A MESSAGE FROM THE POWER IS IN OUR HANDS IBEW WORKERS STATE TAKEOVER 0E IS EXPENSIVE AND DANGEROUS TAKEOVER FACT SHEET I Victims of wildfires would lose access to wildfire insurance while ratepayers have already paid the premiums. I All California taxpayers would be on the hook for billions of dollars in wildfire liabilities if a state?owned utility starts another fire. I Cities and counties would lose hundreds of millions of dollars in taxes and fees currently pays (in 2019, paid $388 million). I Workers would lose bargaining power and existing pension and retirement benefits; thus creating the risk these workers will choose NOT to work for the successor State Utility or the newly formed city POUs. DETAILS 1' Worse, just the mere proposal 1. Bad for Future Wildfire Victims 3. Bad for Workers Victims would lose access to wild?re insurance fund created under AB 1054, even though they have already paid the premiums. 2. Bad for Taxpayers Under inverse condemnation, California taxpayers, not PG8CE, would be obligated to pay all damages from wild?res caused by a state?owned utility. For smaller, newly formed POUS, customers pay the total amount of wild?re damages, or the city goes bankrupt. Today, over 25,000 employees and their families have a secure pension in a private ERISA quali?ed plan, retiree medical coverage and other bene?ts. A state takeover could mean 25,000 California families could lose their hard earned retirement. There is no mechanism in CA law to transfer or convert an ERISA pension fund into a multi?employer, publicly held pension fund, as would be needed when California creates a state?owned utility and smaller POUS. of a state takeover will disrupt the bankruptcy process. A state takeover removes PGBCE from the AB 1054 Wild?re Fund, forcing the utility to reduce /liquidate the existing PGSCE pension funds for operating capital. Once the state?owned utility/ small POUs are established, the only way to replace pension fund is for voters to VOTE to assume additional pension liability to cover these workers. That won?t happen. I workers will lose bargaining power by being in smaller units. I They will lose job mobility that they currently have. I They will lose advancement opportunities and earning power. Bad for Cities I Cities will lose hundreds of millions of dollars in property tax and franchise fees currently paid by I Takeover will be really expensive?cities have to pay fair market value of distribution transmission assets ?not market capitalization, which is a lot less. I Those assets are currently pledged collateral for debtor in possession ?nancing that the Commission approved. I Those assets would be further encumbered by all of the other liabilities, including liabilities to ?re victims in the bankruptcy process. 5. Bad for the California Economy, Energy Reliability and Supply, Clean Energy Goals, etc. I Today PG8CE can mass mobilize a huge workforce in emergencies (eg. a thousand workers to repair infrastructure after an earthquake, wild?re or other disaster.) I A large IOU is necessary to implement policy to ensure reliable energy supplies, increased use of renewable energy, grid hardening and safety infrastructure. I Municipalization is e?ectively another kind of deregulation?the POU would not be regulated by the CPUC, allowing these new POUs to choose not to invest in grid safety, reliability etc. With large debt from acquisition cost, there is a strong incentive NOT to invest in the infrastructure. I State will lose over $600 million in property taxes and sales/used taxes currently paid by 6. Bad for the Customers Serves The mere threat of municipalization will make it harder to exit bankruptcy because investors will be spooked by assets being sliced off, and the cost of equity and debt will therefore be higher, leading to unnecessarily higher rates. The cities that will municipalize will be richer, urban places that have lower ?re risk, leaving the less af?uent rural riskier places as part of which will raise the average cost (costs less to maintain urban system than it does a rural system)?rural residential customers pay the same residential rate as urban customers even though they are much more expensive to serve, and this cost Spreading would be undermined. It will raise overall costs because it will require many duplicate functions which are now centralized (cg. 20 billing departments instead of 1). The IOU and POU will have less purchasing power and therefore higher costs. Bad for the Environment and all utilities are already required to transition to 100% carbon?free electric power by 2045~and the utilities are on track to meet that goal. Spending over $100 billion to take over doesn?t make our environment better?it just makes Californians poorer. Bad for Everyone A smaller utility will not be able to absorb costs from catastrOphic events, or even modest?sized events. PAID FOR BY THE Dian-Ithi-i?riau MEMBERS or inst-v r245 iriEi-iriLisbon-i