Utilities: Last Week Tonight with John Oliver (HBO)

moving on our main story tonight concerns utilities specifically electric utilities the company is responsible for delivering us power and also giving us the creepiest mascot ever created ready kilowatt a hell creature who for decades appeared in ads for over 200 electric companies like this one about him emancipating woman in the home and this one where he tells a housewife don't kill yourself it ain't worth it reddy even appeared on children shows where he undoubtedly gave a whole generation nightmares what's going on here ha ha you should know that you can expect anything to happen here mr toot boy i'll say hey what's happening now those peanuts they're floating in the air that's my new electrostatic generator get out of there mr toot that's the only time i've ever been scared for a clown we can't actually show you the rest of that video because and this is true if you watch it until the end ready shows up behind you and brutally murders you now you probably don't give too much thought to your local electric utility but if you do it might be because they're charging exorbitant rates for a basic human necessity as this north carolina pastor explains one of the founding members of this church sister linda jones she literally cut her pills in half skipped days in order to pay her life bill god bless her so she passed on and there are hundreds of people right around here who need that help that is terrible and in case it bumped you at all you're right that was a property brother that you just spotted there he made a documentary about utilities and it's actually pretty good to the point that you're even going to see a little more of it later on and if you're wondering which property brother that is i'll give you a clue it is the circumcised one and if you don't know which property brother is circumcised you're clearly not that big a fan of the property brothers and high bills are just the beginning of the problems here because utilities are also exceptionally prone to scandal in fact just google your utility company right now and the word scandal and chances are they've gotten into some major trouble it's basically like googling your local jimmy john's and e coli or the name of your favorite teacher from high school on january 6th you're not gonna like the results that you find and at their worst utilities can even be deadly take pacific gas and electric one of california's largest utilities we've talked before about the 2018 campfire the deadliest wildfire in california history and how it all started when this hook holding up a pg e transmission line broke causing the line to ignite the brush below eventually decimating several nearby communities and leaving 85 people dead pg e has since paid fines and settlements but it's still very much in operation despite the fact that wasn't close to the only scandal that they've been involved in as this reporter will tell you this is a company that was fined hundreds of times and faced more than two almost three billion dollars worth of fines you know if pg e was an individual and not a corporation i think by now they would be in prison there's just been repeat offenders they've been on probation they violated the probation the problem is you can't take a corporation and put into prison yeah he's right you can't even though many corporations clearly deserve to be imprisoned from enron to purdue to any company that insists on talking like a sassy on social media hellmann's once tweeted you're in their dms we're getting spread on their bread and why you don't need to do this hellmann's you can just be mayonnaise but pg e is not only not in prison it is still supplying power to millions of californians who have no choice in the matter and if you're thinking how the is that possible that is what this story is about it's about the incredible amount of power that we give to utilities how weakly they can be regulated and the damage this can do and let's start with the single most important thing to know about utility companies which is that for most of us they're actually the only game in town if you want to go buy an iphone or any other kind of consumer product you go out to a store and you have a number of choices with electricity in most of the country you really only have one choice and that company has a monopoly exactly in our modern economy you are supposed to have choice just look at all the streaming services out there if there's a blockbuster 2.0 superheroes and old racism anime probably crashing on you right now no idea no idea and until recently news quibby that is arguably too much choice but utilities operating as natural monopolies dates back to the fact that around the start of the 20th century we needed to build a nationwide power grid from scratch and that obviously required a huge investment companies were only incentivized to do that with a guarantee that they'd be able to operate in a non-competitive environment and at the time that made sense but those monopolies persist to this day and mostly as for-profit investor-owned companies now in exchange for giving utilities a deal that sweet we did put some restrictions in place the law says that they should spend the least they can while providing quality environmentally safe service which sounds great because it caps their ability to make too much money but and this is a huge but there is a carve out because when they build something a piece of physical infrastructure they are allowed to then pass along that cost to you through your bill plus an additional percentage they get to keep as profit usually around 10 percent and this creates a clear incentive the bigger the project like a power plant the more profit they make as this activist explains big monopoly utilities get a guaranteed range of a rate of return on their capital expenditure so like a waiter in a restaurant where there's a guaranteed tip the more that is spent if you buy dessert or you get a bottle of wine the more money they're going to make right if your profit is pecked to doing certain things you're going to make sure that you do those things more it's just like if hbo only paid me for every time i got weirdly horny for an animal except that's actually a bad example because the show would pretty much look exactly like it already does not now not now i'm trying to make a point go away before i change my mind goodness gracious and in the best case scenario this might mean that utilities are investing in infrastructure that is badly needed the problem is they can also be shameless in increasing spending even when it is not needed or on projects that are actively falling apart take south carolina when utilities there tried to add two nuclear reactors to an existing plant the project's cost spiraled and a massive federal investigation later revealed that executives at south carolina electric and gas and its parent company knew the project was facing major delays and cost overruns but withheld that information in order to keep it going meanwhile local customers paid more than two billion dollars in the form of higher bills for a project which by the way never generated any power and some working on the project at the time were troubled by what they were seeing just listen to this leaked voicemail from a vice president at the parent company who later became a whistleblower in which she tried to warn her colleagues about what was happening they are mismanaging that project and it's a jaw's expense they're doing it because they want to make money and they're propping up earnings to be able to make their um bonuses and it's going to be at your expense yeah that's pretty shocking isn't it not just what she's saying there but also that people still leave voicemails absolutely no one should be doing that anymore in fact every voicemail greeting should just be sorry i missed your call please don't leave a message after the tone just text me instead because it's not 1997. and overspending isn't the only way that utilities incentives can wind up screwing over customers because they can deliberately stifle innovation that might make power cheaper or be a net benefit to society as this solar power executive will tell you now solar is becoming real these utility monopolies are saying wait a minute we got to crush it before it gets too too big they want to build more plants so they can make more money and if we take a little bite out of that apple and we say hey guys we got solar panels everywhere on all these homes and you don't need to build that many more power plants then the utility goes well wait a minute how am i going to make more money next year yeah exactly people putting up solar panels and generating their own electricity threatens the anti-competitive structure of a utilities monopoly so they're obviously going to try and step in and block it who wants competition it just makes things harder you think i want to compete with euphoria or love island or this youtube video of ducks annihilating a bowl of peas [Applause] you could be watching that on a loop right now instead of watching this show you idiots why are you still here make better choices some activists have even used rooftop solar as a way of challenging the monopolies in their states remember that church from earlier where the pastor was talking about people cutting pills in half to make ends meet well in 2015 to help cut costs it partnered with this local non-profit and in an attempt to challenge the laws on the books the nonprofit installed a small solar panel system on the roof of the church at no upfront cost financing it by selling electricity to them at about half the rate to their utility duke energy charged now similar arrangements are permitted in other states but not in north carolina and duke energy pushed back hard asking the state's regulators to issue a cease and desist to the non-profit and invoke its power to find them up to a thousand dollars a day for every day it sold power to the church and in the end duke energy got what they wanted that church's solar arrangement was shut down and any hope of replicating it in the state was squashed and when circumcised property brother asked duke about this whole saga their response wasn't great faith community church wanted to test regulation in north carolina by doing something that was basically illegal they were trying to pick a fight you could say that they had a good setup to get publicity this was a african-american church and we're a big utility and we're a target and sometimes there are groups out there they're not trying to advance policy they're trying to get media attention and they they did a good job here are there situations where as a human being you have a conflict as a utility company where you're saying this is how it has to be versus maybe there's a bigger picture with something that's broken i think that's just the way it has been wait wait wait just the way it's been has historically never been a great justification for something still happening in fact there is only one time that that works as an argument when you're talking about the milwaukee brewers sausage race now why do a bunch of sausages race around the fields before the bottom of the sixth inning because that's just the way it's been it doesn't make sense and may it never change long live the racing sausages and there are examples all over the country of utilities getting in the way of people using solar energy the argument being if people start leaving the grid and generating their own power then over time the cost is going to go up for everyone left behind and look there is a longer conversation to be had about the proper way to build people who use solar panels but making it cost prohibitive is definitely not the answer and if you're thinking shouldn't there be someone who can rein these companies in well in theory there is most states have public utility commissions they are responsible for things like signing off on any big investments proposed and also overseeing the setting of rates unfortunately many of them are badly outmatched by the utilities that they're supposed to regulate and this can have major consequences a few years back mississippi power ran into massive cost overruns on a new plant that it was building which was initially expected to cost 1.8 billion dollars but ended up ballooning to seven and a half billion and in hindsight there were obvious red flags that you would hope the state commission would have been more wary of from the very start just listen to a company representative explain his side of the story can you tell us why the project is over budget and also behind schedule i would tell you that if we made any errors in judgment at all any missteps is that when we took that proposal to the commission we were only at between 10 or 15 percent of design and so i think it's the little engineering that we had done at that particular point in time that has sort of come back to haunt us a little bit in terms of cost and schedule wait let me get this straight the plant was only 10 to 50 designed and the commission let it go ahead anyway that is not how designing complex energy plants should work that's not even how designing lego sets work that's why you've never seen one called a little tree and you figure out the rest now in mississippi's case the problem seems to have been a commission rushing to approve a project without doing proper due diligence but in other cases like alabama's state commission the problem seems to be ideological it has been described as one of the most opaque politically motivated and environmentally hostile commissions in the country their commissioners are actually elected and i do want to show you one campaign ad for the woman who is currently running it twinkle's priority is our priority jobs we need more conservatives like twinkle who put jobs first twinkle is a proven conservative republican who has stood up and fought the liberal special interest in washington conservative republican twinkle andrus kavanagh our way of fighting back yeah that woman is named twinkle that is her actual given name as in when she was born her parents were asked what do you want to name your baby and they genuinely replied twinkle definitely twinkle she even confirmed this story yourself saying my daddy thought i needed a fancy name it may be cute for a three-year-old but it gets old and honestly i could see how being called twinkle could get older for a while but let me just say this twinkle for everyone who isn't you calling you twinkle will never get old it will never get old twinkle and look i'm not saying that twinkle is a bad commissioner because she's called twinkle i'm saying that twinkle's a bad commissioner because for one thing when there was a push for more open hearings on electricity rates in the state she outright said i want to exclude the environmentalists from taking part in the process and suggested that environmental extremists only wanted these open proceedings so they could trot out their fancy san francisco environmental lawyers and junk science hucksters and the thing is it's not just twinkle when one of alabama's other commissioners chip beaker again real name because it seems alabama's utility commissioners must by law sound like hannah barbera cartoon characters when chip beaker was running for his position he wrote in an op-ed the so-called climate change crisis is about as real as unicorns and little green men from mars which is obviously ridiculous because climate change is very real and unicorns sadly do not exist which i know is not ideal although if you're in the market for a majestic creature with a lot of horn this guy may be able to help you and look having a commission run by science denying ideologues is bad enough but in other states public officials can appear fully in utilities pockets take ohio a few years back a big utility there first energy was caught up in this massive scandal ohio house speaker larry householder and four others have been charged with racketeering accused by the feds of funneling millions from the energy company into a 501c4 dark money group called generation now okay first generation now sounds like a failed 90s boy band whose members are all now spokesman for different cryptocurrency companies but very basically what happened there is that first energy funneled 60 million dollars to the speaker of the ohio house to get him to pass a bill hb6 that has been called the worst energy bill of the 21st century now i have to tell you the house speaker in question denies wrongdoing and is still awaiting trial but what is very clear is that first energy was working extremely hard to influence the decision-making process they actually paid the chairman of the state's utility commission 22 million dollars in consulting fees in the years directly preceding him becoming their regulator and while he denies doing anything improper i will point out that on the very day the bill passed first energy ceo wrote to him saying and i quote hb6 anybody who ain't us which is very cool right and just so you know the man who wrote that is this guy who looks like he's left lengthy reviews for multiple gas grills on homedepot.com this man wrote the words anybody who ain't us this old white man take those precise words with his old white fingers so look to recap our utility system largely consists of for-profit companies with monopolies over an essential service building as much as they possibly can so they can pass the cost along to you on your electric bill and to see just how bad all this can get let's go back to pg e arguably california's most hated company in fact a quick skim through any pg e affiliates yelp page gives you just a taste of that because you'll find reviews like absolute show garbage company you pg e your day will come and my personal favorite the actual technicians lovely often hot to boot phone people hit on this either dismissive and stupid or thoughtful and kind corporation itself evil empire personified which is a lot more nuanced than you typically find in yelp reviews look i understand that the lowest ranking smoking hot employee that i interface with isn't to blame for the company's larger structural problems but for the record everyone in the c-suite with a cactus and you can see why californians hate pg e so much in just one three-year time span it was responsible for around 1500 fires that's an average of more than one fire a day and at that point pg e a lesser utility and more a fire company that occasionally also delivers power to people's homes and so many of pg e's problems stem from the way that they are incentivized to operate because remember their profits are paid to money that they spend on new infrastructure that they build not on what they spend maintaining it or the area around it and when you don't maintain equipment eventually it fails that old hook that broke and started the campfire was 97 years old and it's not even their only hook that was dangerously worn down this hook found a couple miles up the line from where the campfire started shows just how bad things got a groove more than halfway through the metal from decades of grinding against the hole it hung from holy decades of grinding isn't exactly a phrase that you want to associate with a vital piece of our power grid it's barely a phrase you want to hear at your grandparents 50th anniversary i mean you're happy for them right it's obviously what's kept them together for so long you just you don't want to hear it and it's not like pg e didn't have the money to perform basic maintenance because in the five years before the campfire it issued over five billion dollars in dividends to shareholders look clearly this isn't a system where you the customer are going to be prioritized if anything the model only makes sense if the company's shareholders are viewed as the customer and your bills are the product and what you would hope elected officials in california would crack down on pg e many take money from them and don't seem to see anything really wrong with that just watch as california's governor blows off a pretty pointed question pg e was convicted of a federal of six federal felonies in 2016. after that you took more than two hundred thousand dollars to help get elected how should people trust you to be running the show to come up with the solution i um i i wish you luck with whatever you're working on but uh that's a strange question wait is it though is it because that seemed pretty reasonable to me it's not that reporter asked mr governor why do you think the wiggles had princess diana killed that is a strange question there was no big red car anywhere near the scene but what he just asked you deserved a proper answer and yet frustratingly if you live in california and pg e is your provider there is nothing you can do every time you turn your lights on you are reminded that your utility has killed people and the only real recourse you have is giving them a shitty yelp review so how do we fix this well if we were able to start our power grid over from scratch what we would probably do is make utilities publicly owned and run by the government it wouldn't fix everything things might still go wrong but you would remove so many of the worst incentives here unfortunately transitioning now would be hugely expensive and in all likelihood isn't happening anytime soon but there are smaller steps that we should also be taking in the meantime for instance instead of having a system where utilities are incentivized just to build stuff we can incentivize them to work directly in the customer's best interest by investing in things like maintenance renewables and energy conservation this is something known as performance-based regulation and several states are already trying it now as for the regulators look commissions will unfortunately probably always vary in effectiveness depending on whether it's staffed by people who actually give a about this or let's say someone named twinkle but we have to make sure that under-resourced regulators get more support more access to technical expertise and more jurisdiction over the companies that they monitor and at this point i would usually bring out a mascot that we made for utilities that's representative of just how terrible and horrifying they are but amazingly i don't even need to do that do i because they already made a murderous hell demon almost a hundred years ago with ready kilowatt so all we really need to do is simply bring ready back so ladies and gentlemen i'm thrilled to present to you the glorious return of ready kilowatt ready ready ready where are you where are you ready yeah this is creepy i'm already regretting this where is the clown ready where's where's mr toot he's dead john yep i killed him of course you did i'd like to leave ready this is a bad idea who said you could do that why the world is my monopoly and i alone control it okay you want to use your refrigerator yes yes i do you want your lights to go on and off yes i do then your local utility is your gun right i am your god look i cannot believe i'm saying this ready but you are actually too good at representing how shitty utility companies are oh you have no idea why i could kill you right now and there's nothing anyone could do about it don't be nasty about it oh oh what happened to the lights blackouts happen john no no you turn the lights back on you freak you can do it yourself john just go ahead and pull that lever oh wait just this one here uh-huh oh okay here it goes i am gonna get such a fine for that that's our show thank you so much for watching see you next week for another episode of last week tonight with ready kilowatt [Laughter] bye-bye [Music] [Laughter] hahaha you

Channel: LastWeekTonight

Views: 5,334,615

Keywords:

Id: C-YRSqaPtMg

Length: 24min 28sec (1468 seconds)

Published: Sun May 15 2022

Reddit Comments

[u/wanted_to_upvote]

The basic message of the program was that the utilities have incentives to build things that are not in alignment with consumer needs. If they build new plants or infrastructure they get a guaranteed profit based on the cost as a percentage, even if it is horribly mismanaged and goes way over budget. That is actually good for their bottom line. Their game is to get the PUC to approve things and then build them.

[u/pharohdigg]

Note that SDGE parent company, Sempra Energy spent 2.4 million dollars in lobbying in 2020 alone! https://www.opensecrets.org/orgs/sempra-energy/summary?id=D000000415

[u/speeder2002]

I can't believe SDG&E didn't even get a shout out for being the most expensive in the nation

[u/Brandilio]

TL;DR - Our leaders are corrupt.

[u/ThoughtCenter]

America has successfully legislated itself into a corporate-ocracy, where everything is controlled for the benefit of rich corporations, not constituents. And by law, there’s nothing that can be done.

[u/JustWashy]

What does SDGE actually provide? Do they own the infrastructure? the plants generating electricity and gas? Are they providing maintenance? Are they administration?

[u/goofyfooted-pickle]

Spot on. Utilities in here in CA are all about PROFIT. San Onofre is a great example. SDGE built it, sent the electricity out of state to other markets and then had to shut it down because it was not safe. Annnd who paid for that entire friggin fiasco? The consumers! And that’s just one of many examples (don’t forget the time multi billion $ profiteering PG&E playing the bankruptcy card).

It’s atrociously corrupt and broken. Break them all and turn them into truly public utilities, and while we are at it do the same thing to ISPs like COX.

[u/FLAdOpen]

Let us not forget that SDG&E just submitted their request to raise prices again in 2024!

https://www.10news.com/news/local-news/sdg-e-proposing-to-hike-rates-beginning-in-2024

[u/CoolPrius-Nobody]

I’m as liberal as they come and this should be an issue that all of us as consumers should hold our elected officials accountable. They’re all in on it. Gavin’s response is total bs and I’ve voted for him and voted not to recall. Not everything is blue and red, we’re all victims of this.