Regulators weigh new liability rules
Protesters disrupt state Public Utilities Commission meeting, declaring ‘No PG&E bailout’
SAN FRANCISCO » As protesters shouted the names of people who died in the Camp Fire, the state Public Utilities Commission on Thursday voted to begin writing new rules that will allow utilities like PG&E to pass on the costs of wildfires to consumers.
Holding signs that said “No PG&E bailout,” about 30 protesters drowned out commissioners as they tried to discuss what might otherwise have been a perfunctory vote creating a system
where wildfire costs would hit ratepayers in their wallets.
“We are here to speak for the people killed in the fire,” a woman shouted.
The wildfire cost passthrough was mandated by the state legislature last year in the wake of North Bay fires in 2017. Former Gov. Jerry Brown signed the legislation about two months before the Camp Fire — the deadliest and most destructive wildfire in state history — destroyed the town of Paradise in Butte County, killing 86 people. Cal Fire has not determined the cause of the devastating inferno, but investigators have zeroed in on a damaged PG&E high tension tower located in the Feather River canyon on the outskirts of Paradise.
It was the Camp Fire and other PG& E safety issues that had tensions boiling over at the meeting.
The commission’s vote came as the giant utility company is staggering — its stock price was down to $17.64 at noon Thursday from $24.40 on Jan. 4 amid bankruptcy fears.
U.S. District Court Judge William Alsup on Wednesday warned he is leaning toward changing the terms of the company’s criminal probation stemming from the 2010 San Bruno pipeline explosion. Alsup wrote that PG&E could be required to conduct a massive safety review of its electrical grid with a goal of not causing any wildfires next year. PG&E is also undergoing a company-wide internal review of its operations as it searches for a way forward.
Much could be decided during a Jan. 30 hearing when Alsup reviews evidence alleging the utility failed to notify its probation officers that it had settled fire lawsuits, and also about a criminal investigation re- lated to a fire it caused.
A PG&E spokesman said Wednesday that it is studying Alsup’s order and it remains committed to safety.
PUC President Michael Picker announced last month the commission will consider removing PG& E directors and breaking up the utility into smaller regional companies because of its poor safety record, among other possible actions. The regulators could even pull the power company’s plug altogether and allow the state to take it over as a publicly run utility.
One critic of the company said Thursday that change could be coming.
“I think they will lose the franchise and some other provider will come in,” said Mark Toney, executive director of The Utility Reform Network, or TURN.
If it can survive, PG& E needs to replace its board members “with engineers and safety experts” who can radically change the company’s culture, he said.
Toney was insistent that the cost of a program like that ordered by the judge not be passed on to customers, unlike the PUC’s action Thursday.
Another leading critic of PG&E, state Sen. Jerry Hill, D-San Mateo, agreed.
Anything “that is part of criminal punishment” shouldn’t be passed on to ratepayers, he said.
Jessica Tovar, who helped organize the protest, said the commission’s process doesn’t allow real debate or true public input on major decisions.
“Next fall there will be more deaths and more fires,” she said.
PG&E is facing “approximately 500” lawsuits involving “at least 3,100 plaintiffs” stemming from Northern California wildfires, according to recent documents on file with the U.S. Securities and Exchange Commission. Many are from the North Bay fires, where the state blames 12 of the blazes on PG&E equipment failures.
Also, Cal Fire is seeking to recoup more than $87 million in costs for putting out the Butte Fire in Calaveras County in 2015, which it blamed on a pine tree coming in contact with an electric line. It claims the contact occurred because of PG& E’s failure to properly manage vegetation in the area. The state Office of Emergency Services, Calaveras County and other agencies are also suing PG&E.
PG&E is the early steps of asking for a rate hike to help pay for its troubles. SEC filings show it has $1.4 billion in wildfire insurance for the period of Aug. 1, 2018, through July 31, 2019, and that potential liabilities from the Camp Fire are likely to dwarf that dollar amount.
“If the utility’s equipment is determined to be the (Camp Fire’s) cause, the utility could be subject to significant liability in excess of insurance coverage that would be expected to have a material impact on (the company’s) financial condition, results of operations, liquidity, and cash flows,” company officials wrote in an SEC filing.
Meanwhile Thursday, PG& E filed hundreds of pages of internal records in response to an earlier order by Alsup asking for records related to the deadly 2017 Atlas Fire in Napa and more than a dozen other blazes linked to PG&E equipment the same year. The records provide details of weather conditions, particularly wind speeds, at the time and location of those fires, as well as further details on the causes of the blazes.
The records include a Cal Fire report that found two oak trees caused wires to go down at the Atlas Fire starting points. The utility also turned over vegetation maintenance reports for those areas that detailed tree trimming efforts.
Pacific Gas & Electric crews work to restore power lines in Paradise in 2018.