The Riggs Report: PG&E’s Bankruptcy Move
Now that PG&E has filed notice that it plans to file for Chapter 11 bankruptcy protection at the end of the month, will the utility pull the trigger? Or can it be avoided?
Gov. Gavin Newsom wasn’t able to offer much clarity on that question earlier this week during a Capitol news conference, and he’s not alone. To say the least, it’s complicated, and the impacts of bankruptcy would have a substantial ripple effect.
I’m told that there are urgent discussions underway between the administration, regulators, insurers, attorneys and other stakeholders to explore whether it’s possible to reach some sort of settlement on who gets paid for what could be as much as $30 billion in potential liability costs arising from wildfires over the last two years. If those talks fail, then bankruptcy would follow.
A 2019 bankruptcy for PG&E would look far different from the company’s 2001 bankruptcy. Back then, the state was facing an energy crisis, with rolling blackouts and electrical shortages caused by market manipulation later pinned on wholesalers like Texas-based Enron. In the current case, the shortage is not power, but resources available to cover potential liabilities stemming from the wildfires.
The lights would stay on, in other words. Company workers would stay on the job. One of the most apparent impacts of a bankruptcy filing would be on wildfire victims who are pursuing lawsuits against PG&E. Those legal claims would be placed on hold, pending a reorganization plan for the company. The bankruptcy court would have to approve that plan, and ultimately sort out who gets paid and how much.
Another key question is how ratepayers would be affected. Following the 2001 crisis, utility customers were on the hook to pay more in order to pay off company debt. It seems likely that would be the case this time as well.
Bankruptcy would also impact California’s efforts to move toward greater reliance on renewable energy sources like solar and wind, as PG&E is a big player in those efforts. There are also questions about how or if bankruptcy would affect current plans to shut down the Diablo Canyon nuclear power plant near San Luis Obispo. The plant is due to be decommissioned by 2025, and there are substantial costs associated with that.
Last year, lawmakers at the Capitol approved a measure that allowed utilities to bill customers for future legal settlements tied to the 2017 wildfires. It also set up a process for the Public Utilities Commission to determine, in future fires, what legal costs for damage could be passed on to customers based on a utility’s behavior.
The Riggs Report: Covering Jerry Brown Difficult, but Always Memorable
It was Labor Day 2010.
Attorney General Jerry Brown, riding high poll numbers in his quest to return to the governor’s corner office after a 28-year absence, was making a campaign appearance at a friendly venue — the annual California Labor Federation picnic at William Land Park in Sacramento.
I was jammed with a small cluster of reporters in a corner, interviewing Brown for KCRA-TV. Unfortunately, I was on the blind side of a photographer for another local station. She couldn’t see me, and when she pivoted the camera left, it smacked me hard in the cheekbone.
Brown paused, squinted and said, “That’s gotta hurt!” which of course, got a big laugh from all of us.
That encounter encapsulates what it was like to cover Brown: unpredictable, memorable and occasionally painful.
Brown was always interesting, but never easy to cover. He drastically scaled back access to Capitol media, especially in his final term. That was an especially big contrast to his predecessor, Arnold Schwarzenegger, whose show-business mentality translated into frequent media events.
Brown explained his thinking earlier this week during a farewell appearance at the Sacramento Press Club, saying he wanted to guard against being “overexposed.” Most politicians would never say that, and would push their staff to secure more coverage, not less.
But Brown’s reticence wasn’t rooted in humility, but a calculus that he wouldn’t be seeking higher office again. In other words, he didn’t really need media coverage any more. He didn’t need the media to negotiate with or put pressure on a far less experienced legislature. And it was easier to scale back, given the significant shrinkage of the Capitol press corps following the 2008 recession.
That’s too bad, not only from an accountability standpoint, but also because, frankly, Brown could be fun to cover. That coverage gave voters a more complete picture of who Brown was and how he had evolved since his first two terms as governor from 1974 to 1982.
When I covered the 2010 gubernatorial campaign, there were some interesting moments. How had he changed? During a debate at UC Davis, Brown noted that, unlike his earlier terms, he was married and didn’t “close down the bars of Sacramento anymore.”
During an interview earlier that year, I asked Brown whether voters would be willing to return to office a politician who had a quirky reputation; someone with a wandering attention span who had run for president three times and who dated rock stars.
He pushed back.
“Do you think dating Linda Ronstadt was quirky?” he asked.
Immediately after returning to office in 2011, Brown was still accessible. As reporters, we knew that if we staked out his downtown condo, it was possible to catch him as he walked his dog, Sutter. He had a busy speaking schedule at downtown venues and could be counted on to stop and offer remarks.
It was also a time of crisis, with California facing an enormous budget deficit inherited from the Schwarzenegger administration. Brown engaged in a sales job with lawmakers, traveling the Capitol hallways on his way to closed-door huddles to pitch the idea of raising taxes as a budget fix.
Brown paid a memorable visit to a legislative budget committee, where he made reference to his Jesuit seminary days and his vows of poverty and abstinence. Just as the pope had given him special dispensation to give up those vows, he told Republicans he would give them dispensation to consider a tax solution.
Brown would later give up on a legislative solution, and convinced voters to pass a 2012 ballot measure that raised sales and income taxes.
Brown could be temperamental and cranky if he didn’t like the questions reporters asked. He liked to sprinkle Latin into his speeches. He used his dog, Sutter, as a master marketing tool, passing out Sutter playing cards with a call for budget discipline.
He was unlike any other governor I covered over a 30-year span. And he had a remarkable knack for remembering you.
When I left my reporting job, he showed up at a farewell reception organized by the Sacramento Press Club.
“Why are you leaving?” he asked.
“Governor, you were governor when I got out of college,” I replied. “And now that it’s come full circle and you’re governor again, what’s left?”
There was a lot left, of course. But whether you agreed with his policy and politics or not, Brown’s political longevity will never be equaled in California. And reporting on that over the span of three decades was a professional privilege.
The Riggs Report: Four Decades of Election Night Reporting
California’s politics have been dramatically transformed
It was November 1978, fresh with a journalism degree from Cal Poly, San Luis Obispo, when I first went on the air to broadcast election returns in California. Last week’s election night at KCRA-TV marked the 40 year point for me of covering elections in this state. What’s changed during that period? Except for slow results, and the presence of Jerry Brown, pretty much everything.
Technology, of course. In 1978, we got bulletins at my radio station, KATY in San Luis Obispo, from paper we cleared and ripped from the Associated Press wire machine. Breaking news was signified by a series of bells that rang, amid the clatter of the mechanical keys.
At the county clerk’s office on election night, we waited for printed handouts from the elections staff. Depending on where ballots had to be trucked in from, the tabulation of the results could be agonizingly slow. Later, when I worked in Santa Barbara, the only certainty of the night was that the returns from the north county, Santa Maria, would be late. Often because a truck had broken down somewhere on the journey south on the 101.
I don’t remember a lot of detail from that election night in 1978, except that Jerry Brown was cruising to a comfortable reelection to his second term as governor. After opposing the passage of Proposition 13, the landmark property tax-cutting measure in the June primary, Brown abruptly pivoted to become an advocate of tax cuts. It was a winning tactic.
Talk about a political anomaly. Four decades later, Brown is wrapping up his tenure as the longest-serving governor in California history. Four terms, separated by a 28 year gap. Students who graduated from college in 1976, and those who graduated in 2018, have Jerry Brown’s signature on their diplomas.
Today, we have instant technology to collect and tally the vote. But in close races, such as a handful of contested House seats, we still have to wait for the results. That’s not due to broken-down trucks or staff ineptitude. It has to do with California’s aggressive efforts to expand voter participation, which allows Election Day registration and allows ballots to count if they arrive three days later, as long as they have a Tuesday postmark.
Those provisions, plus the sheer size of California’s electorate, mean the instant results we would like often have to wait.
The most significant change has to do with the political landscape and how blue the state has become. In 1978, California’s two U.S. Senators were split between the major parties, Republican S.I. Hayakawa and Democrat Alan Cranston. California had 43 members of the House back then, with 17 Republicans and 26 Democrats.
Now, it’s lopsided. Democrats hold both U.S. Senate seats and all of the state’s constitutional offices. Democrats hold a supermajority in both houses of the state Legislature. The House delegation now stands at 10 Republicans and 43 Democrats. The Republicans are at risk of losing three more of those seats, depending on the outcome of vote totals that are still being tallied.
California’s transformation into a virtually one-party-ruled state is due to many things, including President Trump’s high disapproval rating here. From a checks-and-balances perspective, that carries a lot of problems.
What’s next? The 2020 election, of course, and the certainty that Jerry Brown is finished with elective office. Maybe.
The Riggs Report: The Capitol’s harassment hangover
Lawmakers return to a charged atmosphere
With 2018 comes the final year of Jerry Brown’s governorship, which is historic in the sense that he will have served longer than any other California governor. And as lawmakers return to the Capitol, they face pressing problems, including the lack of affordable housing, fallout from the federal tax bill signed by President Trump and whether to pursue universal health care.
But right now, lawmakers are faced with the explosive issue of what to do with sexual harassment claims; an issue that has taken on even more volatility in an election year. What is normally a celebratory mood was subdued on Wednesday.
In the Assembly, Democrats have already lost their supermajority status. Two Southern California members, Matt Dababneh and Raul Bocanegra, have resigned their seats in the face of harassment allegations while denying any wrongdoing.
In the Senate, Tony Mendoza is also facing allegations of harassing a young female staffer enrolled in a Sacramento State Fellows program and punishing those who knew; charges he also has denied. He was asked last month by Senate President Pro Tem Kevin de Leon to take a leave of absence pending an outside investigation. His departure would also end the Democrats’ supermajority in the Senate.
Mendoza agreed late Wednesday to take a one-month leave of absence. But that came after he pushed back noisily, releasing a letter complaining that he had been denied due process in addressing the allegations, and after he requested an audit this week of how the Legislature handles sexual harassment claims.
Mendoza’s defiance of his own leadership creates an enormous headache for his fellow Democrats, who face pressure to do something about him, or face the perception that they are simply protecting one of their own. That’s why the first order of business for Democrats on Wednesday was to schedule a closed-door caucus meeting to consider options. Cue the fireworks.
Mendoza knew he was facing suspension by his colleagues if he hadn’t agreed to take a leave. Now, consider recent history.
The Senate, for the first time ever in its history, voted in 2014 to suspend three Democrats who had run afoul of the law. Rod Wright had been convicted in a voter fraud case involving use of a false address as his residence of record. Ron Calderon and Leland Yee both faced corruption charges in separate and unrelated federal criminal cases.
Those suspensions created another problem, since all three disgraced politicians continued to collect their state salary. It was a tough situation, handled well by then-Senate leader Darrell Steinberg. He then placed a constitutional amendment on the ballot, allowing pay to be withheld for suspended members. Voters approved the measure in June 2016.
With that background, Democrats had the means to suspend Mendoza and strip him of his pay, pending an investigation. By agreeing to a leave of absence, Mendoza avoids that consequence and is allowed to keep his pay and benefits. Critics will complain, but that’s how the law works.
Due process will come in time. But in politics, the court of public opinion won’t wait.
In the meantime, it’s an uncertain and unsettled time for lobbyists and lawmakers, who wonder what names and charges will surface next, and who will be the next to go.