EON EMF Digest 9-11-2010: A look at PG&E

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Some PG&E Background – A Rap Sheet

PG&E, Owner of Pipeline, Also Runs Major Political Operation
Energy giant PG&E, which owns and manages a natural gas pipeline that Thursday night ignited a massive inferno in San Bruno, Calif., is one of the nation’s most notable political players, routinely spending millions of dollars each year on government lobbying and campaign donations, a Center for Responsive Politics analysis finds.…

Cartoon by Brian Narelle

…Since 2000, PG&E Corp., the parent company of PG&E Co., has spent more than $112 million on federally reportable lobbying efforts, according to the Center’s analysis. Its roster of lobbyists includes an elite force of ex-government officials, and at least one of the lobbyists the company has deployed this year is a former member of Congress, Rep. Vic Fazio (D-Ca.).
And the explosion in San Bruno comes at a time when PG&E Corp. is reaching new heights in lobbying efforts.
During the first six months of the year, PG&E put unprecedented capital into lobbying efforts, reporting to the federal government that it’s so far spent nearly$44 million. Such a figure represents a more than 600 percent increase from the total it spent during all of 2009, and marks an industry-wide record for electric and utilities companies.
Much of the lobbying money it’s spent this year has gone toward efforts to influence a California budget proposal that would make it difficult for counties in the state to start their own electric utility companies.

PG&E – A review of a shameful history
PG&E isn’t your average utility company. Up until the mid 1990’s it had been the largest privately owned electric utility company in the U.S. with over 4 million customers, covering 2/3rds of California. The company has played a major role in shaping California and its political climate during the 20th century.

One hundred years ago, at the dawn of the electrical revolution, the Southern Pacific Railroad company’s big four, Charles Crocker, Mark Hopkins, Leland Stanford and Colis Huntington had a complete monopoly on the politics and economy of California. They owned the banks, judges, politicians and transportation system of the state. They also held deeds to 1/5 of its arable land.
The Southern Pacific Crowd joined forces with J.P. Morgan and European financiers who were using vast amounts of royalist money to build up and take financial control of America’s corporations. This unholy alliance of royalist influence over command and control of corporate structure was also behind the creation of PG&E and its primary roll model, the english controlled General Electric company, which is the largest company in the world today.
This gigantic company hitched its values and vision to the monopolistic agenda…

How PG&E hid $4 billion – diagramming the corporation’s global ‘evil empire’
Investigative reporter Don Ray
PG&E: The evil empire
While San Francisco’s electricity infrastructure crumbles from a lack of investment, PG&E has sucked your money out of town and used it to build and expand a global empire
Pacific Gas and Electric Corp. – Holding company formed in 1997 in part to protect Pacific Gas and Electric Co. money from possible problems during deregulation
California
Pacific Gas and Electric Co. – Local utility, which sends ratepayer money to PG&E Corp. – but gets none back [ the list goes on…]

If the attorneys from the city of San Francisco and the state attorney general’s office are correct, some of the money a San Francisco customer paid for an electric bill might have taken a path such as this:
PG&E Co., which sells electric power to most of northern California, cashes the check. Some of the money then goes to its parent company, PG&E Corp.
Some or all of that money could then go to PG&E National Energy Group LLC, a Delaware limited liability company based in Bethesda, Md., which was formed for the purpose of holding stock in another Bethesda-based Delaware corporation called PG&E National Energy Group Inc.
Then PG&E National Energy Group Inc. might receive the money from it’s parent limited liability corporation. Next, the cash might trickle down to PG&E Enterprises, a California corporation based in Bethesda.
Then it could drip down another level to PG&E National Energy Group Holdings Corp., a California corporation based in Bethesda that is a holding company for PG&E National Energy Group generation and energy trading subsidiaries.
It could easily pass from there to PG&E Energy Trading Holdings LLC, a Delaware limited liability company also based in Bethesda. It was formed for the purpose of holding stock in PG&E Trading Holdings Corp.
As you might guess, the next stream leads to PG&E Energy Trading Holdings Corp., a California corporation based in Bethesda. It’s a holding company for energy trading and overseas entities.
Next stop: PG&E International Inc., a California corporation based in Bethesda that is a holding company for overseas project companies.
Now the money could flow down the East Coast to PG&E Overseas Holdings I Ltd., a Cayman Islands company. It is the owner of PG&E Overseas Holdings II Ltd, based in Labuan, Malaysia. The company is the owner of PG&E Corp. Australian Holdings Ltd., who could be the next recipient.
Australian holdings is based in Brisbane and is the holding company for Australian entities.
It might pass some of that electric bill money to PG&E Energy Trading Australia Ltd., an Australian corporation based in Brisbane that markets energy.
If the theory holds up, San Franciscans – who face blackouts due to inadequate investment in PG&E’s local system – may very well have been paying to keep the lights on in Queensland, down under.

Who Trusts the CPUC?

CPUC can’t be trusted to investigate PG&E explosion in San Bruno
By Dennis Wyatt – Managing Editor – Manteca Bulletin
The California Public Utilities Commission should not investigate PG&E for the killing of four people, maiming countless others and destroying 37 homes in San Bruno.
They can’t be trusted.…
The CPUC also routinely approves massive rate increases for PG&E that are often based on the San Francisco-based utility’s claim they will use the money to do routine maintenance and then siphon the funds collected from ratepayers for other purposes. One recent rate increase application the CPUC approved included money to replace 40,000 aging power poles. An audit done several years later showed that PG&E only replaced 4,000 poles. How it came up was PG&E had the gal to ask for another rate increase to replace the poles that weren’t replaced with the first rate increase.
Is there a pattern here?

‘SmartGrid’ Security Threatened by Hackable Wireless

Security Pros Question Deployment of Smart Meters
[from March, 2010, but still relevant – Eds]
The country’s swift deployment of smart-grid technology has security professionals concerned that utilities and smart-meter vendors are repeating the mistakes made in the rollout of the public internet, when security became a priority only after malicious attacks had reached mass levels.
But when it comes to the power grid, the costs of remote hack attacks are potentially more dramatic…
Smart grids use digital meters and control mechanisms that allow utility companies to better control the flow of electricity remotely and promise to save energy and reduce utility costs. Smart meters installed in homes and businesses allow utility companies to remotely communicate with the devices to read usage levels and control the delivery of services.
But security research on the systems is lagging behind the deployment of smart meters, which has already occurred in some places in the United States. PG&E is in the lead with 5 million gas and electric smart meters deployed since 2006, which represents about half of its customer base. PG&E expects to deploy an additional 5 million smart meters by 2012.
Among the concerns Carpenter expressed was one related to vulnerabilities that could arise in the encryption schemes used in smart-grid systems, given that the systems are expected to have a lifespan of 15 to 20 years. Advances in encryption cracking that are likely to occur over that time period would make the encryption obsolete, he said.
He also discussed a need to examine the aggregation points that receive communication from the meters and have “an immense amount of control” in some cases.
“In some circumstances they’re simply going to give you a denial-of-service if you tamper with them because the crypto is done appropriately from the head-end control system down to the meters and the aggregation point really can’t tinker much with it,” Carpenter said. “But in other [cases] there’s a great deal of control that that aggregation point has, and they’re sitting on the top of a [utility] pole — not in a brick building [with] guard dogs and razor wire … and [they have] an ethernet cable.”
An attacker could sniff traffic going to the aggregation point or possibly send commands to the meters or inject code into the backend control system.

Feds’ Smart Grid Race Leaves Cybersecurity in the Dust
[from March, 2010, but still relevant – Eds]
Amid the government-funded rush to upgrade America’s aging electric system to a smart grid comes a strange confluence of press releases this week by the White House and the University of Illinois.
Tuesday morning, President Obama, speaking at Florida Power and Light (FPL) facilities, announced $3.4 billion in grants to utility companies, municipal districts and manufacturers to spur a nationwide transition to smart-grid technologies and fund other energy-saving initiatives as part of the economic stimulus package.

Strange, then, that another press release distributed Monday by the Information Trust Institute at the University of Illinois announces a grant of $18.8 million to four academic institutions to fund a five-year research project into securing the power grid. The project is supposed to make certain that the smart meters and other devices implemented by power companies can resist hackers and other attackers.

“It reflects a strong consensus that cybersecurity and resilience will be critical to the realization of a modernized, reliable, and efficient power grid, so that it will be able to guarantee delivery of electricity to consumers and maintain critical operations, even when malicious cyber attacks occur,” reads the press release.
The only problem is, by the time the research project is completed, most of the nation will have already adopted untested and unsecured technologies. [emphasis added – Ed.]

Some History

White House Announces ‘SmartGrid’ Grants
Oct. 2009 [There is NO federal ‘mandate’ for wireless ‘smartmeters,’ and PG&E even failed to qualify for the grant!]
ARCADIA, FLORIDA – Speaking at Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, President Barack Obama today announced the largest single energy grid modernization investment in U.S. history, funding a broad range of technologies that will spur the nation’s transition to a smarter, stronger, more efficient and reliable electric system. The end result will promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar.

The $3.4 billion in Smart Grid Investment Grant awards are part of the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion. Applicants state that the projects will create tens of thousands of jobs, and consumers in 49 states will benefit from these investments in a stronger, more reliable grid. Full listings of the grant awards by category and state are available HERE and HERE. A map of the awards is available HERE.

SmartGrid Security Research Launched
[Will not be completed until AFTER deployment – Ed.]
The term “Smart Grid” refers to the integration of the existing physical infrastructure of the power grid with an advanced communication and control cyber infrastructure, with the ultimate goal of making energy transmission and distribution more efficient— and therefore cheaper for consumers and less wasteful of resources.
However, Smart Grid technologies may themselves introduce new problems, such as increasing the vulnerability to cyber attack as power grid resources become increasingly linked to the Internet. For example, experts recently warned that some types of “smart” automated meters could be hacked by attackers with minimal equipment and knowledge, and that an attacker who succeeded in gaining access might be able to cause blackouts. Those blackouts could have serious economic and human consequences if they are widespread or affect critical systems, such as airports or city traffic light systems.
“Ultimately, the extent to which the Smart Grid vision is achieved is going to depend on how functional and robust the cyber infrastructure is,” explained Ilesanmi Adesida, dean of the College of Engineering at Illinois.