6 things to know about the PG&E bankruptcy filing and how it affects you
A federal judge ruled Wednesday that PG&E had violated the terms of its criminal probation over wildfire safety, but for the time being stopped short of ordering massive changes in how the embattled utility manages fire risk.
One day after PG&E filed for bankruptcy because of mounting wildfire liability claims, U.S. District Judge William Alsup repeatedly lashed out at PG&E’s lawyers, questioning their commitment to fire safety. But he said he would wait until PG&E, as required by a new state law, releases a detailed fire safety plan next week.
“Safety is not your No. 1 thing,” he scolded the utility’s lawyers.
Interim Chief Executive Officer John Simon attended the three-hour hearing but didn’t speak. He declined comment to a Sacramento Bee reporter afterward.
“PG&E shares the court’s commitment to safety and agrees with the urgency that we all have to work together to reduce the risk of wildfire throughout Northern and Central California,” the company said in an emailed statement. “We look forward to working with the court and probation on how we might enhance our communications efforts. We understand that PG&E must play a leading role in implementing change that will help further mitigate wildfire risk and have taken a number of important and meaningful actions to do so.”
Alsup had proposed a stringent fire safety plan for 2019 — including inspection of all 100,000 miles of the utility’s power lines, blackouts if weather conditions seem dangerous, and a big increase in PG&E’s tree trimming program. PG&E blasted the plan in court papers as unrealistic and said it would cost at least $75 billion to implement.
PG&E’s bankruptcy has raised serious questions about the utility’s ability to pay its estimated $30 billion in wildfire liabilities. The company says bankruptcy is the fairest and quickest method for sorting out those claims. Cal Fire has blamed PG&E for more than a dozen major 2017 wildfires and is investigating whether problems on a high-voltage transmission line caused November’s Camp Fire. The Camp Fire killed 86 people and destroyed 13,000 homes in and around the town of Paradise.
During the hearing, the judge ruled that PG&E violated the terms of its probation in the San Bruno pipeline explosion case by not adequately notifying the probation department that it was investigated for possible criminal charges in connection with the 2017 Honey Fire in Butte County. No charges were filed in that incident and PG&E made a civil settlement. Alsup didn’t rule, however, what penalties PG&E will face for violating probation.
PG&E attorney Kevin Orsini argued that PG&E is working “night and day” to improve wildfire safety but is hampered by a variety of factors, including a shortage of qualified tree trimmers and the complexity of ordering blackouts to a wide area.
Despite PG&E’s bankruptcy filing a day earlier, Orsini said finances aren’t the reason the utility can’t trim as many trees this year as Alsup wanted. Instead, because of labor shortages, he said it would take eight years to do all the work.
Alsup, however, was clearly frustrated by PG&E’s explanations. “I don’t buy that there isn’t enough people,” the judge said, adding that PG&E is moving too slowly and wasted billions paying dividends to shareholders instead of removing trees and improving its system.
In six months, “the fire season will be on us and the emergency will be on us, and will we see another headline, ‘PG&E has done it again, they’ve burned down another town?’ ” Alsup said.
Orsini replied, “We share your concern.” He added, “PG&E understands and accepts that. It has a credibility problem.”
When the judge suggested shutting off power when winds reach 20 mph, Orsini said that would lead to rampant blackouts.
“We’re going to be turning off the lights a lot,” Orsini said. He denied suggestions by Alsup that PG&E is reluctant to cut power because it would hurt profits, and said frequent blackouts would cause other safety problems that can’t be ignored.
PG&E cut power to 60,000 customers in California last October as a preventive measure. It was planning a similar blackout the morning of the Camp Fire, but canceled it.
Frank Pitre, a lawyer for wildfire survivors suing PG&E, said San Diego Gas & Electric has an aggressive blackout program that has greatly reduced wildfire risks in its territory. The judge said SDG&E’s model could work for PG&E.
Alsup also criticized the Public Utilities Commission, which pushed back on the judge potentially ordering huge changes in PG&E’s fire-safety program, for not doing more to protect the public.
“How did it happen that so many fires occurred under your supervision?” Alsup asked PUC lawyer Christine Hammond. She replied that the commission “is galvanized” over the fire issue and is constantly consulting with Cal Fire on preparing for the 2019 fire season.