[jeffkrol]

State regulators will take their first look today at a proposal backed by Pacific Gas and Electric Co. that would require customers to pay all costs of catastrophic fires, such as last week's gas-line explosion in San Bruno, that exceed a utility's insurance coverage.....................Under current rules, utilities in California can seek a rate increase if the costs of a disaster exceed their insurance coverage. But the PUC can veto the request and force utility shareholders to pay the bill.
More than wildfires

The new proposal would require utility customers to bear the uninsured costs of catastrophic fires. It is titled a "wildfire expense balancing account," but the application defines "wildfire" to include any uncontrolled fire, urban or rural, that is larger than an acre and destroys houses or other buildings.

San Bruno blast: PG&E backs bid to bill public
Of course regardless... the customer will pay anyways, one way or another........

[Nesster]

...except when it's the small stockholder who pays together with the customer...

[jeffkrol]

Stock prices are short term.... rate hikes last forever........

[MRRiley]

...except when it's the small stockholder who pays together with the customer...

But even the small stockholder benefits from the company's profits and successes. They should also be vulnerable to it's failures. Customers should not be held responsible for a company's accidents, failures or irresponsibility unless they are party to or cause of the failure.

[GeneV]

...except when it's the small stockholder who pays together with the customer...

It's really just the customers, isn't it?

[Nesster]

nah, I'm thinking the big money bump and dump, and the big bondholders crowding out anyone else. All too often it's the little investors that get the dump and the crowd-out in these things.

[GeneV]

nah, I'm thinking the big money bump and dump, and the big bondholders crowding out anyone else. All too often it's the little investors that get the dump and the crowd-out in these things.

In a public utility with captive customers, much of the usual economics gets distorted, though.

I remember in the early 90s being involved in "take or pay" cases representing owners of oil and gas properties. Gas utilities had entered into contracts to secure wells which promised that the company would pay the well owners some level of royalties even if they did not buy the gas. The gas market went way down as a result of the economic downturn. FERC would not allow these costs to be passed on to the customers. Gas companies spent millions defending these simple contract cases to avoid taking a hit for their shareholders and bondholders. At the end of the Bush I administration, FERC changed its ruling and let them pass on the costs to the ratepayers if they settled these cases. The gas companies were suddenly writing my clients checks for whatever they asked. The ratepayers took it in the shorts.