Alsup blasted PG&E for its abysmal track record
By MICHAEL LIEDTKE AP Business Writer
SAN FRANCISCO (AP) — A U.S. judge ripped into Pacific Gas & Electric on Wednesday, saying its executives have put greed before safety and telling officials from the utility blamed for catastrophic California wildfires to plan to add at least 1,100 more tree trimmers to cut the risk of even more blazes.
“I am going to do everything I can to protect this state from more death and destruction from this convicted felon,” U.S. District Judge William Alsup said of PG&E.
He delivered the harsh rebuke of the nation’s largest utility during a court hearing to review how well PG&E has complied with the terms of a five-year criminal probation imposed after its natural gas lines blew up a San Francisco Bay Area neighborhood and killed eight people in 2010. The utility was convicted of six felony counts of falsifying records and safety violations in 2016.
Alsup blasted PG&E for its abysmal track record since its probation began in January 2017. In that time, PG&E’s aging power lines have been blamed for igniting a series of wildfires that killed nearly 130 people and destroyed thousands of homes.
The aftermath saddled PG&E with more than $50 billion in potential liabilities, driving the San Francisco company into bankruptcy 13 months ago.
The judge told PG&E that he believes the fires could have been prevented had it upgraded and maintained its electrical system instead of funneling billions of dollars into shareholder dividends and executive bonuses.
“PG&E poses a threat to the safety of the people of Northern California because you are so far behind,” Alsup said.
PG&E lawyer Kevin Orsini assured the judge that the company has “fundamentally changed” since hiring a new CEO, Bill Johnson, and overhauling its board of directors last April.
After scolding the utility for its neglect, Alsup complimented its new management team for deliberately turning off power to as many as 2 million people last fall to prevent wildfires during hot, windy weather. Although the outages infuriated and inconvenienced people, the judge said he believes they may have prevented dozens more potentially deadly fires.
“They deserve some credit (for the outages) and having the courage to do it in the face of all the criticism,” Alsup said.
As another firefighting measure, Alsup said he plans to order PG&E to expand its tree-trimming force from roughly 5,400 contractors to 6,500 to help prevent vegetation from falling onto its power lines and igniting.
Alsup did not set a timeline for adding tree trimmers, giving PG&E until March 2 to provide more information about logistical challenges in doing so.
The judge’s harsh words came a day after the head of the California Public Utilities Commission proposed a new enforcement process that could allow the regulatory agency to revoke PG&E’s license if it failed to comply.
“I am very concerned about PG&E’s pattern of safety-related failures,” commission President Marybel Batjer wrote Tuesday.
Batjer’s words largely echoed those of Gov. Gavin Newsom, who appointed her last year. Since December, Newsom has tried to pressure PG&E into taking more radical steps to change its culture and reduce its debt when it comes out of bankruptcy so it can afford to invest an estimated $40 billion into upgrading its decaying electrical grid during the next decade.
Newsom and Batjer have unusual leverage over PG&E because the company needs California to approve its reorganization plan to emerge from bankruptcy by June 30 so it can qualify for coverage from a wildfire insurance fund created by the state last summer.
Noting his ability to crack down on PG&E will end with its probation in 23 months, Alsup urged Newsom to take a hard look at whether the utility should remain part of a for-profit company that faces continual pressure from investors to boost its stock price by making more money.
“We are in a critical chapter,” Alsup said.
Newsom has threatened to lead an government-backed attempt to take over PG&E unless it bends to his demands, which include replacing the company’s entire 14-member board, including Johnson.
PG&E has promised to reshuffle at least part of its board and is in talks with Newsom’s representatives about other possible concessions.
But the company is committed to remaining a for-profit company, a point it punctuated this week when it released five-year projections that it would earn nearly $2.4 billion in 2024 — the most in its history. The company has lost $14.5 billion in the past two years as it deals with the devastation from wildfires.
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