PG&E files for bankruptcy amid wildfire lawsuits
By SUDHIN THANAWALA
Tuesday, January 29
SAN FRANCISCO (AP) — Pacific Gas & Electric Corp., the nation’s biggest utility, filed for bankruptcy reorganization Tuesday in a bid to relieve itself of some of the billions of dollars in damages it could face as a result of California’s devastating wildfires.
The Chapter 11 filing allows PG&E to continue operating while it puts its finances in order. But the move could ultimately drive up electricity rates for customers, jeopardize California’s ambitious transition toward renewable energy and lead to smaller payouts for fire victims.
It was also seen as a possible glimpse of the financial toll that could lie ahead as climate change takes hold. Scientists say global warming is leading to fiercer, more destructive wildfires and longer fire seasons.
PG&E cited hundreds of lawsuits from victims of fires in 2017 and 2018 when it announced this month that it planned to file for bankruptcy.
The blazes include the nation’s deadliest wildfire in a century — the one in November that killed at least 86 people and destroyed 15,000 homes in Paradise and surrounding communities. The cause is under investigation, but suspicion fell on PG&E after it reported power line problems nearby around the time the fire broke out.
Last week, however, state investigators determined that the company’s equipment was not to blame for a 2017 fire that killed 22 people in Northern California wine country.
The bankruptcy filing immediately puts a halt to the wildfire lawsuits and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money.
The victims have little chance of getting punitive damages or taking their claims to a jury in a bankruptcy proceeding. Instead, they will have to compete with PG&E’s creditors, including bondholders, for a payout from the company.
Consumer activist Erin Brockovich, who took on PG&E in the 1990s, had urged California lawmakers not to let the utility go into bankruptcy because it could mean less money for wildfire victims.
PG&E faced additional pressure not to move forward with the bankruptcy after investigators said a private electrical system, not utility equipment, caused the 2017 wine country blaze that destroyed more than 5,600 buildings in Sonoma and Napa counties. Gov. Gavin Newsom’s office estimated that more than half of the roughly $30 billion in potential damages that PG&E said it was facing was from that fire.
Legal experts say the bankruptcy will probably take years to resolve and result in higher rates for PG&E customers. The company provides natural gas and electricity to 16 million people in Northern and central California.
A bankruptcy filing would not affect electricity or natural gas service but allow for an “orderly, fair and expeditious resolution” of potential liabilities from the wildfires, the company has said on its website.
PG&E would not speculate on any changes to customers’ bills, noting that the California Public Utilities Commission sets electric and gas rates.
PG&E also filed for bankruptcy in 2001 during an electricity crisis marked by rolling blackouts and the manipulation of the energy market. It emerged from bankruptcy three years later but obtained billions in higher payments from ratepayers.
Opinion: Emphasis on Solar and Wind Stresses Electricity Systems
By Mark J. Perry
America’s electricity system is quickly losing one of its major strengths — “dispatchable fuel diversity” — due to the rapid growth of problematic solar and wind power and an overdependence on just one fuel source in some states, a trend with dire implications for electricity reliability and consumer costs.
Dispatchable fuel diversity, meaning a balanced mix of those energy sources that can power up instantly, is essential to a reliable and resilient power grid. But that diversity is seriously at risk. Coal and nuclear power are being pushed to the margins thanks to heavy-handed subsidies for renewable energy. The grid is trading reliable, dispatchable sources of energy for intermittent alternatives and the as-of-yet unfulfilled promise of energy storage.
Stresses are building below the surface of the U.S. electricity system and, if current trends continue, large parts of the country could face power shortages and higher electricity costs. Some parts of the country have already had warnings of serious trouble ahead.
Tight power-supply conditions in Texas will be even tighter with news that another baseload power plant is to be mothballed. Five coal plants in Texas were taken off the grid last year, and the loss of the 470-megawatt Gibbons Creek plant north of Houston is set to push next summer’s reserve margin down to 7.4 percent, well below the minimum required to maintain reliability.
And PJM, the nation’s largest regional grid that serves 65 million customers in 13 states from Pennsylvania to Illinois and Michigan, is facing some of the same reliability problems from the shutdown of dozens of coal plants and several nuclear plants.
Because electricity is essential to our economy, the consequences of power shortages, resulting in blackouts and brownouts, could be severe. Everything that’s central to a modern economy, from thousands of huge, internet data centers, to automobile assembly plants to hospitals and factories, is powered by kilowatt-hours.
What’s important to recognize is that the permanent shutdown of coal and nuclear plants in the years ahead — and the loss of electricity reliability — is poised to push a perilous situation into a full-blown crisis. Much of the nation’s remaining coal fleet and more than one-third of the nation’s nuclear plants are at risk of being shuttered in the next 15 years or sooner. Once these plants are retired, there’s no bringing them back.
According to the Energy Information Administration, solar and wind power this year will account for nearly two-thirds of the new additions to the U.S. electricity system, surpassing additions from natural gas. Can we realistically expect new electricity generation consisting mostly of episodic solar and wind to fill that void? Could the entire American economy run on renewable energy alone? The answer is clearly no.
If you’re confused about why efficient coal and nuclear plants are closing when we clearly need them, the answer is, in large part, electricity market manipulation.
Solar and wind power are heavily subsidized, beneficiaries of disproportionate levels of government aid. At the federal level, they receive a production tax credit, costing taxpayers more than $5 billion a year. Further, solar and wind benefit from state and local aid as well as mandates requiring the use of renewables that have been adopted by more than half the states.
In 2016, according to the Congressional Research Service, renewable sources of power received $11.4 billion in subsidies, 63 percent of total tax-related support for energy sources that accounted for just 12 percent of U.S. energy production. And this is only part of the subsidies for solar and wind. Others are hidden.
What are the full costs? Both are highly volatile sources of energy. The sun doesn’t always shine and the wind doesn’t always blow, and therefore more reliable sources of conventional energy are always required to be on standby. And the existing grid has to accommodate the erratic and intermittent flow of electricity by modulating the output of conventional power plants higher and lower to match electricity demand, reducing the efficiency and economic competitiveness of those plants.
Moreover, there is the multibillion-dollar cost of constructing transmission lines to carry solar and wind energy from where the power is produced to where it’s used. While it doesn’t show up in the wholesale cost of wind and solar power, these sources of energy are requiring rebuilding the electricity grid from the ground up, with costs passed along to consumers. And then there’s energy storage, or actually the lack of it. Energy expert Mark Mills reported that the combined total of all grid-scale battery storage installed today can hold only 10 seconds of national electricity demand.
We could be headed toward an energy crisis of our own making. Electricity markets cannot ensure a balanced electricity mix that provides affordable and reliable power if they are being undone by outside manipulation. We are undervaluing the diversity of our dispatchable sources of power while throwing billions of dollars per year at energy sources that are stressing the grid. Our energy policy is in desperate need of a course correction — a course correction that can’t come soon enough.
ABOUT THE WRITER
Mark J. Perry is a scholar at the American Enterprise Institute and a professor of economics at the Flint campus of the University of Michigan. He wrote this for InsideSources.com.
British Jews apply for German nationality as Brexit looms
By KIRSTEN GRIESHABER
Tuesday, January 29
BERLIN (AP) — Simon Wallfisch grew up in London as the grandson of an Auschwitz survivor, who had sworn to never return to the country that murdered her parents and 6 million other Jews.
But more than 70 years after the Holocaust, Brexit has prompted Wallfisch and thousands of other Jews in Britain to apply for German citizenship, which was stripped from their ancestors by the Nazis during the Third Reich.
“This disaster that we call Brexit has led to me just finding a way to secure my future and my children’s future,” said Wallfisch, 36, a well-known classical singer and cellist who received his German passport in October. “In order to remain European I’ve taken the European citizenship.”
Britons holding dual citizenship from an EU country like Germany will retain the privilege of free movement and work across the soon-to-be 27-nation bloc.
Many Britons whose ancestors came from other parts of Europe have been claiming citizenship in other EU member states so they can keep ties to the continent. But for Jews whose families fled Germany to escape the Nazis, the decision has meant re-examining long-held beliefs about the country.
The German Embassy in London says it has received more than 3,380 citizenship applications since the Brexit referendum in June 2016 under article 116 of the German Constitution, which allows the descendants of people persecuted by the Nazis to regain the citizenship that was removed between 1933 and 1945.
In comparison, only around 20 such requests were made annually in the years before Brexit.
Wallfisch’s grandmother, Anita Lasker-Wallfisch, was 18 in December 1943 when she was deported to Auschwitz, the Nazi death camp in occupied Poland where more than 1 million Jews were murdered.
She survived because she was a member of the camp’s girls’ orchestra. As a cellist, she had to play classical music while other Jews were taken to the gas chambers.
In November 1944, she was taken to Bergen-Belsen — the concentration camp where diarist Anne Frank died after also being transferred from Auschwitz at about the same time — where she was eventually liberated by the British army in April 1945.
Lasker-Wallfisch immigrated to Britain in 1946, got married and had two children. Her career as a famous cello player took her around the world, but it took decades until she overcame her hatred enough to set foot on German soil again in the 1990s.
In recent years, Lasker-Wallfisch, 93, has become a regular visitor, educating children in Germany about the Holocaust and speaking last year during the German parliament’s annual Holocaust memorial event.
On Sunday’s International Holocaust Remembrance Day, Lasker-Wallfisch, her grandson Simon and her daughter Maya Jacobs Lasker-Wallfisch performed for the first time together on stage at the Jewish Museum Berlin in commemoration of their family. They played music with other members of their extended family and read letters from the past as a tribute to those who survived and those who perished in the Shoah.
Before the show, the three generations sat together on the red couch in the museum’s dressing room and told The Associated Press about the emotional thoughts that went into the younger two’s decision to take German citizenship.
“We cannot be victims of our past. We have to have some hope for change,” said Maya Jacobs Lasker-Wallfisch, a 60-year-old London psychotherapist who is Simon’s aunt and is still waiting on her German citizenship to be approved. “I feel somehow in a strange way triumphant. Something is coming full circle.”
More than just retaining the ability to travel easily from country to country or maintain business ties, Jacobs Lasker-Wallfisch said there are other, more emotional reasons to acquiring German citizenship, with Britain due to leave the European Union on March 29.
“I feel an aliveness here (in Berlin) that I have not experienced before, but it totally makes sense because after all I am German,” Jacobs Lasker-Wallfisch said. She added that if the country behind the Holocaust is now one that welcomes the descendants of the victims, “that’s a good thing.”
But Anita Lasker-Wallfisch, who lived through the horrors of the Holocaust, remained skeptical and pessimistic.
“Jewish people never feel secure,” she said to her daughter and grandson, reminding them of her own past. “I had German nationality — it did not buy me security.”
Opinion: New Cyber Security Law Is a Step in the Right Direction
By Donald A. Purdy Jr.
Reason may have begun to find its way back into America’s heated national conversation about cyber security. In late December, President Trump signed into law The Federal Acquisition Supply Chain Security Act of 2018. This bipartisan legislation marks a welcome departure from the ineffective practice of blocking specific companies on the basis of unsubstantiated assertions that they are national security threats. Instead, it adopts the far more sensible approach of creating a process for managing risks to the networks that serve federal government agencies or support critical U.S. infrastructure.
Banning individual companies has never been a good way to guard against cyber threats. It is far more effective to establish a comprehensive framework for identifying and addressing risks from all technology vendors. Malicious actors (including motivated and well-resourced nation states) can exploit vulnerabilities in global supply chains by virtual means, surreptitiously implanting malware and hidden functionality in digital networks and launching attacks, or disrupting service, however and whenever they choose.
They do not need physical access to network equipment to accomplish these goals; vulnerabilities in the global supply chain and in operational networks give them all the openings they need. Any technology vendor can be compromised, from any geographic location.
For that reason, it is necessary to implement regular, comprehensive testing for higher-risk systems such as those that perform key functions in critical parts of the finance, telecommunications or energy sectors and are therefore essential to national security or deliver essential government services. Critical components and software in these and other high-risk systems should be checked extensively before being deployed. Such an approach would greatly reduce the risk of a nationally significant cyber breach or attack.
This sort of testing is already taking place in other parts of the world. In December, Germany encouraged telecom equipment vendors to set up independent verification labs where third-party experts can test hardware and software for vulnerabilities. Last November, Huawei opened such a testing facility in Bonn. It will open another in Brussels early this year.
In the United Kingdom, where the government has overseen a Huawei testing center for the last eight years, Huawei is working to address concerns about its software development process. These concerns were outlined in a report issued last July by the U.K. government-chaired Oversight Board that monitors the center’s operations. In response, Huawei’s rotating chairman, Ken Hu, recently announced a five-year, $2 billion overhaul of Huawei’s software development processes aimed at making sure — transparently and publicly — that no software is compromised.
Even in the United States, there is a growing realization that a piecemeal, case-by-case approach to cyber security based on blocking “bad” companies must eventually be replaced by an assurance framework that manages risk from all vendors. The Federal Acquisition Supply Chain Security Act adopts this improved approach.
The act creates a Federal Acquisition Council charged with addressing security threats to America’s digital supply chain in the government IT acquisition process. Consisting of seven federal agencies, the council will use criteria created by the National Institute of Standards and Technology to decide which specific products should be excluded from procurement by U.S. government agencies because of supply chain risk.
Consistent with U.S. traditions of due process, companies whose products are targeted by a federal ban will be given reasons for the proposed action, plus a chance to show that the ban is not warranted. Government agencies will need to explain why more limited measures were not sufficient to mitigate the risk. Targeted companies will also have a limited right to judicial review in the U.S. Court of Appeals for the D.C. Circuit.
Passage of the act shows that Congress and the president recognize the importance of addressing digital supply chain risk in a transparent and comprehensive manner. One hopes that this signals a policy shift away from the ineffective “cyber security by logo” approach that labels some companies “good” and others “bad.”
If the United States is not up to the task of establishing a product assurance framework for all vendors supplying critical, high-risk systems, Huawei is open to discussing with customers and the U.S. government the possibility of setting up an evaluation center for the company’s products in the United States. This could serve as a proof of concept for governments elsewhere in the world. It would also mark an important step toward making America’s digital networks more secure.
ABOUT THE WRITER
Donald A. Purdy Jr. is the chief security officer at Huawei Technologies in the United States. He wrote this for InsideSources.com.
Shooting that hurt 5 officers started with warrant attempt
By JUAN A. LOZANO
Tuesday, January 29
HOUSTON (AP) — It started as an attempt to serve a search warrant at a suspected drug house and quickly turned into a gun battle that killed two suspects and injured five officers, including four who were shot, Houston’s police chief said.
The suspects were killed Monday after firing at narcotics officers who were trying to enter a home on the city’s southeast side where authorities allege black tar heroin was being sold, Chief Art Acevedo said. Four of the officers were shot and a fifth suffered a knee injury.
Acevedo said two of the officers who were shot were hit in the neck by gunfire and were in critical but stable condition at a Houston hospital.
“We’re hopeful that they will recover,” Acevedo said.
Two other officers, including the one who injured a knee, were in good condition at the hospital Monday night. Another officer who was shot was released after being treated for a shoulder wound.
Acevedo didn’t immediately have additional information about the suspects. The names of the injured officers were not immediately released.
The chief said a group of about a dozen officers with the Houston Police Department’s narcotics unit were attempting to serve the warrant when they forced open the home’s front door and immediately faced gunfire from one or two individuals. He said officers had gotten a tip from a neighbor that the heroin was being sold there.
“Once the officers breached the door and the gunfire began from the suspects, one of the suspects actually retreated momentarily to the back of the room and then that suspect came back and again engaged the officers in gunfire,” Acevedo said.
It was not immediately known how many officers returned fire but the two suspects were later found dead after SWAT officers used two robots to go into the home and determine that it was safe to enter after the gunfire stopped.
“This has been a tough day for our city,” said Houston Mayor Sylvester Turner. “Pray for (the injured officers) and pray for their families.”
Texas Gov. Greg Abbott said in a statement that the shooting was a “solemn reminder” of the service and sacrifices made by officers.
Follow Juan A. Lozano on Twitter: https://twitter.com/juanlozano70