could
identify a cause of death. I just want to pause
on that again because it is so shocking. A publicly
traded corporation pleaded guilty to killing
84 people. It is completely unprecedented. But
financially, the Camp Fire triggered something
even bigger than the criminal charges. It triggered
Inverse condemnation. OK, we need to unpack this
term because I'm guessing the listener isn't
a lawyer. What is inverse condemnation? It's
a legal doctrine that's pretty unique to California
and it's derived from the Constitution. You know
how the government can take your property for
a highway, but they have to pay you for it. Right.
That's eminent domain. Or condemnation. Inverse
condemnation is when the government takes or
damages your property without asking first. In
California, courts have ruled that utilities
like PG &E are acting as agents of the state.
Okay. So if their equipment starts a fire that
burns down your house, they have effectively
taken your property and they have to pay for
it. Okay. But what if it wasn't really their
fault? What if a tree branch flew a mile in a
hurricane and hit the line? What if it was an
act of God? It doesn't matter. And that is the
absolute kicker. It's strict liability. Yeah.
Even if PG &E followed every single safety rule
perfectly, if their equipment ignited the fire,
they are liable for 100 % of the damages. Wow.
So they are essentially the insurance company
for the entire state's fire risk. Precisely.
And in the era of climate change, that risk has
become uninsurable. Facing $30 billion in liabilities
from the Camp Fire and other fires. PG &E completely
collapsed. Bankruptcy number two, January 2019.
And this bankruptcy was even messier and more
complex than the first one. Because now you had
tens of thousands of victims, people who lost
their homes, their businesses, their family members,
fighting against Wall Street hedge funds for
the scraps of the company. And the settlement
they reached. This is the most dystopian part
of the entire story to me. It is a true paradox.
They agreed on a 13 .5. billion -dollar settlement
for the fire victims. But PG &E didn't have that
much cash. So how did they pay them? They paid
about half of it in PG &E stock. So the victims
of the fire became the owners of the company
that started the fire. They now own about 22
% of PG &E. That creates a terrible, terrible
incentive structure, doesn't it? It's completely
perverse. If you're a victim, you need your payout
to rebuild your life. For your stock to be worth
anything, PG &E has to be profitable. So you
find yourself in this position where you might
be rooting for the company to raise rates or
cut costs just so the stock price goes up enough
for you to get your money back. It turns the
victims into, in a strange way, accomplices.
It ties their fate directly to the fate of the
monster that destroyed their lives. So we're
in the modern era now, post -bankruptcy number
two. They're trying to prevent the next paradise.
And one of their main tools is something that
drives everyone in California crazy. PSPS. Public
safety power shutoffs. Turning the power off
before the wind blows. It's a brute force solution.
It really is. They basically realized they couldn't
trust the 100 -year -old hooks. They couldn't
inspect every inch of their massive grid in time.
So the only way to be 100 % sure a line doesn't
start a fire is to de -energize it. But the impact
of that. It's massive. Yeah. In 2019, they shut
off power to millions of people for days at a
time. Schools closed. Businesses lost inventory.
People who rely on medical devices were terrified.
And they completely botched the execution, right?
Oh, completely. Their website crashed because
everyone tried to check the maps at once. The
maps were inaccurate. They hadn't coordinated
with local emergency services. It was chaos.
The state fined them over $100 million just for
how badly they communicated it. It feels like
they're trapped. If they leave the power on and
a fire starts, they go to prison and go bankrupt.
If they turn the power off, the state screams
at them and the public hates them. That is the
corner they are painted into. Which brings us
to the only real permanent solution. The gold
standard for safety. Undergrounding. Burying
the lines. If the wire is five feet under the
dirt, a tree can't fall on it. The wind can't
blow it into dry grass. Problem solved. So why
haven't they done it already? It seems obvious.
Money. How much money are we talking about? Okay,
let's do the math. In 2021, they announced a
plan to bury 10 ,000 miles of distribution lines
in high -fire risk areas. 10 ,000 miles? That
is a lot of digging. It's roughly the distance
from San Francisco to London and back. The cost
estimates vary, but it's generally cited at around
$3 to $4 million per mile. So, $40 billion. Give
or take. Now, PG &E claims they can get the cost
down to closer to $2 million a mile through economies
of scale. But even at $20 billion, that is a
staggering amount of capital. And here's the
question. Who pays for it? The ratepayers, us.
Exactly. And PG &E rates are already some of
the highest in the nation. They're about 80 %
higher than the national average. People are
already struggling to pay their power bills.
So you have this fundamental tension. How much
safety can we actually afford? And it seems like
the government is realizing the ratepayers can't
handle it alone. I saw in the notes that the
Department of Energy just stepped in. Yes, just
recently, in December 2024, a $15 billion federal
loan. That sounds like a bailout, doesn't it?
Well, they call it a low -interest loan to upgrade
the grid and support renewables. But let's be
real. It's a lifeline. It's the federal government
admitting that PG &E is too big to fail. Yes,
it is. It serves 16 million people. The fifth
largest economy in the world, California, cannot
function without it. So Uncle Sam is stepping
in to backstop the risk. And amidst all this,
they're trying to rebrand. They moved their headquarters.
Yep. They left a historic complex in San Francisco,
the one right near where the 1906 quake hit,
and moved to a fancy new building in Oakland.
It's all symbolic. We're leaving the old PG &E
behind. But can you really leave it behind when
the culture might be the problem? We have to
talk about executive pay because that always
riles people up. Patty Pop, the CEO. In 2021,
her total direct compensation was valued at over
$50 million. $50 million! While the company is
on federal probation, while wildfire victims
are waiting for stock checks, how do they possibly
justify that? The corporate argument is, this
is the hardest job in America. You are running
a company that literally kills people if you
mess up. You're managing wildfires, bankruptcy,
political rage. To get a top tier executive to
even touch this job, you have to pay a massive
premium. And the counter argument. The counter
argument is you're profiting from a state sanctioned
monopoly that pleaded guilty to manslaughter.
Public service should not come with a 50 million
dollar payday. Both sides are just screaming
past each other. They're also betting on tech.
It's not just shovels and undergrounding. No,
they're leaning really hard into AI and machine
learning. They're using satellite data, weather
models, everything they can to predict exactly
where a fire might start. So the idea is, instead
of shutting off power to a whole county, maybe
we can just shut off this one specific valley
for two hours. Surgical shutoffs, that's the
dream. It's a race, really. Technology versus
climate change. So we've traced this incredible
arc from the Donahue brothers and their coal
gas in the mud to a $15 billion federal loan
and AI fire models. At its core, it's a story
of infrastructure fragility. We built this massive
machine, the super inch, the hydro dams, the
nuclear plants, assuming a stable world. A world
where the ground doesn't shake too much, the
forests don't burn too hot, and the population
stays put. But the world isn't stable anymore.
No. The climate has changed, the equipment has
aged beyond its lifespan, and we are living in
the interphase between the wild and the suburbs.
It really makes you look at the outlet on your
wall differently. I mean, usually you plug in
your phone and you just don't think about it.
But that outlet is the end of a very long, very
expensive, and very bloody wire. It connects
you directly to the Sierra snowpack, to the nuclear
reactors sitting on... a fault line and to the
ghosts of paradise. And it raises the big question
for the listener. We've seen the failure of the
private model, the two bankruptcies. We've seen
the failure of a public oversight, the CPC being
too cozy with the company for decades. Can a
private company, an investor -owned utility,
ever truly serve the public interest when the
risks are this high and the stakes are life and
death? That is the multibillion -dollar question.
When the victims own the stock and the federal
government provides the loans and the ratepayers
cover the lawsuits, is it even a private company
anymore? Or is it a zombie? A zombie monopoly.
Exactly. Are the profit motive and public safety
now just permanently at odds in California? I
don't have the answer. But looking at this history,
it is hard to be optimistic that business as
usual is going to work. Something to mull over
the next time you pay that power bill. Indeed.
Thank you for listening to this deep dive into
the history, tragedy, and future of PG &E. It's
been a heavy one, but an important one. Stay
safe out there. We'll see you next time.