Fires

California’s top utility regulator says PG&E bankruptcy not a worry, but fires are a ‘s--- pie’

California lawmakers end efforts to reduce PG&E’s liability for wildfires

California lawmakers had the chance to reduce PG&E's liability for wildfires, but chose not to continue with the efforts.
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California lawmakers had the chance to reduce PG&E's liability for wildfires, but chose not to continue with the efforts.

California’s top utility regulator says he does not believe Pacific Gas & Electric is headed toward bankruptcy, despite the mounting threat of billions of dollars of legal liability from wildfires.

Speaking to The Sacramento Bee on Friday, Michael Picker, president of the California Public Utilities Commission, said the bigger worry is what to do to stop the onslaught of devastating wildfires the state has seen in recent years.

PG&E’s woes are, he said, “a small slice of a bigger shit pie. That’s a technical term.”

“What is California doing about wildfires?” Picker said. He called climate change a major unanswered issue, and said, “we have to have other solutions.”

Despite news reports about power lines causing fires, Picker said only one out of ten wildfires is caused by utility infrastructure issues. California wildfires have been traced to a variety of ignition sources, including sparks from vehicles and machinery, arson and lightning.

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Alluding to ongoing debates about forest management policies, Picker said he worries about the estimated 130 million dead trees in the high Sierra that could ignite from causes other than power line problems.

The PUC president acknowledged that PG&E’s growing financial costs and liabilities are a concern and that the state needs to take further steps to ensure the utility, which supplies power in Northern California, has continued borrowing ability at decent rates.

He said he has been on several conference calls in the last week with utility investors and executives, calming nerves and sending a message that the PUC and state Legislature are working to maintain the utility company’s financial stability.

Flyover shows the destruction from the Camp Fire, California’s deadliest wildfire, in Paradise on Nov. 13, 2018.

“I have not been focused on bankruptcy,” he said. “That’s a news media preoccupation.”

He acknowledged that PG&E could file for bankruptcy at some point, but said, “We don’t see that as something immediate.”

The more pressing priority is to help PG&E access low-cost borrowing. “The challenge is that as the cost of borrowing goes up so does peoples’ rates, and that is what we need to avoid.”

PG&E has been hit with numerous lawsuits in the last year stemming from major wildfires believed to be caused by power line issues. Recently completed Cal Fire investigations have determined that 17 Northern California wildfires in 2017 were started by issues with PG&E power infrastructure.

The utility took a major public relations hit last week and this week when it reported problems with one of its power lines in Butte County near a suspected start point for the devastating Camp Fire, at about the time the fire ignited.

Cal Fire officials said they are investigating several possible fire causes and multiple ignition points.

Nevertheless, on Friday, former Chico and Oroville police chief Kirk Trostle and his wife Patty Garrison, a retired school principal, sued PG&E, contending the utility company failed to take appropriate safety steps. The couple’s Paradise home was destroyed in the Camp Fire. A Bay Area attorney filed a similar suit against the utility on Tuesday on behalf of several other fire victims.

PG&E’s stock prices have plummeted since the Camp Fire started, but rebounded slightly on Friday.

PG&E officials reiterated this week that the fire cause has not been determined, and said they are working with first responders in Butte to help the community.

The state Legislature moved this summer to improve PG&E’s financial position by allowing it to borrow money to pay expenses from 2017 fires, and to pass some of those costs on to its customers. The new law also sets up a process to let PG&E pass fire-related costs to consumers for fires sparked after Jan. 1 2019, but doesn’t apply to 2018 fires.

Picker said his attorneys have told him the PUC may be able to adjust its standards to include 2018 fires when it considers any PG&e requests for rate adjustments.

Picker’s comments drew a rebuke from The Utility Reform Network, a watchdog group.

“PG&E’s record of criminal negligence is well known to the CPUC,” TURN executive director Mark Toney wrote. “It is about time that the authorities starting holding PG&E’s board of directors accountable for the actions of management and the destruction those actions have wrought over the years.”

The raging Camp Fire burned through the town of Paradise in Northern California and raced toward the city of Chico. As of Friday morning, November 9, 2018, the wildfire had consumed 20,000 acres.

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