Capitol Alert

Gavin Newsom blasts PG&E in court filing: ‘Mismanagement, misconduct and failed efforts’

Gov. Gavin Newsom is urging the judge overseeing PG&E’s bankruptcy to reject the company’s request for a six-month extension to present its reorganization plan.

Newsom’s office argues the company should instead have to submit its reorganization plans within 75 days. The utility filed for Chapter 11 bankruptcy in the aftermath of the 2018 Camp Fire, which the utility has said was likely sparked by its equipment.

PG&E’s extension request “reflects no sense of urgency in addressing the serious problems and issues confronting” the company, Newsom’s office writes in a brief it plans to file Wednesday. The Newsom administration also notes that the extension would span the 2019 fire season, when the company should be working to ensure its equipment does not spark new fires.

“All should be mindful of PG&E’s history of over two decades of mismanagement, misconduct and failed efforts to improve a woeful safety culture,” Newsom’s office writes. “We should not forget that PG&E entered these Chapter 11 Cases as a convicted felon, with five different felony convictions for safety violations and one conviction for obstruction of justice.”

The utility argues asking for more time is common in bankruptcy cases and that its plan in part depends on what the Legislature and state regulators might do to change utility regulations over the next few months.

“PG&E is asking for additional time to increase our chances of formulating and negotiating a plan of reorganization that is feasible and agreeable to stakeholders,” PG&E spokesman Andy Castagnola said in a statement. “PG&E remains committed to working together with our stakeholders to fairly and expeditiously resolve our liabilities resulting from the 2017 and 2018 Northern California wildfires, and to delivering safe and reliable service to our customers.”

At an oversight hearing in the state Assembly, PG&E’s new CEO Bill Johnson said he’s committed to making the company accountable to customers and victims. He said ahead of the 2019 fire season the company is visually inspecting tens of thousands of miles of equipment in high-fire danger areas and clearing vegetation in those areas.

“I care about these things and I want to help fix them,” he said. “We will be laser focused on safety, but I won’t expect you to believe that until you see the results.”

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Noting that the hearing was not intended to address PG&E’s bankruptcy proceedings, committee chairman Assemblyman Chris Holden nevertheless said he’s concerned about the case.

“The PG&E bankruptcy is of paramount concern,” Holden said, citing the urgency of addressing victims’ claims.

As bankruptcy proceedings for the utility move forward, Newsom is urging the Legislature to consider changing liability laws for utilities. California law currently holds utilities like PG&E financially liable for fires started by their equipment, regardless of whether they acted negligently. Advocates for fire victims have criticized that idea, arguing it would reduce utilities’ incentive to prevent their equipment from sparking fires.

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Sophia Bollag covers California politics and government. Before joining The Bee, she reported in Sacramento for the Associated Press and the Los Angeles Times. She grew up in California and is a graduate of Northwestern University.
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