California’s Burning – PG&E, Gill Ranch and Me

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PG&E recently shut off the electrical power to 2,000,000+ customers spread across 35 counties in California, at the same time warning of future cuts to millions more. News feeds show lurid photos of endless wildfires, blamed on PG&E’s negligent line maintenance. Every day brings more headlines chronicling PG&E’s (Pacific Gas & Electric) descent into purgatory, an excruciating round of bankruptcy court, endless liability lawsuits, and daily exposure to the rage of the hysterical and the tragedy of the forelorn.

Wait a second! Isn’t canceling out liability lawsuits the point of corporate bankruptcies? Now the grandstanding politicians of Silicon Valley are proposing to “nationalize” PGE. The assembled Potemkin village elders of the Valley propose to summon forth the beleaguered faculty of Berkeley from the murky bunkers of the Resistance, blinking as they emerge into the light of day. They have been called forth to undertake a great task – run a utility. I can only retreat to the thoughts of the prophet Nathan expressed in II Samuel, “How the mighty have fallen.”

The media in California is doing its best impression of an outraged father watching his 16 year old son stagger into the house, at 2 AM – drunk as a skunk with a badly banged up family car outside. That background noise you hear is the clucking of politicians and talking heads. If you have spent time around chickens, you get the metaphor. A squirrel runs along the top of the chicken fence and all the chickens start clucking, scratching the ground in a grand display of ruffled feathers.

The pompous outrage of the media reminds of Captain Renault in that great scene out of Casablanca, the timeless movie that brought Humphrey Bogart and Ingrid Bergman together and then broke them apart on the runway – all for the greater good of the original Resistance. Humphrey Bogart stars in the role cementing his place in the pantheon of kitschy art, a timeless celebrity icon. Bogie is Rick Blaine, the owner of an upscale but decidedly seedy casino in Casablanca – a North African city and part of Vichy France recently fallen under Nazi control.

The head of the local police, Captain Renault, is Rick’s best friend, as well as one of the casino’s best customers. But the humorless Germans now running the town insist Rick’s casino be shutdown, gambling being a pernicious vice of the lesser races. Hovering ominously in the background are the shadowy goons in black trench coats, the Gestapo.

Captain Renault, playing the consummate bureaucrat in counterpoint to Rick Blaine’s dissolute cynic, dutifully moves to carry out his new masters’ wishes. Thus in the scene, Renault, played by Claude Rains, strides into the casino, blowing his whistle and shouting, “This café is closed immediately. Everyone must clear the room“. Surprised, a shocked looking Rick comes up, attempting to reason with his friend the Captain as cops roust Bogie’s customers out of the building.

Police Captain Renault looks at Rick as if just meeting him for the first time, adopting his trademark – a classic nose in the air piece of Gallic hauteur, while uttering his classic line, “I’m shocked, shocked to find that gambling is going on here.” It is at that moment that the cashier comes up to Captain Renault, hands him a bag and says, “Your winnings sir”.

Anyone not in a coma recognizes the media as brazen shills, carnival barkers beating the drums for all the shiny new toys of renewable power, green energy, the renewable and sustainable Earth Mother. They are the drum majors leading us in a grand parade, singing along with The Weavers, Marching to Pretoria, where unicorns gambol in lush fields of lotus blossoms. But now, with my apologies for returning to the original metaphor, the chickens are coming home to roost. Surprisingly enough, spending gazillions of dollars on boondoggles means that basic infrastructure is left to slowly crumble into neglected decrepitude.

Returning chickens are roosting everywhere, but most especially in the strongholds of Adorable fashion, the heartlands of progressive virtue signaling. For instance, New York State, home to one of the largest undeveloped natural gas reservoirs in America, in a piece of much praised political theater chose to virtue signal rather than meet the most basic needs of her citizens. New York banned the pestilence of fracking, choosing as well to protect the State’s virginal soil from the debauchery of new pipeline construction.

But now the natural gas utility for the City of New York has placed a moratorium on all new natural gas hookups. It seems New York City is running short of natural gas. In contrast to California, at least the NY chickens have had the grace to be somewhat circumspect in their clucking, perhaps dimly suspecting their own complicity in the farce.

But California has always prided itself on being different, the advance guard of the future and oblivious to the plebian virtues of humility and introspection. The State that ushered in freeways and McDonald’s, while recently alerting us to the existential danger to the Earth Mother posed by plastic straws, is moving even further into the future by teaching large numbers of its citizens to live without electricity.

Listening to the small talk in Baby Boomer gatherings, it soon becomes obvious that children and grandchildren are our favorite topic of conversation, most especially if they aren’t living in our basement. Actually conversation might not be the word to use, monologues being a more realistic description of our gathered discourse. If our kids have a useful college degree, parents can’t help dropping their children’s profession into most every conversation, with medical doctor being the gold standard, lawyer running an honorable second and such lesser pursuits as business or counseling receiving a gentleman’s “C”.

Very rare is the mother, my own excepted of course, bragging on her child who happens to be an engineer. Engineers are just tooo . . . . toooo… What is the right word? That is unless he or she is an environmental engineer, environmental engineer being the modern equivalent of a pastor or priest; a virtuous person who has stepped off the ladder of meritocracy to pursue a life of faith. And just to pursue a rabbit trail here, I’ve always wondered – “Just what is an Environmental Engineer anyway?”

One of the things making engineers unique, the defining difference between real engineers and future engineering managers, is that engineers know, down in their basic DNA, that the Laws of Thermodynamics reign. Robert Heinlein, that ex-engineer turned novelist, coined an acronym in his novels for this underlying iron clad law governing the Universe:

“TANSTAAFL – There Ain’t No Such Thing As A Free Lunch”

TANSTAAFL has been adopted as a motto by the closeted world of the nerdy engineer with quasi-political leanings, the Libertarian’s. Perhaps this dichotomy explains the puzzling political differences between engineers and scientists who otherwise appear to be virtual clones.

For example, there exists a large and active “Scientists for Bernie” group on Facebook. The respected journal, Science, took pains to provide “scientific” support for Elizabeth “Pocahontas” Warren’s claim of Native American ancestors. But engineers appear to be largely absent from the rings of the progressive circus. The aforementioned environmental engineers are of course the exception, being reliable foot soldiers in the progressive armies.

In my own mind, the catch phrase, “there is no magic”, captures the engineer’s mind set as well as explaining their absence from the magical thinking ingrained into politics. Every action has a reaction, everything has a cost and water flows downhill – everytime. How can you engage in the echo chamber of politics with such a dysfunctional worldview? I won’t beat on my own tiresome drum here, pointing out the clown car that is the renewable and sustainable cavalcade. If you are reading this, you have heard it all before. I imagine your eyes roll when I once again catalog the fallacies, misunderstandings and just plain missing pieces in what constitutes the public conversation about climate change and green energy.

Returning to the California outage debacle – the 800 lb. chicken currently roosting in California, that heartland of Adorable virtue signaling. PG&E has failed in a very visible and embarrassing way on the most basic of utility promises. The modern utility is given a legal monopoly, something supposedly rare in a free enterprise economy. For the many advantages that accrue to the holder of this legal monopoly, the State demands little other than the promise of service and, most importantly, political patronage.

In the case of an electrical or gas utility, the monopoly is granted not on the basis of the utility’s ability to produce the natural gas or electricity but on the utility’s ownership and maintenance of the wires/pipe delivering that commodity to the end user. This is very thing that PG&E failed so spectacularly to do.

Of course, PG&E had an excuse. A further mark of the manager, distinguishing them from engineers, is their ability to articulate excuses. In the case of PG&E and the rising propensity of their electrical lines to start wildfires, excuses rain down (an unfortunate choice of words) like confetti at a birthday party. There were trees and dry windy conditions, people living in among the trees, climate change, etc. Who would have guessed? In the great forests of Northern California, people lived in among the trees – and they had electrical service to their homes in the trees. Sometimes it was dry and windy. Who knew?

Time to admit my biases, as if you couldn’t guess. In my forty years in the energy business, I have rubbed shoulders, in one way or another, with most of the large West Coast utilities, i.e. PG&E, Sempra, Edison, LADWP, PGE, Pacific Power, etc. And from my perspective, PG&E is in the top five of the most inept organizations (obviously excepting governments) with which I have ever been involved. But I hasten to add that PG&E is not No. 1, they are not the most inept.

In an amusing aside, I must comment on the City Fathers of Silicon Valley demanding the “nationalization” of PG&E. They do have a practical side in that they realize someone with utility experience should oversee and advise the Berkeley faculty newly called on to manage and direct the “nationalized” PG&E. The City Fathers are proposing the ex-head of LADWP, Los Angeles Dept. of Water & Power for this role. The funny part, at least to me, is that LADWP is No. 1 on my list, hands down the most inept organization with which I have ever been involved.

I point out here that my judgment is based on my own personal experience, admittedly narrow and weighted toward the backroom closets of facilities and operations – obvious dead ends for the talented movers and shakers of the meritocracy and so avoided like the plague by the ambitious networker. In the past, I have referenced Absolom Bracer’s First Law –

“In any organization, the engineers are physically located as far from executive management as it is possible to be.”

PG&E is just one more proof, though a particularly telling one, of Bracer’s First Law. While PG&E headquarters were and are in a large skyscraper located in downtown San Francisco, PG&E engineers were, and I suspect continue to be, located miles away in shabby buildings easily mistaken for disreputable warehouses, perhaps housing growers of the “reefer plant”. The offices themselves were windowless, dated, with worn carpets and peeling paint. Calling on PG&E engineering staff back in the day, I admit to something almost approaching embarrassment at the plight of my brothers and sisters in the calling.

One of the last projects my company did was a gas storage project in California’s Central Valley, 20 miles west of Fresno. The project, Gill Ranch Storage by name, stored natural gas in an old and depleted natural gas reservoir some 6,000 feet below ground. A gas storage field is one of the reasons why renewable energy is an idyll peopled by unicorns and lotus eaters. There is no such thing as an electrical storage field.

For the uninitiated, a gas storage field is a giant balloon filled with natural gas. Natural gas is pulled out of the pipeline during periods of little demand and stored in the field at pressures up to1,500 PSIG. During periods of high natural gas demand, such as when the wind stops or the sun goes behind a cloud, the storage field’s natural gas allows the gas turbine engines to run, maintaining the continued comfort and conveniences of Adorable America. Approximately 20 acres in size, Gill Ranch was designed to store approximately 20 billion cubic feet of gas moved around by nearly 50,000 HP of compression along with ancillary gas conditioning equipment.

Gill Ranch was jointly owned by NW Gas (Northwest Natural Gas, the natural gas utility for Portland, Oregon) and PG&E. NW Gas was the responsible partner for construction of the facility and was our client. By and large, from our perspective, it was a fairly successful project with no more than the usual slammed doors, threats of legal action and other game playing between engineer, constructor and client. Our client, NW Gas, seemed pleased by our performance on the project.

Time passed. My company was acquired by a ginormous multinational engineering behemoth. The San Francisco office of my new employer uncovered a business opportunity with PG&E, a need for manpower to review, examine and where necessary, re-engineer their natural gas pipeline system scattered throughout Northern California. In view of our experience, could I come out and help with a sales call. For such a time as this were we acquired.

The request for help from PG&E resulted from the San Bruno pipeline explosion that had occurred some months before. Some 2 miles west of San Francisco Airport in the Crestmoor neighborhood of San Bruno, a large PG&E natural gas pipeline, 30” in diameter, had exploded. Eyewitnesses reported a “wall of fire more than 1,000 feet high” with a death toll of 8.

Evidently a crack had developed in the pipe, which then ruptured when overpressured. Such cracks were difficult to detect as most of PG&E’s system did not allow the use of intelligent pigs to regularly inspect for developing cracks. Responding to that disaster, PG&E needed teams of qualified engineers to review their natural gas pipeline system, flag other possible failure points for immediate repair or servicing, as well as modify the system to allow for on-line inspections.

Having spent the previous twenty years of my life engaged in selling projects and engineering services, I hopped a plane and renewed my acquaintance with the treasure that is downtown San Francisco. You must remember this was downtown San Francisco before hordes of homeless wildings breached the walls of Winterfell, overrunning the streets of the city made famous by Rice-A-Roni.

The first meeting went well, technical people talking to technical people, engineer to engineer as it were. The importance of PG&E’s need was highlighted by the meeting’s location, at downtown headquarters rather than the engineering warehouse. As I left the meeting, having done this many times, I recognized the look and feel of a successful visit, believing a contract for our services would be forthcoming in the near future.

The PG&E engineers had shown a real sense of urgency in moving forward, getting things done. No one knew what other pipeline failure points could be hiding in the weeds. And here we were ready to perform triage on a wounded system, Hawkeye and Trapper John in the engineering version of MASH, the pro’s from Denver.

But the contract didn’t come. Weeks later, PG&E asked for another meeting. “Okay, it is well known that wheels of progress within a utility turn slowly and grind finely.” If the client requests the meeting, that is always good sign. Unless of course you are already engaged on the project, in which case – it is never a good sign. “Perhaps there were some issues of a technical or contractual nature not covered in the first meeting?”

So I am at another meeting, weeks after the first. The work needs to get moving. PG&E, by their own admission, needs a contractor for a substantial body of work requiring prompt action, not delay and undue deliberation. The San Bruno explosion highlighted a pipeline system with the potential, indeed the probability, of severe flaws, the people of Northern California at obvious risk.

Same people in the meeting – same conversations. And then almost unnoticed, a young woman, obviously a “suit”, slips into the room, quietly and with little notice. However the atmosphere in the conference room is now different, the body language of the PG&E engineers changes. A cold front is coming in off the Pacific.

Like iron filings in the presence of a hidden magnet, body language in conference rooms reflects the presence and location of power. This unnamed and unannounced lady was clearly a battleship now tendered among the frigates and corvettes earlier deployed. My conversation with the PG&E engineers, led by them, continued as before. But my peripheral vision picked up an increasingly visible agitation in the manner of this unannounced visitor.

Like a child’s toy in need of new batteries, the direction of the meeting led by the PG&E engineers began to lose coherence and energy. And then the new arrival, unable to contain herself further, broke into the now drifting conversation. This woman had things to say and she proceeded to say them with some vehemence.

At this remove in time, some 8 years gone, I cannot recall her exact words but my memory of her message is clear nevertheless. Piecing together randomly scattered details from a rather disjointed but clearly emotional and scathing review of my since acquired company and me, I deduced that she was or had been PG&E’s project manager or perhaps business development lead for Gill Ranch Gas Storage.

She quickly made clear that, in her opinion and experience, we were the poorest excuse for engineers that she had ever seen. We had consistently misrepresented costs and schedules, turned in poorly executed and mistake filled engineering causing irreparable damage to cost and schedule. Unsaid but obvious was the real source of her fury, the damage to her career. Basically we, i.e. my former company and I, were the toilet paper that sometimes stuck to her heel as she exited the facilities.

I said little during the extended tirade, nodding or cringing at appropriate times while adopting a contrite mien. Over the years I had found it advisable to hug the ground when the 16” guns are firing. After all, engineering contractors quickly acquire considerable practice as the targets of a client’s executive firepower. As the PG&E “suit” began to repeat herself, I couldn’t help but notice my opposite numbers across the table, the PG&E engineers. It was clear they were practiced in the art of the foxhole as well, occasionally shooting me an apologetic look when they dared raise their eyes from a close examination of their shoes below the table.

Leaving the building, the PG&E engineers accompanied us. It was a quiet walk. There wasn’t much to say. They were obviously very embarrassed by the ambush that had just taken place. They were good men, professional and courteous, but it was clear they had little say in the choice of an engineering contractor for the pipeline system review. There was something else clear. We were out of the running.

And so I returned to Denver, pondering this strange meeting. It wasn’t that I had never been yelled at for any number of failings, both personal and corporate, both deserved and undeserved. But this Category 5 storm was unique by its total lack of advance warning. The hurricane had struck with the sun shining.

Of course the engineer is a notoriously poor judge of a project’s success or failure. One might as well ask the steer in the chutes leading into the slaughterhouse for an opinion on the day’s lunch menu. But Gill Ranch had been a good project and this was not our first rodeo by any means. We had a solid resume of work on gas storage projects. We had one of our best engineering teams on it with an excellent project manager. In fact that individual is now the Engineering Manager for one of the largest oil & gas firms in the Rocky Mountains. We worked well with the client. Where did this fury come from? Whiskey – Tango – Foxtrot indeed.

I have always imagined myself a bit like Det. Lt. Frank Columbo. We have the same fashion sense, though I wish we were more alike in the “hair” sense. But like Columbo, I have a need to work out mysteries, puzzling over obscure clues to the detriment of my serenity. And so over the weeks that followed, I wrestled with what had just happened. This puzzle in need of solution was just as well, for shortly after that ill fated meeting in San Francisco, my new employer, the ginormous multi-national engineering behemoth, “inquired” about my thoughts on early retirement. As it happened, my own thoughts closely paralleled their thoughts and we came to quick agreement. As a result of this fortuitous meeting of the minds, I had the time to ponder the mystery of PG&E without distraction.

In retrospect, I came to believe that the PG&E “suit” had a real grievance. Perhaps she was simply a very good actress, but I didn’t think so. Her emotional intensity had registered on the Richter Scale. She had been blindsided and very much caught unawares. In truth, Gill Ranch cost substantially more than the budgeted cost it had begun with. I am sure the young lady had endured many difficult hours, enduring the displeasure of high ranking “suits”, twisting in the wind as she stood on the plush carpets in the mahogany paneled splendor of PG&E’s Executive Row enduring her own barrage.

It was understandable that she wished to vent. The “brown stuff” does flow down hill. But why this raw anger at being taken unaware and the resulting organizational storm because she hadn’t been warned? Over budget and late is the fate of most projects like Gill Ranch, so typical as to be the norm. Realistic budgets and schedules are possible, but “TANSTAAFL”. There are prerequisites and, as noted, they are not free. “Hard” budgets require things like engineering and design drawings, equipment pricing, construction estimates, site factors taken into consideration, etc. That’s a lot of stuff costing both time and money.

Imagine an alternate reality where this young lady walked into the PG&E Board meeting a year later than was actually the case and saying, “Here is our project proposal for Gill Ranch Storage. We spent 2 million dollars developing the budget but decided to abandon the project. It cost too much.” That is a sure track to promotion for sure! Most probably, the Board wouldn’t have met with her anyway because Brittany, her competition in the next office down the hall, would have come in 11 months earlier and got her project approved.

After approving Brittany’s project, PG&E had have had no need to develop another gas storage project. This angry young lady would have reassigned to a position more in keeping with her demonstrated project development skills, the HR department of PG&E’s Eureka office. Business development is the fast track and people’s careers are on the line. The client’s career ladder, even for someone with the correct gender and ethnicity, is a very Darwinian environment.

A “hard” budget for a project like Gill Ranch requires spending many months in engineering and design, engaging in the hard work of clamping down on the “what if’s” of client Business Development fantasies and negotiating Operation’s “wish lists”. Instead of that tedious and often career damaging labor, the owner’s project manager, the constructor and the engineer, play a game of “Name That Tune”.

Instead of playing a few notes and then guessing the name of the song, we draw cartoons of the proposed facilities, throwing time and money into the budget based on those sketches. Things in the budgeting game have to move quickly, time and money are the game pieces and there are no rewards for conservative play. Shooting The Moon is a time-honored strategy more successful than not.

This is the game as played by the big boys and it was clear the young lady from PG&E was not a big boy – in any sense of the word. She was driving on the freeway during rush hour and experiencing an emotional meltdown because everyone wasn’t driving per the DMV issued manual. Everything she had said, about what happened or about what she expected to happen reflected a certain innocence, actually a jaw dropping naivety at her level in PG&E. One expects the battleship’s admiral to understand the nature of battle at sea.

As is usually the case, serious dysfunctions in construction projects reflect not the quality or lack thereof in the work itself, but are a window into the games being played in the Owner’s organization. I have noted my appreciation for the sheer ineptitude exhibited by PGE at Gill Ranch as well as other times and places, but now I must note my appreciation for the “eptitude”, moxie if you will, of Portland’s utilities. Like other utilities, they struggle to build things in a timely or cost effective manner, but Portland utilities, including and most especially NW Gas, have a great knack for getting things done. And getting things done is the true measure of success for a utility.

In the best tradition of my beau ideal, Det. Lt. Frank Columbo, I have constructed a theory of Gill Ranch and the “crimes” surrounding the Gill Ranch Project. I probably won’t get a dramatic on-air confession like my mentor invariably did, but then I am only a retired engineer. However, like his, my theory fits the facts.

Experience, particularly the experience created by failure, brings with it wisdom. People matter. People matter a great deal. In contrast to the ingénue at PG&E, NW Gas had a shrewd game player with a great court sense, a Hall of Fame point guard. The man behind the Gill Ranch Storage project was a Svengali like figure, a legendary executive with a long career at the utility.

For his own reasons, he felt the need to build a large gas storage project for his company in the Central Valley of California. I suspect he understood long ago the facts, as opposed to the fantasies, of renewable energy. Those picturesque windmills and futuristic solar panels require very substantial investments in natural gas pipelines, storage fields and gas turbine electrical generation. Nearly twenty years ago, the man from Portland was looking into the future for sure.

But there were two big problems with a Portland gas utility realizing the maximum benefits for their rate payers that would come from owning a large gas storage facility in California’s Central Valley. The size and location of the project would require an` outsized capital expenditure for a mid-size utility in Portland, Oregon. But even more discouraging would be the fact that the State of California virtually outlaws any gas pipelines in the northern half of California unless owned by PG&E.

California’s rules of the game say Gill Ranch Storage ain’t gonna happen unless PG&E owns the project. So our man in Portland brings the Gill Ranch Storage project to PGE, asking them to be a partner – a 50-50 partner. Even PG&E is dimly aware of the need for substantially more natural gas infrastructure and is open to the deal. The mating dance begins. Understand that the mating dance between utilities is slow and cumbersome, think brontosaurs in a primeval swamp.

As this painfully slow courtship proceeds, our man in Portland works on his game plan. He has spent his career with PG&E as his next-door neighbor. It is clear to him that getting Gill Ranch Storage built for a reasonable cost in a reasonable span of time requires NW Gas control the project, be responsible for design and construction. It would be nice to exclude PG&E from the permitting process as well, but that is a fantasy. Navigating the State of California permitting process is an inside job. Navigating a byzantine maze requires a Byzantine.

But it is imperative that PG&E be kept as far as possible from engineering and construction. There is that “eptitude” vs ineptitude thing to keep in mind. There are hundreds of millions of dollars at risk. You don’t let your kids play with loaded guns and you don’t let PG&E build things. “Nuff said”!

And so our man in Portland came up with a game plan worthy of his court sense, sharpened by years of experience among West Coast utilities. Which is where we came in. The masterful subtleties of his carefully crafted game plan became obvious only after the game.

  • He selected an engineering contractor with strong credentials in gas storage but without substantial recent experience in California. He had a competent but naïve contractor. He would get no pushback from his contractor against dewy-eyed estimates of the California penalty on design and construction.
  • He selected a Goldilock’s contractor, right sized – large enough to do the work, but not so big that he might lose control or so small that they might not have a comfortable cushion of resources available. This project would get the contractor’s A-Team.
  • He cut short the Name that Tune budgeting and scheduling process. Hardly three weeks into the project he took the budget and schedule, such as they were, to the Board for final approval. For a project of this size and complexity, budget and schedule were hazy to say the least. Also, unexceptional to us at the time, was the persistent client tendency to push for a “low” budget and “optimistic” All clients do that.
  • In contrast to the three weeks allowed to develop the budget and schedule, the period of time during the bid process was unusually lengthy, requiring “unusual” The technical part of the bid was the usual straightforward beauty contest, but also required was detail on staff diversity, HR processes and energy conservation/recycling programs.

Barely a month into the project, our man in Portland was armed with Board Approval for the Gill Ranch Storage Project. The train was rolling down the track and nothing was going to stop it.

He also had the authority, implied or otherwise, to keep PG&E at arms length – in the dark if he so chose. I am certain the budget estimate we developed was not the only budget estimate on the table. Companies, particularly risk averse utilities, do not spend hundreds of millions of dollars without multiple estimates from multiple sources. But I am equally certain that our budget, the budget submitted by NW Gas was the lowest budget either Board saw. Both PG&E and NW Gas were certainly privy to other and higher budgets. But given our resume, our budget, though low, was credible.

I imagine the assumption in the executive suites of PG&E was that we, directed and assisted by NW Gas, had the “secret sauce”. NW Gas with us as their engineer could get things done cheaper and faster than everyone else because we were used to the “rough and tumble of the oil patch”. We were “lean and mean”. But NW Gas was there to keep us from doing anything unethical or illegal, “wink wink”. This is an assumption eagerly swallowed by clients such as PG&E, tied up in their own political knots and isolated from the experience of actually building things.

The man from Portland had also covered his bases on the soft issues beloved by California political overseers, such as the Public Utilities Commission. He knew that PG&E and their masters were likely to be more concerned about our virtue than our competence. In the universe of engineering companies, we had always scored well on diversity, not through design but a simple focus on talent wherever and whenever. As a result of that extended bid process, we had our ducks in a row for the commissars of sanctimony; i.e. documented standards and procedures for energy conservation/recycling/diversity/etc..

We, his contractor, were golden. NW Gas was running the project and PG&E was boxed out, oblivious to everything except paying the bills. During the course of the project, as scopes were defined, designs made, equipment purchased and construction begun, costs increased and time lengthened as reality replaced cartoons. During this entire time, PG&E was a name, but not a presence.

At some point, the game was up. All games have to end. After all, PG&E was paying the bills and even in the most inept utility organizations, the financial reporting function works well. It grew increasingly obvious to everyone that the original budget and schedule was toast, badly burnt toast. I don’t know whether PG&E was ever given the updated budgets and schedules worked up as the project proceeded. NW Gas had reserved to themself the responsibility for passing along information to PG&E.

And in a final twist, the man from Portland proved his mastery of his craft. I should have tumbled to it right away. Back in my own rookie season, I had been initiated into the subtleties of working for utilities during the construction of a pipeline for another utility, the City of Springfield in Missouri. In retrospect, like NW Gas and contrary to PG&E, the City of Springfield was adept in the strategies and tactics of their trade.

One night over adult beverages, their project manager, a Yoda like Jedi Master for sure, provided an important insight. He asked a question; “Why do you think we hire contractors to do projects for us?” My younger and still naïve self bubbled out a confident self-important answer, something along the lines of, “We have the experience and expertise you need”. He smiled, shook his head and burst my bubble, “ S*** is gonna happen on a project. We need somebody to blame for spending too much, taking too long, upsetting the locals. We blame you guys, maybe fire you, and we can still keep our jobs and live here.” Now that’s Yoda making it real.

And so the man from Portland got his project built. I imagine Gill Ranch Storage met his expectations, was built in a reasonable amount of time for a reasonable price with a minimum of headaches from his partner, PG&E. He also had a convenient scapegoat in his back pocket to blame for all the S*** that happened. Everyone could keep their jobs, continue to work together in the future, while going home from this one reasonably satisfied – including us. The season goes on with another “away” game somewhere else. No harm, no foul.

To the extent that the young lady from PG&E had influence, we took a hit by being put on the bench for PG&E’s natural gas pipeline review. But that disappointment was tempered by another lesson learned through hard experience – the best projects are often the ones you didn’t get. A prerequisite for becoming, and importantly staying a successful contractor, is to work for successful clients – in itself a good reason for the prudent to avoid PG&E.

The young lady from PG&E was collateral damage and I feel sorry for her. But having been in the game for a long time, I understand that’s the only way to learn. The referee’s have their own agendas and the game has a lot of sharp elbows and hidden tripping out on the floor.

But retirement, being forced out of the game, allows another wisdom, a deeper wisdom, to emerge. As a contractor engaged in building fossil energy facilities, I had judged PG&E on their ability to build and operate traditional energy infrastructure. As an “ex-jock” sitting in the stands, watching the game as a fan, I have a new understanding of PG&E. There is another game out there, a very different game.

Perhaps the DNA making us engineers also renders us blind to different realities. Most normal people, friends and family for sure, would agree on that point. Perhaps it is this blindness keeping us from joining our scientific brethren in the progressive ranks. An engineer is likely to make the assumption that a utility is driven to provide the best possible service at the best possible price to their customers. That is the logical assumption, but alas, you remember the old saying about ASSumptions. And remember also, logic is the Achilles Heel of the engineer.

A simple contractor out on the floor caught up in the give and take of the game can possibly be forgiven for making such a bone headed mistake. We see what we think should be there. Utilities talk service and cost all the time. You have to talk the talk out on the floor all the time or you sit on the bench. At least this is how I now excuse my former blindness.

But watching from the stands you begin to see a very different game being played. It helps to go back to “first principles”. Remember, the rationale for a monopoly is “the promise of service and most importantly, political patronage”. While recent events raise doubts about PG&E’s commitment to the promise of service, PG&E’s promise of political patronage has never been compromised or even questioned.

As the season lengthens, the games just go on and on while the needs of political patronage grow and grow. It becomes harder and harder to deliver on both promises. The promise of service must necessarily become more and more lip service. To keep the charade going, the utilities along with their political overseers must engage in something of a shell game. The voters, and ratepayers, expect reassurance from the monopoly as regards to service, but the more urgent and critical need for political patronage might be misunderstood and is best kept behind the curtain.

But California utilities are now so obviously in the business of providing political patronage that even the rubes are in danger of catching on. The voice of the customer, whether representing those who are served or those seeking political patronage, is the Public Utilities Commission. The utility’s promise of service is endlessly emphasized in public statements, but it is the California Public Utilities Commission (CPUC) that is the commanding general, issuing the marching orders.

PG&E promised service to the state’s citizens in its service territory. But as PG&E has recently proven, promises are made to be broken. The San Bruno explosion, an endless procession of wildfires and numerous reviews have clearly shown, PG&E’s gas pipeline and electrical transmission lines are at serious risk of failure and have been for decades. The death toll mounts and the costs associated with property damage are on an exponential curve. Yet despite this clear and continuing evidence of an almost criminal neglect, the CPUC has not seen fit to criticize or fine PG&E for its failures or lack of action, at least insofar as maintenance is concerned.

It would appear that the CPUC has other priorities for PG&E than operational integrity and the safety of its customers. The genius of Robert E. Lee was his understanding of his enemy, the Union’s generals. This understanding allowed him to see through the fog and feints of the campaign to discern the reality of the battlefield.

Following in the sainted General Lee’s hallowed footsteps, we might take a brief look at the CPUC’s members, the generals ordering California’s utilities. Is there any among them that has trod the catwalks of a power plant, taken in the acrid tang of weld smoke, grappled with the logistics of dispatch, or surfed the orchestrated chaos of the trading desk? I am being silly, right?

To my very great surprise, yuk yuk, I found the CPUC to be composed of lawyers, educated in the Ivy League, experience exclusively government service or “public service” law devoted to the tedious register of progressive causes. It is a conundrum that lawyers devoted to defending and fighting for the “disadvantaged and poor” have built an electrical system with the nation’s highest rates while at the same time providing the poorest most unreliable service. The other conundrum is how all these lawyers in “public service” have become so wealthy?

Only the purposefully obtuse would fail to see the obvious. The CPUC is in the business of promoting the affectations of urban fashion, what we sometimes call the progressive agenda. While the CPUC has given PG&E a pass on the maintenance of essential services and the safety of California’s citizens, they have been relentless in directing PG&E to take the actions necessary to “Save the Earth”.

To their credit, PG&E’s executives have seen the light. No one can argue that PG&E does not talk the talk and walk the walk. PG&E’s website swells with pride at the fact they reached California’s 2020 Renewable Energy Goal – 3 years ahead of schedule!!! They positively burst their buttons over the fact that their 580 MW Gateway Plant features “dry cooling”, using “97% less water”. No mention of the fact that “dry cooling” in power plants uses 10% more fuel than more efficient and traditional power cycles. No mention of the fact that the plant using all this extra fuel to save water is built on the bank of the San Joaquin River, only a short distance before all that water “saved” by “dry cooling” empties into San Francisco Bay.

One could spend hours of fun puncturing the pompous helium filled balloons floating on the PG&E website. But it is only fair to acknowledge their record of accomplishment as well. PG&E has installed 7,500 electric-car charging stations and counting while at the same time provided $800 per car “clean fuel” rebates to the drivers of those electric-cars.

But the California outages and wildfires are a public relations disaster demanding action, and the political class is all about action or even better, virtue signaling on a grand scale. There is little call for wisdom or insight in dealing with this roosting 800 lb. chicken. Everyone that counts understands that neither wisdom nor insight is of much value to the political class, as neither wisdom nor insight garner votes or puts money in the war chest.

The Governor of California, Gavin Newsom, true to his nature, has stepped up and taken action, decisive action. He reached out and brought in a world class troubleshooter to clean up this utility mess; the debacle of PG&E and the now visibly crumbling energy infrastructure of California that can no longer be swept under the rug.

Governor Newsom appointed a new commanding general, a new head of the CPUC, Marybel Batjer. Ms Batjer is transitioning to the CPUC from her role as Secretary of the California Government Operations Agency, where she “led the implementation of key initiatives to green state government and promote renewable energy”. She also is stepping away from her leadership of the DMV Strike Team.

You know, the DMV Strike Team where she made California’s Dept. of Motor Vehicles customer friendly. Before she took on the customer experience at the DMV, she was employed by Caesars (Palace) Entertainment as Vice President for Public Policy and Corporate Social Responsibility. She has been named Woman of the Year more times and for more organizations than can be counted. She is proud of her Bronze Palm award from the Department of Defense and Medal for Distinguished Public Service from the Dept. of the Navy. I swear, I’m not making this stuff up.

Does anyone else conjure up an image of Nero fiddling while Rome burns? Or perhaps the image of the Titanic’s captain ordering the rearranging of the deck chairs in response to the threat of icebergs is more appropriate. One only imagines how many trees and shrubs might have been trimmed with the money spent on fuel allowing additional water to flow into the ocean at PG&E’s Gateway Power Station.

But true to the “public interest” roots of the CPUC’s legal generals, PG&E provided nearly $750 million in discounts to “low income and disadvantaged communities” last year. These discounts were paid for out of PG&E’s share of the nearly $10 billion California collected from the burdened businesses, consumers and ratepayers in the State through its CO2 “cap & trade” program. One wonders where the other $ 9 billion went?

Of course fair is fair. While the poor can be cheaply bought with simple subsidies, suitably administered and curated by “public interest” law firms generously volunteering their partners for “public service”, Adorable neighborhoods are not so easily seduced. The Adorable neighborhoods of California require both god and mammon be served if they are to surrender their virtue.

The owners of that Adorable T-shirt, the Tesla, get the expensive charging infrastructure they need installed, “clean fuel” credits and other tax goodies, as well as preferential access on freeway HOV lanes. Homeowners in affluent neighborhoods are subsidized to install solar panels on their roofs, allowing their trading power in periods of low demand for power to run the A/C on August afternoons. Trading a kilowatt of electricity with PG&E worth two cents in March for a kilowatt of electricity worth forty cents in August is a good deal if you can get it. And it pleases the Earth Mother!! How good is that?

Wildfires are raging in California because tree branches keep hitting power lines, causing sparks – big sparks. It seems that PG&E’s overhead electrical lines have been encroached on by trees growing on their right of ways, or branches extending into those right of ways. Of course all this is caused by climate change. California never had dry autumn winds before climate change. I wonder where the well-used term, “santa ana winds”, in common use by weather reporters on local news teams came from?

Curiously absent from the current cacophony of media clucking is their lack of institutional memory, memory of past events like California Senate Bill 1463. Bill 1463 is a peek through the window into the hall of mirrors created by a one party progressive State. Back in 2016, the California Legislature, a bastion of progressive virtue but occasionally forced into recognizing reality, passed a bill called the Electrical Lines Mitigation Act. This bill required the CPUC’s generals to focus on and prioritize utility line fire mitigation, i.e. trim trees and shrubs in the electrical line right-of-ways. The members of the legislature from towns and counties at especial risk of wildfires caused by the plain for all to see dangerous state of utility line maintenance forced Senate Bill 1463 before the legislature. Senate Bill 1463 was passed unanimously by the legislature and sent to the governor for his approval.

The Governor at the time, Governor “Moonbeam”, aka Jerry Brown, vetoed the bill despite the unanimous vote in the legislature. Another Hall of Fame point guard, Governor Brown knew how to play the game. In his explanation for the veto, he said, “the CPUC has been doing just that (prioritizing fire prevention) . . . this deliberative process should continue and the issues this bill seeks to address should be raised in that forum.”

Basically the Governor was saying the CPUC was already prioritizing line maintenance and it’s none of your business anyway. Everybody move along, there’s nothing here to see. Obviously in retrospect, the CPUC’s rush to install electric car charging stations was a good faith effort to prevent wildfires in the garages of “green” homeowners.

I’m sure it was a tough call for Governor Brown. Even governors must deal with resource issues. Time and money are always scarce commodities. Repair infrastructure or drive the Green Revolution? Risk an infrastructure disaster, a possible PR disaster, or risk the fury of the radical Twitter mobs? Who knows, the Berkeley faculty might get really upset!!

If you live in fly-over country, you might laugh at the idea trimming trees is controversial, but it is no joke. The State of California stopped cutting down trees, in right of ways or forests, a long time ago, decades of time. California looks at the “controlled burns” necessary to keep forests healthy in the same way that ancient Israel looked at bacon for breakfast. The trees and the forests are sacred. Any act of despicable mankind to cut them down or trim them is heresy. There are legions of “public interest” legal teams ready to fight in the front lines of the faith.

Perhaps the scales of the Governor’s deliberations were tipped, not only by fear of the Twitter mobs but by Nancy McFadden as well. Nancy McFadden was one of those many former PG&E Vice Presidents volunteering to serve in government for the “public good”.

Ms. McFadden was reportedly Governor “Moonbeam’s” closest advisor and the driving force behind California’s “CO2 cap and trade” program used to fund various “green initiatives”. There are always pragmatists in the revolution who see opportunities to “do well by doing good”. By backstopping the CPUC’s stonewalling of utility maintenance, Ms. McFadden did well by her former employer as she saw to the public good. The veto of Senate Bill 1463 saved PG&E money while increasing the company’s income from subsidies and at the same time maintained the good will of California’s Deep State.

What can I say? California’s voters have the government and by extension, the utility system, they want. They keep voting for it. I am just an old engineer, “an ex-jock”, blind to these different realities. The future is a far country, a foreign land that lies beyond my reach. I am not sure I would want to live there anyway. Though in California, I fear the future is getting close, much too close.

In an eerie way, I find the California of today oddly reminiscent of Revolutionary France some 230 years ago. Like the French lawyers bred in the sheltered world of the salon back then, California’s elite is proud of their leading role in remaking the world into their vision of the future. I am sure that is what they believe true about themselves. But as those Parisian lawyers discovered back in the France of the 1790’s, inciting the mob into Storming the Bastille is one thing, but governing is another thing entirely.

The preening self-righteous members of California’s modern day Jacobin Club and Paris Commune must now meet the needs of the people. California’s Revolution may be reaching the point of crisis. In California, Marie Antoinette and King Louis XVI have lost their heads, the nobility and middle class has either met the Dr. Guillotine or emigrated, the ancien regime is no more. To mix metaphors once more, the Menshevik’s are in charge.

The purity of the Revolution is now being leached out in the hard realities of turning on the lights, running the air conditioners, keeping sewage off the streets. Which compromises are acceptable to Mother Earth? What will happen when all the promised unicorns and lotus blossoms continue to be elusive? How bad can things get before there are mobs in the street? Lives and careers depend on the decisions.

Certainly in thinking about PG&E, I am reminded of the words of Jacques Mallet du Pan, an observer of the French Revolution, describing the fate of those who began the Revolution and then failed to deliver utopia.

“The Revolution eats its children”

Robespierre, Marat and many of the others of the French Revolution who brought down the King and banished the Church promised utopia. They believed they were creating a world familiar to those of us today in sympathy with John Lennon’s, “nothing to kill or die for, and no religion too”. But once the old order was dispatched, then the Revolution had to feed the people, warm their apartments, keep the streets from drowning in sewage.

In France they were known as the sans culotte, the men and women in the street inflamed by the utopian rhetoric of the lawyers running the Revolution. As the sans culotte got hungry, as they heard one excuse after another for why utopia was delayed, they took to the streets. The sans culotte took matters in their own hands.

As the beleaguered executives of PG&E twist in the fires of bankruptcy court and the heckling of the media’s hypocrites, they resemble nothing so much as the California Revolution’s equivalent of Maximilien Robespierre and his fellows being taken to the guillotine in carts stained with the blood of King Louis and his Queen. Robespierre and fellows found it easier to inflame the mob, to make promises than to deliver on the promises.

Karl Marx, writing from a perch close by, penned a well-known aphorism describing the French Revolution and the decades after.

History repeats itself, first as tragedy, then as farce.

One wonders, is a new Napoleon Bonaparte, even now, rising in the ranks of California’s progressive elites? Or perhaps, depending on circumstance and time, a new Groucho Marx?

5 Responses to “California’s Burning – PG&E, Gill Ranch and Me”

  1. Jeffrey Esbenshade says:

    Governor Newsom made the comment he wished Warren Buffett would purchase PG&E.

    Gov is still waiting for Warren’s phone call. MidAmerica Power is owned by

    Buffett and it provides electric power to Iowa, 40% is generated by windpower.

    Buffett also owns Nevada Power and Light. PG&E would be a good fit for Berkshire

    but Mr Buffett is not only worried about a good return on his money,but is worried

    about the return of his money. La-La land is a good example of Socialist running

    out of other peoples money.

    • Brad Smith says:

      I guess smart money is called smart for a reason! Gov Newsom is looking for dumb money. Maybe that’s the point. Will the millions of CA tax payers ever recognize the cause and effect of their choices? What will the end of the downward spiral look like and is the rest of the country only a short step behind?

  2. Phil Kinney says:

    How long will it be before California either claims bankruptcy and/or expects the Federal Government (We the People) to rescue them from this progressive stupidity?

  3. Geoff Singleton says:

    Power,politics and ambition are the same over the world. Having worked as an Engineer and a Suit for an Electricity Utility in The UK and Australia I can recognise a lot of what you describe.
    About 30 years ago I visited the PG & E Electricity Network Control Centre in San Francisco as it was a good example of how to manage an electricity system. It was just after the earthquake and so P G & E had great experience on how to manage an emergency situation. England doesn’t get many earth quakes, but I still listened. However the opinion of the international utility community then was that PG & E were a good company. However this was 30 years ago.
    Tree cutting to avoid contact with power lines is a basic operation.You just have to get it right. It doesn’t get done when the Suits want to cut budgets. You probably will not get any fires in the contact between line and tree in England as it seldom gets that hot but in California (and Australia) you surely will.I saw an impressive example of overkill when an Australian utility had used some chemical treatment on a tropical forest and had blighted a very wide corridor in the forest. Colour photographs were on every Australian national newspaper. The Australian political classes really did enjoy that. It made me shudder to think about it.
    Politicians and Suits do like to blame others. In the UK there was a major power failure for about four hours some months ago. The Electricity Regulator (Government) had a statement out within the hour blaming National Grid (my old company). After a torrent of P.R. on one side and careful analysis by Engineers on the other side it has emerged that National Grid’s system worked as it should. The two major fault’s by the generators’ plant should not have occurred and that the amount of plant reserve on the system was not adequate. Who determines the amount of reserve? The Electricity Regulator.
    There are moves in the UK to nationalize National Grid and others. I worked for them when they were nationalized and I remember how bad the nationalized organisation was back then. Politicians enjoy playing theses games.
    Fracking has been banned in the UK since a General Election was recently called by Boris our Prime Minister. He wants the votes of those communities in the north west of England who are campaigning against fracking. Yet again more games by politicians for their own purposes.
    I hope that my ramble hasn’t gone on too much but I saw many parallels. I enjoyed Yoda man- he was very wise. There is probably a Yoda man on the side of the contractors with words like “change to specification.”

  4. Denver East says:

    I had an opportunity to visit Gill Ranch as a product regional for a PRV manufacture that had been specified,we were the standard for all the NG companies and were resolving a seal compatability issue. We drove for miles amongst the pistachio groves, in itself awe inspiring, and came upon a clean well built facility, as was typical of your work Bill. I also remember my first sales call with you in your home office, i think we were talking pressure switches, before you grew and moved downtown.
    I have witnessed the retraction of maintenance at the utilities for years as both a customer and vendor,having more power outages at my house in one season than in a decade growing up, and lack of infrastructure projects that left me scratching my head contrasting with the growth. I assumed it was mergers, diminished local control,and heirarchy of shareholder over customer, as this has been going on for quite awhile. I see the green effect you are talking about, a significant factor and heightened as alot of noise to cover up where all the money went?

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