Electricity, Monopoly and California’s Fiery Apocalypse

By Marc Beauchamp

As I write this, California is burning down, from rural Paradise in the north of the state to Malibu Canyon in the south. President Trump blames environmentalists and government red tape for overgrown forests. Environmentalists blame climate change and clamor for government to do something about fossil fuels.

From my perch in Redding, in far northern California, I see another way in which government contributed to these apocalyptic fires. No fire ever started because of government red tape or global warming, whether caused by man or nature. Fires start from sparks. The Camp Fire, now the deadliest and greatest destroyer of property in California’s modern history, started, it’s suspected, from sparks from transmission lines owned by Pacific Gas & Electric Company. PG&E equipment is also thought to have triggered the deadly fires in Santa Rosa and the California wine country in October of last year. California is a dry state and getting drier. It is crisscrossed by thousands of miles of electric power transmission lines. In windy conditions—or if these lines and related equipment are not properly maintained—they pose a serious risk of fire.

This Thomas Edison-era electric power generation and distribution model is laughably outmoded. Can you think of any other industry that has changed so little in 130 years? Imagine that instead of Spotify we were still playing gramophone records.

Why aren’t we all generating our own power, at our homes and businesses, using fuel cells or some other technology? Why do we have these transmission lines going everywhere, vulnerable to fires and terrorism? It’s nuts.

The reason Edison and his power lines live on is that the electric utilities, with a government-sanctioned monopoly status, have kept out competition. Many environmentalists don’t get it. They want to replace coal, hydro, gas, geothermal and nuclear generating plants with solar and wind. But even if that were feasible, solar and wind farms would still rely on power lines to bring electricity from distant locations to your home, school or place of business.

As we look at the role of forest management and climate in these fires, we also need to look at electric utilities and ask whether there isn’t a better way to make electricity. For example, I believe Google, Amazon, Apple or Tesla could do better at powering our lives than a bunch of stodgy old power companies whose rates, profits and practices are micromanaged by government bureaucrats. And we must do better.

California is facing the bankruptcy of one of its vital electric companies. Since the wine country fires, PG&E’s stock has crashed by two-thirds. It faces tens of billions of dollars in liabilities. The company suspended its dividend at the end of 2017, leaving retirees and many thousands of others high and dry.

Even more concerning: The world-beating electronics industry that drives much of California’s economy will suffer if electricity becomes less reliable, or unavailable. I’ve been thinking about this for more than twenty years, since a five-year stint working for an electric company in Hawaii. All that remains of the author’s wife’s family home near Redding.

It’s time government gets out of the way and opens the electricity business to entrepreneurs and innovation. California, with so much at stake, could take the lead in this.

With the best minds in Silicon Valley and elsewhere working on it, it can be done. I foresee a day in my daughter’s lifetime when her children will look back on Thomas Edison’s central generating station and wires going everywhere with a sense of incredulity.

Instead, they will enjoy a cleaner, more efficient and safer power system—one where we’re all producers and consumers. That day, when it comes, will truly bring power to the people.

Freelance writer Marc Beauchamp lives in far northern California. Among his former jobs he worked for the Seattle Symphony Orchestra, Kyodo News Service in Tokyo, Forbes magazine in Los Angeles, the Nasdaq Stock Market in Washington, D.C. and an electricity company in Hawaii.