Cities can cost effectively start their own utilities

Urban–Rural Cross-Subsidies and Wildfire Risk

• Many argue PG&E’s core problem is California’s liability regime and the cost of serving wildfire- and rural zones, which is effectively socialized through very high urban rates.
• Several commenters support cities carving out their own utilities so dense, low-fire-risk customers stop subsidizing undergrounding and line maintenance in hills and forests.
• Others warn this “cherry picking” would strand poorer/rural users with unaffordable power and effectively unwind rural electrification; some explicitly say that forcing people out of high-risk fire zones is a feature, not a bug.
• Alternatives proposed for remote areas: off‑grid solar plus batteries, local microgrids, or community-scale storage at the edge of transmission lines.

Legal, Regulatory, and Political Constraints

• Debate over whether California could use liability to bankrupt PG&E and “scoop up” assets runs into the federal takings clause; most think outright confiscation is unconstitutional.
• The CPUC and other state bodies already micromanage PG&E’s capex and executive pay, giving the state de facto control without ownership—and without direct political blame.
• For cities to municipalize, they must either buy PG&E’s distribution assets (likely at a high, regulator-mediated price) or build a parallel grid; SF’s failed bid and Boulder’s decade-long fight with Xcel are cited as cautionary tales.

Rates, Costs, and Efficiency

• Commenters note stark contrasts: municipal utilities in Santa Clara, Palo Alto, Alameda, Sacramento, Austin, Chattanooga, etc. charge roughly half or less of PG&E’s ~40–50¢/kWh retail rates.
• Skeptics point to PG&E’s ~11% profit margin and argue you can’t get 30–50% savings just by removing profit; they suspect the article’s numbers ignore major capex, wildfire liabilities, and hidden costs that cities would still face.
• Others counter that PG&E’s distribution charges and wildfire/legal overhead are inflated by decades of mismanagement and perverse “cost-plus” regulation that rewards spending, tree trimming, and undergrounding over smarter protection tech.
• There’s debate over rate design: fixed vs per‑kWh charges, rooftop solar cost shifting, income-based fees, and whether cross-subsidies should be explicit taxes instead of buried in tariffs.

Governance, Privatization, and Ideology

• Supporters of municipal utilities frame this as a classic natural-monopoly case: public or cooperative ownership avoids shareholder extraction and can reinvest surpluses in undergrounding and reliability.
• Critics worry city governments will raid utility surpluses, under-maintain infrastructure for short-term political gain, or lack technical competence.
• Thread repeatedly veers into broader arguments about socialism vs capitalism, neoliberal privatization of public assets, regulatory capture, and whether public or private entities have actually delivered cheaper, more reliable power in practice.