State lawmaker blasts PG&E’s $1.68B settlement hatched by PUC
PG&E would face a nearly $1.7 billion financial punishment for its role in causing lethal wildfires in 2017 and 2018 under a plan hatched by California regulators that a state lawmaker swiftly labeled a “farce” that is too favorable to the power company.
The proposed $1.68 billion settlement was filed by staffers with the Safety and Enforcement Division of the state Public Utilities Commission who envisioned a deal that forces the shareholders of the embattled utility to foot the bill for the penalty.
Despite the dollar amounts involved, the deal falls short of the financial punishment that PG&E should face for fires that caused well over 100 deaths and destroyed 14,000 homes, in the view of state Sen. Jerry Hill, who has been a harsh critic of PG&E ever since the company caused a deadly explosion of natural gas in San Bruno in 2010.
“This is a slap on the wrist for PG&E,”
said Hill, whose district in Santa Clara County and San Mateo County includes San Bruno. “It’s a farce and does not reflect the pain and suffering that PG&E has caused in California. PG&E is negligent and has ignored its responsibilities to provide safe and reliable utility services.”
The proposed settlement was crafted by the PUC’s Safety and Enforcement Division, the state agency’s Office of the Safety Advocate, the California Coalition of Utility Employees, and PG&E, according to the commission.
The proposal must still be reviewed by a PUC administrative law judge and the full five-member commission, which has the final say on any plan.
Hill compared the scale of the disaster in San Bruno to the extent of the wildfire catastrophes in the North Bay Wine Country and nearby regions in October 2017 and in Butte County as a result of the Camp Fire in 2018.
The San Bruno explosion killed eight and destroyed 38 houses, and the PUC eventually imposed a $1.6 billion penalty on PG&E, which to this date remains the largest financial punishment ever levied on an American utility.
This time around, PG&E’s financial punishment of $1.68 billion for the fires of 2017 and 2018 would exceed the San Bruno penalty by just a bit — despite 120 deaths, the loss of 14,000 homes and the near-destruction of the town of Paradise in recent years.
“There’s certainly
something wrong here,” Hill said.
The parties to the settlement urged the PUC to use an expedited timetable so the commissioners can issue a final decision in time for PG&E’s bankruptcy case to be resolved by a state deadline of June 30, 2020.
Confronted by a forbidding landscape of liabilities and wildfire-linked claims, PG&E filed for bankruptcy in January, listing $51.69 billion in debts and seeking to reorganize its shattered finances.
The proposed settlement prevents PG&E from recovering $1.625 billion in wildfire-related costs from ratepayers. The deal also would fund an additional $50 million by PG&E shareholders in system enhancements and community engagement initiatives to strengthen its electric operations and maintenance in an effort to mitigate the risk of wildfires.
Ratepayers won’t be obliged to pay any of the $1.675 billion penalty, which must be borne by shareholders, according to PUC staffers.
“Shareholder-funded system enhancements include modifications that the utility has already undertaken in response to the 2017 Northern California wildfires and the 2018 Camp Fire,” PG&E said in a regulatory filing on Wednesday with the Securities and Exchange Commission. “These enhancements include vegetation management and electric operations-focused initiatives, community engagement-focused initiatives, and transparency and accountability-focused initiatives.”