New York Blackout Prompts Call for Publicly Owned Energy

July 25, 2019

Energy mismanagement in New York City and California has sparked questions about their ownership models. Democracy Collaborative’s Johanna Bozuwa says making utilities public would help foster democracy and fight the climate crisis

Energy mismanagement in New York City and California has sparked questions about their ownership models. Democracy Collaborative’s Johanna Bozuwa says making utilities public would help foster democracy and fight the climate crisis


New York Blackout Prompts Call for Publicly Owned Energy

Story Transcript

DHARNA NOOR It’s The Real News. I’m Dharna Noor.

New York City has seen mass power outages on two consecutive weekends now. Some 18,000 New York City customers and 4,000 more in surrounding areas were without power by early Tuesday. And some lost power by Sunday night when Con Edison cut off supply to about 50,000 customers in the city and Westchester to avert strain on the system, even as temperatures were soaring to over 100 degrees Fahrenheit. All of this has sparked calls from some to make Con Edison a public entity. At a press conference on Monday, New York City Mayor Bill de Blasio said, “We don’t depend on a private company for water or for policing or for fire protection.” He went on, “If they can’t handle the job, it’s time to look at new alternatives.” And New Yorkers aren’t alone. On the other side of the country this month, the California legislature passed a bill to create a ratepayer-funded $21 billion fund that would help companies like PG&E, Pacific Gas & Electric— whose infrastructure fueled the deadly fires in Paradise, California last year— pay for civil legal claims made by the victims of wildfires. And that sparked calls from some in California for public ownership too.

Here to talk all things public utilities is Johanna Bozuwa. She’s a Research Associate at the Democracy Collaborative and her latest piece is “Shifting Ownership for the Energy Transition in the Green New Deal: A Transatlantic Proposal.” It was just published in a new series from CommonWealth. Thanks for being here.

JOHANNA BOZUWA Thanks, Dharna, so much for having me.

DHARNA NOOR So, Johanna, I wanted to start by looking at this clip that a reporter from PIX11 in New York City actually posted on Twitter. It’s where some city residents are responding to the fact that, you know, they’re just finding out that some of these shutoffs were actually intentional.

PIX11 NEWS REPORTER So now what we’re hearing is that Con Edison purposely turned off the lights in this neighborhood to prevent a bigger outage. What do you guys think about that? [crowd murmurs]

NEW YORK CITY RESIDENT Oh, really?! Oh, I didn’t even know that.

PIX11 NEWS REPORTER What do you think about that?

NEW YORK CITY RESIDENT That’s crazy if that’s the case. So what? We’re not important enough? Like, we’re supposed to sit in the dark while you what? Who is going to be protected? Who are they protecting? What about us? So you’re making us suffer to preserve whom? Who are they preserving? So why? We’re not important? I’m trying to understand this. [laughs] I’m so confused. This is news to me. So exactly what are they looking to accomplish? So we need to suffer so that you could do what? Preserve who? What about the preservation of us?

DHARNA NOOR So I guess, as she’s raising, you know, these kinds of crises often raise these questions about who these utility companies are really serving when these moments of crisis hit.

JOHANNA BOZUWA Yeah. And I think that the problem is that they’re serving a very specific public. And, you know, they’re investor-owned, they’re private. They’re trying to make a buck at the end of the day instead of actually serving the whole public of New York, and this is something, as you mentioned, is not just New York-based. This is something that we’re seeing across a lot of the United States where investor- owned utilities are operating about 73% of our grid right now, which is going to continue to lead to these types of situations as climate hits us more. And you know, these private utilities are part of the problem. They’re the ones that aren’t switching away from a fossil fuel paradigm, which we need to rapidly move away from or else we’re going to see even more intensive types of heat and outages, like we just saw in New York.

DHARNA NOOR Yeah. And again, in California we’re seeing, you know, some similar pushback. Folks are afraid that this new wildfire fund created by the governor is actually going to be, sort of, a back way to bail out PG&E for their role in the Paradise fires that, you know, we’re deadly. Talk about how, you know, public ownership could not just manage the transition to better management of these kinds of crises, but actually fight the climate crisis. Because you’re arguing that this is actually a way to move away from fossil fuels, not just to better manage the crises that they cause.

JOHANNA BOZUWA Yeah. And I would say that one of the things with the California situation is that there, right now, you’re seeing this really interesting thing happening where all these hedge funds are going after PG&E because they think that if they invest in this risky business, they’re going to reap the rewards. And you’re seeing fighting happening and that’s not the type of thing we want happening with something that’s so central and integral to our daily lives. And you know, it also has the ability to incite wildfires all across California. And the reason that I believe that it needs to be put in public ownership is that means that we have more checks and balances, we have more opportunities to engage in a democratic process in a way that we would not have otherwise, or currently do not have in the investor-owned utility model. And in terms of fighting climate change head on and the energy transition, you know, PG&E actually did invest in climate denialism for a long time along with many other utilities, much like Exxon and Shell and some of these other big fossilized — fossil energy providers. And—

DHARNA NOOR I think “fossilized” is also a good way of talking about them at this point. [laughs]

JOHANNA BOZUWA I’d say. [laughs] Definitely. And you know, I think by putting it in community ownership, we are going to see a transition that’s much more rapid because people are in charge and so they have the access and avenues to do so because it’s also not profit-driven. It’s about providing a public service. And in California, we’re already starting to see public ownership through what we call community choice aggregation, which allows communities to actually take over the generation. So you know, moving from things like coal, oil and gas towards renewable energy. They get to make those decisions, not PG&E.

DHARNA NOOR Could you talk a little bit more about that program? Those CCAs where essentially, you know, they’re arguing that they can provide more renewable energy for lower costs. Is that the case? And can that work without something like a public takeover of PG&E?

JOHANNA BOZUWA So the CCAs are a really powerful model in terms of their ability to — actually they do provide a lot more renewable energy at a cheaper rate in many ways. One of the best examples is in the East Bay where we’re seeing a real focus on local business enterprise and implementing that and a real focus on providing renewable energy. And you know, this is what energy democracy looks like in practice, so a democratic energy where the benefit is distributed to everyone within the community. So with CCAs, I think that it has created a lot of ability for people to see how they have agency. And I think that’s going to translate really well into a situation in which we could be in charge of our public utility in California because they laid the groundwork, they know how it operates, and they’re starting to invent and identify democratic processes that work for the locality.

DHARNA NOOR And how exactly does making utilities public and removing, you know, those investors from the equation incentivize different decisions around energy? Because of course even if it’s not profit-driven, we can imagine that even in states that are controlled by the Democratic Party— like New York or California— there could still be room for an austerity model where, you know, the government is still trying to save money and could do something like shut off people’s energy in times of crisis. So how would that incentivize different forms of energy? And then, how could we hold those sort of public utilities accountable in those situations?

JOHANNA BOZUWA Yeah. So I think with the investor-owned model, what we’re seeing is that one of the ways they make money is by just investing in big infrastructure and that doesn’t always equate to a resilient grid. It equates to things like pipelines being implemented. And in Virginia— very close to where this newsroom is based— Dominion Energy is one of the big bad wolves of the investor-owned utility world. And they are making ratepayers pay for poisonous pipelines that is actually exporting that energy out of the United States, and that’s not the type of energy system we want to see, and that’s incentivized by an investor-owned model.

That’s not to say that publicly-owned utility as they currently are formed work perfectly. And I think you hit the nail on the head by saying that austerity measures are things that we’re seeing across the United States. And I think that this really speaks to the necessity of democratic public ownership and ensuring that there are avenues for people to engage because, you know, I think we have seen that water or energy have been mismanaged by public institutions as well and don’t center frontline communities for instance. But I think we have a much better chance of getting that with a public utility when those profit motives and when that ability to affect the legislature is gone. Because of course, investor-owned utilities are companies that can also invest in our political system and reap those rewards in big ways.

DHARNA NOOR Right. Here. Yeah. Recently in Baltimore, just a year ago, we had this massive victory. The first major city to ban water privatization was here in Baltimore. But as I was reporting on this, I heard some of that kind of pushback from folks. They would say, you know, why don’t we give a private company a chance because the water system here has been so mismanaged? We’ve gotten incorrect bills. We’ve gotten really, really high bills. But you know, you’re arguing that essentially there is a precedent to make these sorts of private utilities public, and that there’s precedent to do so in a way that’s actually democratic and where the utilities are held accountable. Can you talk about the history of that in the US a little bit?

JOHANNA BOZUWA Yeah. So a really good example to me right now is in Nebraska. So Nebraska is actually a fully publicly-owned state when it comes to their energy, which is very rare in the United States and it’s also in relatively conservative area, right? And for a long time they’ve had issues with shut offs, and increasing rates and things of this nature, but they have an elected board system. And over the past two elections, they have been able to switch those seats towards climate activists that  then have been right there at the front trying to shift this public organization towards a more climate resilient future, which is already starting to see the benefits. They’re already integrating more renewable energy. They’re thinking about what the rate structures look like. And so, I think that that shows the potential to me if we are in charge. It doesn’t mean—It doesn’t give us a check plus right from the beginning. But if we are good and we design these institutions correctly, we can have an effect on the long-term.

DHARNA NOOR Yeah. We were saying off camera that, you know, just a few years ago even, I think that these ideas were seen as a lot more radical than they are now. Could you talk about just lastly I guess, sort of, the movements and the pressure on governments in New York and California and elsewhere to make these kinds of utilities public?

JOHANNA BOZUWA Yeah. So there has been a really big focus, you know, within the climate realm for a long time around “we just need to open up the market, and then everything is going to be great, and we’re going to get so much renewable energy.” I think what we’re seeing is that we have too short of a timeline to check if that’s going to work, and that the free market isn’t bringing us what we want, and that these utilities are still taking over so much of that market anyway, so we need to actually be in charge. And that’s why we’re seeing this resurgence that’s coming with this, kind of, democratic left that’s gaining traction and momentum as people are sick of dealing with austerity measures and are sick of dealing with unfair practices and corporate socialism in so many ways, right?

We need socialism that’s for the people. We need entities that are going to work for us. And we’re seeing, you know, in California a huge number of people starting to ask for this type of public ownership. New York—One of the really interesting examples is Nationalize Grid in Rhode Island that was one of the first really exciting campaigns at a state level talking about public ownership from this perspective of a public good, which is really exciting. And you know, we had things in Boulder as one of the longest-standing cases of climate-related reasons for taking over a public utility. It’s been a long haul for them, but they’re getting so much closer. And I know they just won another vote that puts them in a position to take over the energy systems. And that’s because of concerted efforts of movements being at the front and asking for this type of accountability.

DHARNA NOOR And you’re asking for this type of accountability in your new piece in CommonWealth not just for the energy grid and not just on the state level, but also at the national level. So stick around for part two. We’re going to talk about what it would mean to nationalize the fossil fuel industry. Thanks for being here, Johanna.

JOHANNA BOZUWA Thank you so much, Dharna.

DHARNA NOOR And thank you for joining us on The Real News Network.