PG&E’s blunders make it a target
Authorities suspect that downed PG&E power lines may have sparked the devastating wildfires in the North Bay that have so far killed 42 people. In the past dozen days, about 100,000 people have been evacuated statewide as 21 large fires decimated at least 8,400 structures and burned through more than 246,000 acres. Most of the damage was in PG&E’s vast service area.
At this point, we really don’t
know if Pacific Gas and Electric Co. is at fault. But in some ways, it doesn’t matter. After a major tragedy like these fires, we need someone, something to blame. And PG&E is the perfect villain.
This is the company whose negligence led to a natural gas pipeline explosion in San Bruno seven years ago, a tragedy that killed eight people and injured more than 50. A federal jury found the company guilty of obstructing justice by lying to regulators about its pipeline-testing policy. PG&E was also accused of collaborating with a top state regulator to find a judge who would be more friendly to the company.
So PG&E doesn’t enjoy the benefit of the doubt in the North Bay fires. The company’s new CEO, Geisha Williams, must craft a delicate strategy in which PG&E acknowledges that skepticism and — if investigators find convincing evidence — somehow accept moral responsibility for the fires without taking on legal responsibility.
“At present, we’re focused on our customers and working safely to restore the last few thousand who are without electric and gas service,” company spokesman Keith Stephens said in an email. “That’s really where our focus is. Communicating with them and supporting them during the restoration and rebuilding process.
“It’s early days, and these reviews of what happened will take time,” Stephens wrote. “We’re going to be open and transparent throughout the process and cooperate with reviews with regulators and other agencies.”
The liability for the fires could rise to $12 billion, J.P. Morgan analysts estimate — more than the $10.2 billion PG&E paid to creditors in the wake of its 2001 bankruptcy.
Given its past misdeeds, PG&E should pledge that it is committed to finding the truth and sharing information with regulators and consumers on a timely basis, said Kathleen Wailes, an independent consultant and a former senior strategist with the Levick communications firm in Washington.
“They must be accountable and transparent,” Wailes said. “Even when we don’t know about what caused the fires, if we were responsible, we will rectify the situation and prevent another tragedy.”
In a piece in Sunday’s San Francisco Chronicle Insight section, Williams noted that PG&E plans to share regular updates on a new website, www. pgecommitment.com.
In some cases, it might be a good idea for the company to show some kind of contrition, said Derek Arnold, a professor at Villanova University who specializes in crisis management.
“Depending on both the level of damage the event has caused and the amount of responsibility the company wishes to take for its occurrence, it may have to even apologize,” Arnold wrote in an email.
But “an organization has to consider the type of apology it wants to go on record for which it is taking accountability,” he wrote. “The framing of this apology is important to convey the proper tone of contrition.”
Another option is to connect the incident to a higher-level problem with greater stakes.
“A company can try to ‘transcend’ an issue by re-framing it from something the public is upset about by moving it to a more abstract idea,” Arnold wrote.
That’s what PG&E seems to be doing. Williams said the fires point to the larger threat of climate change, citing recent hurricanes, California’s long drought, and recent record heat in San Francisco. Taken together, she said, those call for new “climate strategies” that go beyond questions like tree trimming.
Wailes thinks the strategy implicit in Williams’ responses seems calculated to deflect attention from the fires, “to make something else the tallest guy in the room,” she said.
But that’s not enough. If PG&E really believes climate change is the real issue, then the company should say what it or other companies and the government should do about it, Wailes said.
In any case, PG&E has a very narrow opportunity to get this right — or at least avoid the mistakes of its handling of San Bruno.
Besides PG&E’s own archives, Williams has some companies in PG&E’s hometown of San Francisco she can learn from.
Wells Fargo squandered its opportunity to make things right. The San Francisco banking giant admitted that employees had apparently created millions of fraudulent accounts to hit aggressive sales targets. The company repeatedly apologized but continued to shield top executives like current CEO Timothy Sloan and the board of directors from any responsibility.
And we continue to hear new scandals emerge from the bank: Wells Fargo allegedly denied loans to “Dreamers,” young people who came to the country illegally as small children and stayed; overcharged veterans under a federal mortgage refinancing program; and forced as many as 800,000 consumers to buy expensive and unneeded car insurance.
For these reasons, state Treasurer John Chiang, who’s running for governor, announced last week that he will continue to ban Wells Fargo from managing the state’s investment portfolio and underwriting state bonds.
“The opaque manner with which the bank continues to do business and the frequency of new disclosures of wanton greed and lack of institutional control makes this decision so clear that there really was no choice at all,” Chiang said in a statement.
The same kind of cloud also hangs over PG&E. Already, the company faces lawsuits from homeowners displaced by the fires.
And state Sen. Jerry Hill, D-San Mateo, 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.
“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. “They’ve crossed the line too many times. They need to be dissolved in some way, split.”
PG&E already knows how to play the villain. For Williams, a utility veteran now thrust into the spotlight, it’s time to discover if the company can play a new role.
After a major tragedy like these fires, we need someone, something to blame. And PG&E is the perfect villain.