I saw a headline from Barron’s that read “The L.A. Fires Have Edison Stock Plunging”. I can’t link to it because it’s behind a paywall. But it got me thinking even though I couldn’t read the article. It’s really messed up that utilities have stock prices.
Utilities are necessities in modern society. Traditionally, they are things like electricity, water, gas, and sewer systems. I’m even old enough to remember when phones were considered public utilities. I’ll circle back to that in a minute. Now don’t object and say, “What about septic tanks?” and things like that. I’ll get to that in a minute, too. For now, I’ll just reassert that utilities are necessities in modern society.
If you’re not sure about that assertion, just think about what your life would be like without electricity or water. Without water, you’d only survive a couple of days, so that’s pretty obvious, but what about electricity? Without electricity, you couldn’t keep food edible, you couldn’t heat or cool your house, and you couldn’t stay up past dark.
Once you accept that utilities are necessary, my argument is simple. Utility providers should be focused solely on providing services to the people. If they have investors, stock prices, they are forced to focus on them. That could mean charging more to get a better return on investment. It could mean not making necessary repairs to infrastructure because it will hurt profits. All of this disrupts getting the utility to the people.
One example is the disastrous Halloween snowstorm in Connecticut in 2011. At least part of the reason why the storm was such a disaster is because the electric company had scaled back their tree-trimming to save money. Having the tree branches hanging over power lines led to power outages for tens of thousands of customers. All to save a little money. After the storm, they restarted their tree-trimming with a vengeance, but it was too late.
So, what about candles, fireplaces, ice boxes, septic systems, etc. Yes, they can technically replace the things that we use utilities for. However, modern society isn’t designed for them. Where are you going to get ice for an ice box? Houses aren’t built around a central fireplace anymore. Trust me, everyone you know with a septic system rather than a sewer hookup hates it. They loath it. They detest it. Candles cause a lot of indoor air pollution. All of the utility alternatives have major problems.
What does this all mean? A couple of things. First, we can’t just look at the traditional utilities. Anything that is a necessity for modern life should be a utility. Off the top of my head, I’d say that’s water, electricity, phone service, internet, and sewage. I think we can leave gas off. It’s a major source of indoor air pollution and contributes to climate change. Phone and internet not only keep a person connected, they’ve become the only way for people to get and keep jobs. A kid can’t do schoolwork without them. They are necessary.
Second, we have to make the utilities public (unprivatize?). This means that the government either runs or subsidizes all utilities. Our tax dollars should fully pay for them. This would mean that they work for the people, not the shareholders. Their concern would no longer be the bottom line. Instead, they would be concerned with delivering their product.
Now, even though this little rant started with a headline about the L.A. fires, I want to stress that I have no idea what role, if any, Edison had in the fires. There are rumors, but as far as I know, no definitive cause has been found yet. It was strictly the part about their stock that caught my eye. No utility should have stock. They should be funded by the government. Anything else is pretty messed up.
