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PG&E said San Francisco would need 22.5 billion yuan to take over the city’s distribution network, which Wall Street criticized as a ridiculous estimate; The two sides continued to compete over asset values, spin-off costs, power prices and power outages.
Pacific Gas and Electric Company (PG&E) said on the 21st,san francisco If the city government takes over the city’s distribution network, it will have to pay 22.5 billion yuan, six times the 3.4 billion yuan valuation submitted by the city in April this year. State Senator Scott Wiener issued a statement calling the valuation ridiculous and saying the company was trying to block the acquisition at a high cost.
San Francisco plans to acquire PG&E’s distribution network in the city to reduce long-term costs, improve the reliability of power supply, and reduce user burden.California The Public Utilities Commission is assessing the value of the assets and the cost of the spin-off. PG&E valued the related assets at 13.9 billion yuan, including an additional 8.6 billion yuan of spin-off and business impairment expenses.
According to a statement from Visago’s office, a massive power outage last December affected 130,000 San Francisco residents and since then the city has experienced an average of one power outage per week. The statement also noted that PG&E is raising electricity prices by 40% through 2022, and that California’s electricity prices are the second highest in the United States.
PG&E CEO Patty Pope said that a government takeover of the power grid is not a suitable solution for San Francisco customers, and documents presented by the company show that the acquisition is not financially sound. The company said that to maintain power supply to out-of-town users, the spin-off project would require replacement substations, construction of new service centers and reconstruction or laying of wires; The new substation may be located in San Mateo County.
The company also alleged that the city underestimated the value of the underground power grid and abandoned more than 2,000 real estate interests, including easements and use permits. PG&E said it has invested $3 billion in San Francisco’s power grid over the past decade and plans to invest about $2 billion more over the next five years.
In a statement, Wilson criticized PG&E for once again trying to solicit large sums of money from San Francisco residents with a “ridiculous and fabricated” appraisal, further damaging its credibility. He questioned the company’s valuation of a city’s power grid assets at about 23% of the value of the entire power system, and demanded an unprecedented 7.5 billion yuan in “divided damages”. He believes the company has no right to claim fees and says residents should not have to pay billions of dollars to executives and shareholders to receive dividends.
Visago said the estimate was clearly intended to scare San Francisco, but it would only strengthen the campaign to reduce electricity bills and improve the reliability of the power supply. He argued that San Francisco should secede from PG&E and demanded a fair takeover process. Visago proposed state Senate Bill 875 this year to help San Francisco promote acquisitions, and also proposed a bill in 2020 to fully defund PG&E.
San Francisco accounts for about 5% of PG&E’s total electricity demand, and the company’s entire power system is valued at about $60 billion, said Nancy Crowley, a spokeswoman for the San Francisco Public Utilities Commission. California regulators previously ruled that cities must acquire property at the “highest price” that a hypothetical buyer would pay.
Summary FAQ
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PG&E said if the San Francisco city government were to acquire its distribution network, it would have to pay 22.5 billion yuan, including 13.9 billion yuan in asset valuation and 8.6 billion yuan in spin-off and business loss costs, about 6 times the city’s valuation in April.
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Visago believes that PG&E is deliberately raising prices in an attempt to scare away takeovers with “ridiculous and fabricated” valuations. He challenged the company’s valuation of a city property at 23 percent of the value of the entire system and sought unprecedented breakup damages.
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San Francisco hopes to reduce long-term costs, improve the reliability of power supply, and reduce user burden by acquiring PG&E’s urban distribution network. The city and regulators are currently assessing the asset value and spin-off costs as a basis for subsequent negotiations.
