SCE powerlines in Altadena

SCE powerlines in Altadena

PHOTO: Joan Depew 

Power vacuum

SCE’s poor windstorm performance proves Pasadena was right in not privatizing its electric utility

By John Grula 12/29/2011

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The next time you hear a Republican politician say government can’t do anything right and all services should be handled by the private sector, consider the recent experience of San Gabriel Valley residents during and after the severe windstorm of Nov. 30 and Dec. 1.    
 
On the one hand, we have the city of Pasadena, which receives electricity from its own public, not-for-profit utility, Pasadena Water and Power (PWP). On the other hand, we have the surrounding cities of Sierra Madre, La Cañada Flintridge, Monrovia, San Marino and Temple City, all of which receive their electricity from the private, for-profit utility Southern California Edison (SCE). The unincorporated town of Altadena also receives its electricity from SCE.  
 
So how did these various communities fare during and after the windstorm of Nov. 30 and Dec. 1?
 
Even taking into account its larger size, Pasadena was perhaps the hardest hit of all of these communities, with at least 1,200 downed trees and $20 million in damages. The wind gusts in Pasadena were as high, and perhaps even higher than, winds in surrounding areas. Nevertheless, according to Erica Rolufs, a spokesperson for PWP, only 10 percent of PWP customers (businesses and homes) lost power. Among those that did, within 48 hours the number of customers without power had been reduced to less than 1 percent. Everyone I know in Pasadena, including my employer, never lost power.
 
How did it go for SCE customers? According to the Pasadena Weekly and the Valley Sun, the entire town of Altadena experienced a complete blackout. Everyone I know in Altadena lost power, including me. In La Cañada Flintridge, 100 percent of homes and businesses lost power, according to Rabo Parseghian, a management analyst in Public Works. 
 
Sierra Madre? More than 90 percent of residents and businesses lost power, according to Public Information Officer James Carlson.
 
Monrovia? Public Information Officer Dan Bell estimates 75 percent to 80 percent of homes and businesses lost power. 
In San Marino, 100 percent of homes and businesses lost power, according to Fire Marshall Jim Frawley. 
 
Finally, Brian Haworth, assistant to the city manager in Temple City, reports that 75 percent of SCE customers in that community lost power. 
 
So, in terms of maintaining the delivery of electricity during a bad windstorm, it is obvious that PWP was far superior to SCE. In addition, there have been numerous reports about how slow SCE was in restoring electricity to its powerless and shivering customers. 
 
SCE’s performance was so bad, that it has been roundly criticized by politicians across the political spectrum, from Democratic Congressman Adam Schiff to Republican LA County Supervisor Mike Antonovich. Furthermore, on Dec. 7 the California Public Utilities Commission (PUC) announced it will investigate the reasons for the “prolonged power outages” in SCE’s service area. Until now, the PUC has not launched an investigation of any other Southern California utility.
 
SCE has been whining that all of the downed trees and storm debris made it difficult to gain the access needed to make critical repairs. Hmm … PWP also had to deal with a lot of downed trees and storm debris, yet it got the power going again much faster than did SCE.  
 
In light of the far superior performance of PWP compared to SCE in the recent windstorm and its aftermath, it’s worth examining the respective “business models” of these two utilities. PWP is community-owned and its first priority is to serve its customers. It is not driven by profit, and profits it may sometimes accrue are often turned over to the city’s general fund. PWP’s general manager, currently Phyllis Currie, cannot earn more than $209,000 a year. Most importantly, PWP emphasizes preventative maintenance to keep its infrastructure reliable.
 
In contrast, SCE is a for-profit business that is concerned with its stock price and ability to pay dividends to its shareholders. Edison International is the corporate parent of SCE, but SCE contributed more than 80 percent of Edison’s revenue in 2009. Edison earned $1.25 billion for its shareholders in 2010, up sharply from $849 million in 2009. And Edison increased the dividend on its common stock for 2011 from $1.26 to $1.28 per share. 
 
For fiscal year 2010, the total compensation paid to SCE’s president, Ronald Litzinger, was $2,610,760, or more than 10 times that of Currie. Other SCE executives were lavishly compensated in ways similar to Litzinger.
 
Finally, SCE’s commitment to preventative maintenance seems dubious, as the photo accompanying this article illustrates. These SCE power lines are one block from my house.  Their frayed and shredded condition indicates they should have been replaced a long time ago. An old line like the one pictured was torn down in front of my house by the recent windstorm, and its snapping had nothing to do with a falling tree. A Dec. 2, 6 p.m. press release issued by Sierra Madre (about 40 hours after the end of the wind storm) announced that “At this time, SCE is only responding to 9-1-1 wire-down calls.”  No wonder it took them so long to restore power.
 
About 10 years ago, Pasadena came under pressure to privatize PWP, but fortunately the city resisted. Let’s hear it for “socialized electricity!”

John Grula, PhD, is affiliated with the Southern California Federation of Scientists
      

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Community members interested in the topic of "privatization" may like to attend an upcoming event sponsored by League of Women Voters Pasadena Area.

Yours? Mine? Ours? Exploring Privatization
Saturday, February 11, 2012
8:30 a.m. to Noon
Neighborhood Church, 301 N Orange Grove Blvd, Pasadena.

The event is free and open to the community. An RSVP is requested: 626-798-0965

There is much available literature on the topic. A book I just started reading is "All That We Share: A Field Guide to the Commons" by Jay Walljasper.

As cash-strapped municipalities look for ways to cut costs and increase revenues, the issue of privatization is one that all voters need to be aware of.

Many thanks to John Grula for his thoughtful commentary and to Pasadena Weekly for publishing Grula's guest opinion.

posted by Monica Hubbard on 12/29/11 @ 12:57 p.m.

John, SCE handled it terribly, no question. That is an indictment of SCE, not whether it is for profit or not.

Free markets or what socialists like to call it "private" or capitalism, seems to know little about what it means.

Neither PWP or SCE compete with another utility, they are both monopolies. One tax payer funded, the other state ordained.

PWP, is tax payer funded, well beyond the electric bill. Tax payers ensure their pensions, benefits well beyond their actual employment and service. So taxpayers are paying for their electric, and through additional taxes, and the employees of PWP.

While SCE probably has a union attached to it, that comes out of SCE's profits.

Does SCE function within the frameworks of the free market? Can they set their own prices? Or must they go to the State government for approval?

I think this article should take SCE to task on its performance, but it should also take to task government control over a utility whether allowing no competition to labor costs.

And we all know how well socialized electricity worked for the former (and future?) Soviet Union, Cuba, etc. because no question, we have millions of examples where the state outdoes the free market. Right?

posted by Tony on 12/29/11 @ 01:31 p.m.

This is more complex than whether the response to this disaster was public or private. During a disaster - and this truly was a disaster - things do not go well. Hopefully there is some serious debriefing going on to ensure should strong winds happen again things will go better next time. But pointing fingers at SCE or government regulators of SCE is not helpful.

To me, even thinking of comparing government provided services in the United States, to the Soviet Union and Cuba makes no sense. Our country is so far removed from a socialist model that there is just no comparison. Every community I am aware of seems to have found a place for services provided directly by both government and by private companies (for-profit, or not-for-profit). This should be done by looking at the needs and wants of the community and making decisions who is best able to fill those needs and wants.

So I would urge people not to over react in either direction, until an analysis is completed. Then rational corrections can be made. Government and the SCE can be held responsible appropriately.

posted by ElaineB on 12/30/11 @ 12:52 p.m.
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