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Morning Splash: PG&E Gets New CEO; IPO’s Victim of Credit Rating Downgrade; Lee Takes the Heat

| August 9, 2011
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PG&E Corp. on Monday named as its new CEO Anthony F. Earley Jr., a veteran power-industry executive credited with steering Detroit’s electric utility through the largest blackout in American history. Earley, 62, will replace Peter Darbee, who stepped down in April in an effort to help PG&E and its subsidiary, Pacific Gas and Electric Co., recover from a series of crises, including last year’s fatal pipeline explosion in San Bruno. Earley’s appointment marks the first time that PG&E has picked a new chief executive from outside the company’s ranks.

Standard & Poor’s downgrade of America’s credit rating could sap the unbridled enthusiasm that’s buoyed the technology industry for months, pushing back planned public offerings and pricking lofty investor valuations.

“Timing is everything and it’s a pretty safe bet that it will be awhile before the markets settle down enough that we can start doing (initial public offerings) again,” said Paul Saffo, managing director at investment adviser Discern Analytics in San Francisco.

That’s potentially bad news for companies like Zynga and Groupon, which have filed to go public, as well as businesses waiting in the wings, like Facebook and Yelp.

Newly declared San Francisco mayoral candidate Ed Lee was greeted by a raucous crowd and a barrage of criticism from opponents at a candidate forum in the Castro Monday evening. Many audience members heckled, hissed and booed at Lee, the appointed interim mayor who had initially promised not to run for a full term but formally entered the race on Monday. Others screamed out their own allegiances, and a small fraction urged the crowd at the Castro Theatre to hush.

The percentage of Bay Area homeowners who are underwater — which means their mortgage is higher than the home’s value — edged up from a year ago, as the housing market continues to struggle to get out of its long slump. Some 22.8 percent of single-family houses with mortgages were in negative-equity territory during the second quarter, up from 21.1 percent a year ago, according to a report released Tuesday by Zillow, a real estate information website.

The estimated cost of California’s high-speed rail project is rising by billions of dollars.

Environmental impact studies released Tuesday and obtained in advance by The Associated Press put the cost of building the initial segment at anywhere from $10 billion to $13.9 billion.

That’s sharply higher than the $7.1 billion estimate from 2009 for the Merced-to-Bakersfield section. Rail board executives say the higher costs include more elevated tracks in the Central Valley and more specific data about property values.

Facebook has agreed to work with law enforcement agencies nationwide to remove accounts set up by inmates or posted on their behalf, in part because prisoners are using the social networking site to stalk victims and direct criminal activity, California prison officials said Monday. It’s the latest effort to combat a problem that has grown with the advent of smartphones and social networking sites.

Health care experts Monday warned that the nation’s debt crisis could lead to budget cuts that could cripple the nation’s $11 billion plan to expand primary health care.

Meanwhile, the worst Wall Street sell-off in two years served as an uncomfortable backdrop as Sonoma County’s former public health officer called for continued support of federally subsidized health centers — the backbone of primary care under President Obama’s Affordable Care Act.

Novato’s City Council will decide this week whether to accept dissolution of the city’s Redevelopment Agency — or pay what city officials call millions of dollars in “ransom money” to the state in order to keep the agency alive.

“This deal leaves a bad taste in the mouth of a lot of local officials,” said Assemblyman Jared Huffman, D-San Rafael. “They’re forced to choose between contributing cash to the state in the next fiscal year or losing their redevelopment agencies.”

More than any other small town in Silicon Valley, Los Gatos evokes a specific sense of place. With its quaint downtown, surrounded on all sides by sprawling homes — with equally sprawling property values — Los Gatos has always seemed less a sleepy bedroom community than privileged principality.

But over the past year, the dream has turned into an intermittent nightmare, as Los Gatos also has become a magnet for tragedy.

A North Bay beer baron wants to bankroll an effort to keep Samuel P. Taylor State Park open by signing up volunteers and employing youths to run the operation on a shoestring.

Tony Magee, CEO of Petaluma’s Lagunitas Brewing Co., noting the state park generates revenue of $500,000 a year for campsite rentals that are booked months in advance, says he thinks the park could be operated to break even — but he’s willing to cover the balance if it doesn’t. The park last year cost the state about $750,000 to operate, though it was budgeted at about $1.1 million. Magee thinks costs can be cut further.

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About the Author ()

Rachel Dornhelm got her start in radio at WHYY. After anthropology graduate school, Rachel lived in Uzbekistan working with youth near the drying Aral Sea. Rachel returned to radio full-time in 2001. Her work has appeared on WNYC, WBUR, Marketplace, NPR news magazines and KQED. Reach Rachel Dornhelm at rdornhelm@kqed.org.

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