BERKELEY, Calif. — California power regulators on Thursday unanimously approved Pacific Gas & Electric’s $58 billion plan for getting out of a bankruptcy caused by a series of deadly wildfires, despite ongoing worries about the utility’s ability to safely operate its crumbling electrical grid.
The vote by the Public Utilities Commission came just a few hours after a federal judge ripped the company for continuing to engage in reckless behavior that he believes is endangering even more lives.
U.S. District Judge William Alsup blasted PG&E for “flim flamming” him about its newfound commitment to safety in previous hearings. He also raised worries that state power regulators haven’t done enough to prevent “a recalcitrant criminal” from causing more death and destruction as the risk of wildfires rises with the summer temperatures.
“If there ever was a corporation that deserved to go to prison, it is PG&E,” Alsup said.
After enduring Alsup’s scorn, PG&E cleared a key hurdle to end its nearly year-and-half bankruptcy with the PUC’s approval of a complex plan resolving more than $50 billion in claimed losses after the company was blamed for igniting a series of catastrophic wildfires in 2017 and 2018. The Northern California fires killed more than 100 people and destroyed more than 27,000 homes and other buildings.
PG&E used the bankruptcy process to settle those claims for $25.5 billion, including $13.5 billion earmarked for wildfire victims, although some survivors are convinced they will wind up getting much less. Half of the $13.5 billion consists of PG&E stock that critics worry will be worth considerably less, especially if the company is blamed for causing more fires this year.
Before regulators voted, a litany of speakers urged the company’s chief regulator to reject the complex proposal, saying it doesn’t do enough to ensure the nation’s largest utility will act to protect the 16 million people who rely on it for power.
“More communities are angry, frustrated and finished with PG&E,” commission President Marybel Batjer acknowledged before the agency’s vote.
After the approval, PG&E issued a statement promising to do better. Company CEO Bill Johnson said the plan “will help PG&E become the utility that our customers and communities expect and deserve.”
Alsup, the federal judge, wants to crack down on PG&E by ordering the utility to hire more people to inspect its power lines, trim trees and adhere to other potentially expensive requirements aimed at reducing the fire risks from its poorly maintained equipment. The company is appealing his proposed restriction on the grounds that those policing powers should be left to the Public Utilities Commission.
He is considering the mandate as part of a five-year probation that PG&E began serving in January 2017 for felony convictions stemming from an explosion in its natural gas lines that killed eight people in San Bruno, California, in 2010.
If it were up to Alsup, PG&E would be serving time behind bars instead of providing power to a service territory with a population larger than all but a handful of states.
Companies can’t be imprisoned, though, an issue likely to be highlighted again next month when PG&E plans to plead guilty to 84 felony counts of involuntary manslaughter for a 2018 wildfire that wiped out the town of Paradise, California. PG&E will pay a maximum fine of $4 million for those crimes.
In Thursday’s hearing, Alsup repeatedly expressed frustrations about the company’s past assurances that it had become more vigilant about trimming trees and upgrading its equipment, only to ignite more fires. Those promises “ring hollow after awhile,” Alsup scolded PG&E’s lawyers before labeling past attempts at improving the maintenance of its power lines as “crappy.”
While Alsup was raising the idea of more safety hearings, one of PG&E’s top executives delivered reassurances about the company’s future direction during Thursday’s hearing in a federal bankruptcy court trial, which will determine whether PG&E’s plan also can gain the required court approval by a June 30 deadline.
“We can provide safe service moving forward,” testified Jason Wells, PG&E’s chief financial officer.
Christine Hammond, an attorney for the PUC, told Alsup that state regulators believe PG&E has been making significant progress toward operating more safely and said regulators are committed to “do more, do better, do faster.”
Michael Aguirre, a lawyer representing two PG&E customers, urged Alsup not to trust the commission or the company that it regulates. “Keep the pressure on,” he pleaded.
The plan approved by regulators clears a path for them to revoke PG&E’s state license and make it easier for the state to turn the utility into a not-for-profit cooperative. It also requires PG&E to break up its sprawling service into regional divisions and overhaul its board of directors. The company plans to replace 11 of its 14 current board members, including Johnson, who will step down as CEO on June 30 after only 14 months on the job.
But the reforms included in PG&E’s plan still might not be enough, acknowledged Clifford Rechtschaffen, one of the the five PUC board members.
“It’s not perfect from any stakeholder’s perspective,” he said before voting in favor of the plan.