The difference is: When an investor-owned utility spends money to build things that make the energy grid safer, they also make a profit. The higher the value of human life, the more the utility can justify spending and the more they will want to spend, causing ratepayer bills to go up \u2013 the thinking goes.\u00a0<\/p>\n
Californians already face some of the highest energy prices in the country and millions are struggling to pay their bills. There\u2019s a lot of pressure on the state to do something about the mounting energy affordability crisis and lawmakers recently proposed sweeping changes like replacing private grid investments with cheaper public financing, according to reporting by Canary Media.<\/a>\u00a0<\/p>\n The California Public Utilities Commission recently ordered both PG&E and SDG&E to cut the number of miles of electrical wire the company wanted to bury underground \u2013 a move that eliminates almost all the risk their equipment starts a fire but is also the most expensive thing the company does in the name of safety.\u00a0\u00a0<\/p>\n When state regulators discovered the value of a statistical life SDG&E and PG&E\u2019s plans produced, they ordered them to pick a lower, more reasonable one.\u00a0<\/p>\n \u201cAn overestimated (value of a statistical life) could be used as a means to justify investments in more expensive, capital-intensive risk mitigations, making them appear more cost efficient,\u201d wrote Terrie Prosper, a spokesperson for the California Public Utilities Commission or CPUC, in an email.\u00a0<\/p>\n Translation: A high value makes it look like building more expensive projects to avoid wildfires is cheaper than it actually is.\u00a0\u00a0<\/p>\n What the Hell Is VSL?<\/strong>\u00a0<\/p>\n \u201cWe make all kinds of regulations to make people a little bit safer, like installing safety features on cars or regulating how much pollution power plants can emit,\u201d says Judson Boomhower, who teaches economics at the University of California-San Diego. \u201cThe tradeoff there is, it\u2019s expensive to do that.\u201d\u00a0<\/p>\n Enter the value of a statistical life. Think of it this way: We can\u2019t expect limitless spending to keep ourselves safe. We are, in fact, the people paying the taxes or, in this case, the energy bills that then fund the burial of powerlines.\u00a0<\/p>\n \u201cThere\u2019s a normal human reaction to this. It\u2019s like, what? You\u2019re going to put a dollar value on human life? That\u2019s crazy. And I get it,\u201d Boomhower said. \u201cBut as a human who thinks about public policy, the alternative is we don\u2019t accept any risk of death ever and then you never leave your house and we all drive tanks.\u201d\u00a0<\/p>\n And, we all go broke.\u00a0\u00a0<\/p>\n The utility companies\u2019 huge value on life is another way of saying these companies are willing to spend a ton to keep Californians safe. In other words, they\u2019re willing to let you, the customer, spend a ton to keep yourself safe.\u00a0<\/p>\n \u201cIt\u2019s called goldplating,\u201d said Tom Long, now retired, who worked for the Utility Reform Network called TURN. \u201cUtilities skew spending proposals toward capital (building) projects because they make a profit on top.\u201d\u00a0<\/p>\n TURN pointed out the high price SDG&E ascribes to preserving one human life in something called a \u201cprotest\u201d filed against the company at the CPUC in 2021. Later CPUC staff noted PG&E had a similar dollar value.\u00a0\u00a0<\/p>\n SDG&E and PG&E didn\u2019t come right out and say their value of a statistical life was $100 million, like the DOT or EPA publish publicly. Staff and watchdogs said it was buried in the math behind how the utilities justified their spending to reduce wildfire risk in something called the Risk Assessment Mitigation Phase Application.\u00a0\u00a0<\/p>\n In it, utilities are allowed to come up with their own formula that ascribes value to different things they do for customers, like providing safety and reliability. SDG&E had inflated the way they valued safety which spit out this high statistical life number, watchdog groups said.\u00a0<\/p>\n SDG&E\u2019s math described a catastrophic or worst-case wildfire<\/a> as one that killed 20 people, Long argued in TURN\u2019s protest. The CPUC and watchdogs said what\u2019s considered catastrophic in terms of wildfire would be one that kills 200 people. Make that change and the company\u2019s value of a statistical life would drop by a factor of 10, TURN wrote.\u00a0<\/p>\n In December of 2022, the CPUC agreed and said<\/a>, OK everybody get on the same page here. The commission ordered the investor-owned utilities to use whatever the Department of Transportation\u2019s statistical life value is. \u00a0<\/p>\n Most of the utilities said, fine. Southern California Edison was the only company opposed to the idea saying \u201cplacing a specific value on life brings up ethical issues.\u201d The CPUC disagreed, saying utilities were doing it anyway just not explicitly. Better everybody use the same number and publish it publicly.\u00a0<\/p>\n \u201cIts use here benefits risk assessment processes by promoting transparency and consistency across utilities,\u201d the CPUC wrote.\u00a0<\/p>\n In response to questions from Voice of San Diego, SDG&E spokesman Anthony Wagner sent a statement: <\/p>\n \u201cSDG&E builds infrastructure based on need, guided by data science, advance modeling, and a deep commitment to protecting our communities from extreme threats like wildfires,\u201d Wagner wrote. \u201cThe safety of the communities we serve is our top priority. We don\u2019t view safety through a financial lens. We view it as a responsibility. Our planning is rooted in evidence, not assumptions, and our goal is always to safeguard lives and strengthen resilience.\u201d <\/p>\n PG&E didn\u2019t return request for comment for this article.\u00a0<\/p>\n A Means to An Undergrounding<\/strong>\u00a0<\/p>\n \u201cWhat\u2019s at stake here is the balance between safety and affordability,\u201d said Joseph Mitchell, an expert on wildfires caused by utility infrastructure, who works for the San Diego-based utility watchdog group Mussey Grade Road Alliance.\u00a0\u00a0<\/p>\n Mitchell along with Long from TURN believe it\u2019s profit that\u2019s motivating these utilities to inflate things like the value of a human life. And there\u2019s nothing more profitable to California\u2019s investor-owned utilities than burying the state\u2019s electrical grid underground to prevent their assets from sparking a wildfire.\u00a0\u00a0<\/p>\n \u201cThe utilities for the last few years have been very eager to increase their undergrounding programs because it checks all the boxes: It prevents wildfire, liability, commission finger pointing and they get paid for it,\u201d Mitchell said.\u00a0<\/p>\n Sempra, the company that owns SDG&E, asked the CPUC in 2024 for the OK to spend $1.9 billion to underground 605 miles of electric wire over four years<\/a>. It\u2019s the most expensive thing utilities can do to prevent wildfire \u2013 and it\u2019s the most effective. But it costs just over $3.1 million per mile to do.\u00a0\u00a0<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/08\/Ocean-Beach_0053-1024x683.jpg\")
A group watches a skateboarder in an alley in Ocean Beach on June 18, 2025. \/ Ariana Drehsler for Voice of San Diego<\/p>\n![\"North](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/08\/0018-1024x683.jpg\")
A shadow of power lines along the alley behind North Park Towers \/ Photo by Ariana Drehsler for Voice of San Diego<\/p>\n