PG&E: Pressures intensifying on multiple fronts for battered utility
The fires still burning across Wine Country could pose an existential threat to California’s largest utility, Pacific Gas and Electric Co.
PG&E's stock price is down 17 percent since Oct. 11, when state fire officials said they would investigate wheth- er PG&E’s power lines, blown by fierce winds, played a role in sparking the fires.
One analyst estimated the company could face liabilities topping $12 billion if investigators blame PG&E. Indeed, what appears to be the first lawsuit faulting PG&E for the fires was filed Tuesday by a Santa Rosa couple who lost their home. The company had just begun to put the deadly 2010 San Bruno pipeline explosion — which led to a $1.6 billion fine from state regulators and a criminal conviction — behind it.
State Sen. Jerry Hill, who has pushed to reform PG&E ever since the San Bruno blast, warned that he will try to
break up the utility if its negligence caused the fires. The fires have displaced tens of thousands of people, killed at least 41 and incinerated entire neighborhoods of Santa Rosa.
“If we find that in this particular case — and we don’t know the cause yet — then frankly I don’t think PG&E should do business in California anymore,” said Hill, D-San Mateo. “They’ve crossed the line too many times. They need to be dissolved in some way, split.”
The utility’s CEO, Geisha Williams, said in an interview Tuesday that she can’t spend time thinking about that scenario. The utility has 4,300 people restoring electricity and natural gas service across the North Bay, where more than a third of a million customers lost power in the past 10 days. Forty-four PG&E employees or retirees lost their homes to the flames.
“I am so focused on responding right now to the outages, restoring power and gas, helping Cal Fire, helping our community rebuild — it’s too early to focus on that,” Williams said.
The fires, she said, also point to a larger threat — a warming world.
Williams noted the hurricanes, fueled by warm oceans, that crippled Houston, Florida and Puerto Rico this year, as well as the long drought in California that was followed by powerful rains and vegetation growth. Usually foggy San Francisco hit 106 degrees in September, a record.
“When you think about all these things together, you have to ask yourself what are the right climate strategies we need?” Williams said. “It’s not, ‘Oh, we need to trim more trees.’ ”
Yet California’s top utility regulator warned Tuesday that while the state has periodically toughened safety standards for power lines and utility poles to prevent wildfires, those changes come at a price.
Placing power lines underground, for example, is expensive, and while it may be safer from windstorms, damage is harder to spot. Broken poles and dangling lines are at least visible.
“The big challenge at the end of this is, how much safety are we willing to pay for?” said Michael Picker, president of the California Public Utilities Commission, which regulates PG&E.
Williams said the utility will not conduct its own investigation into the cause of the fires, leaving that primarily to officials with the California Department of Forestry and Fire Protection, known as Cal Fire.
The utilities commission’s safety division will conduct its own review and has already asked PG&E to catalog and preserve damaged poles and equipment. The safety division also wants any PG&E emails or memos concerning treetrimming operations.
“The reality is no one knows what caused the fires yet, and we’re providing our full support to all the reviews that are occurring,” Williams said.
By Monday afternoon, PG&E had identified 1,500 seriously damaged poles and replaced 800 of them.
“It’s very, very early days, and it’s a bit of a chicken-andegg,” Williams said. “What we don’t know is, did our equipment start the fire, or did the fire damage the equipment?”
The utilities commission has also asked telecommunications companies — which sometimes maintain their own wires and poles, and may install equipment on poles owned by electrical utilities — to save materials damaged in the fires.
Telecom hardware, Picker said, can place hundreds of extra pounds on a pole and catch the wind like a sail. A huge 2007 fire in Malibu started when winds knocked over three poles weighted down with such equipment. The commission is trying to create a statewide database of all utility poles and attached gear.
In recent years, Williams said, PG&E has ramped up the amount it spends inspecting, pruning and sometimes removing trees that run alongside its power lines, as well as checking the condition of its utility poles. Utilities are required to keep tree branches at least 4 feet from most power lines.
The company expects to spend nearly $450 million this year on vegetation management around its lines, a figure that includes about $208 million in emergency spending needed because of the drought. Last year, vegetation management spending stood at $430 million, while in 2014, it was $200 million, Williams said.
“I’m confident that those programs are working as designed,” she said.
PG&E’s tree-trimming has not always worked in the past. The 2015 Butte Fire in Amador and Calaveras counties, which killed two people, started after a spindly pine tree leaned into a PG&E power line. Contractors working for PG&E had recently removed two other nearby trees that had kept the pine from leaning toward the line.
Picker said that the commission reviews the utilities’ spending on tree trimming and pole inspections and occasionally does spot checks.
“We sometimes catch them with failures, but again, it’s 4.2 million poles, and we have 18 staff,” he said.