6 things to know about the PG&E bankruptcy filing and how it affects you
A federal judge, calling PG&E’s management “dismal,” said late Tuesday he might order the utility to halt shareholder dividends and spend the money instead on wildfire prevention.
U.S. District Judge William Alsup, who has been harshly critical of PG&E’s record on wildfires, said in a written tentative ruling that he might cut off all dividends “to ensure that sufficient financial resources are available” for trimming and removing hazardous trees throughout PG&E’s vast territory. PG&E Corp. and its main subsidiary, Pacific Gas and Electric Co., filed for Chapter 11 bankruptcy in late January.
PG&E already halted shareholder dividends in the weeks following the October 2017 wildfires in the wine country and Sacramento Valley. Until then, it was paying out nearly $1 billion a year to its shareholders.
The proposed order comes as PG&E’s legal and financial woes continue to mount. Last month, the company told shareholders that it “believes it is probably that its equipment will be determined to be an ignition point of the 2018 Camp Fire. The November disaster killed 85 people and destroyed much of the town of Paradise.
Alsup is overseeing PG&E’s probation status after the utility was convicted on criminal charges in the 2010 San Bruno natural gas pipeline explosion, and has determined that its record on fire safety represents a violation of its probation terms. He has been contemplating ordering PG&E to impose massive blackouts during windy periods and a more aggressive tree-trimming program. In his proposed order Tuesday, he said he might soften his plan and require PG&E merely to comply with the wildfire safety plan the utility recently submitted to the Public Utilities Commission. That plan isn’t as stringent as Alsop’s earlier proposal.
Nonetheless, he again lashed out at the utility Tuesday.
“The record demonstrates that PG&E’s performance with respect to vegetation management has been dismal,” he wrote. “And, not only does the offender provide no evidentiary support for its claim, but anyone who knows the terrain and its vegetation knows that it takes years for trees to grow to the height of PG&E’s lines. Regular inspections could easily spot trees that are high enough to present a hazard.”
In a statement Wednesday, PG&E said it is “committed to completing the work” outlined in the safety plan filed with the PUC. It added it will respond to Alsop proposed ban on dividends by March 22, the judge’s deadline.
The utility has said its wildfire liabilities could total $30 billion.