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PG&E’s Tangled Webs

Note: On Sunday, three days after I wrote this column, PG&E announced that its CEO, Geisha Williams, had resigned after less than two years on the job. Analysts are estimating that the energy giant is now facing at minimum a staggering $32 billion in wildfire liability expenses. It’s also believed that PG&E employees could learn this week if the utility will declare bankruptcy given that its rapidly deteriorating financial position most likely will worsen now that a federal judge has indicated he will issue an order requiring it to “fire proof” its 106,000-mile electrical grid along with other mandatory “fix-it” directives.

Geisha Williams

Pacific Gas & Electric Company has walked itself into the biggest hurt locker that one can imagine — and they it did all by themselves. 

Thank goodness there is one person in this state who is doing their job because PG&E’s enablers — the governor, the state legislature, and the California Public Utilities Commission — have been woefully derelict in their duties to protect the utility’s ratepayers who until recently have had no one looking out for their best interests.

All that changed in the past couple of weeks when a federal judge, who normally would not intervene jurisdictionally in state affairs stepped forcefully into the PG&E Wildfire dilemma.

Coming seemingly out of nowhere, U.S. District Judge William Alsup this past Wednesday, Jan. 8, told PG&E that he plans to order the company to inspect and fire-proof its 106,000-mile system of transmission lines because of evidence that its equipment was responsible for igniting deadly infernos in the 2017 Wine Country fires and this fall’s Camp Fire conflagration. He referred to PG&E’s “history of falsification of inspection reports.”

He also said the proposed order could include a requirement that PG&E “fix any other condition anywhere in its grid similar to any condition that contributed to any previous wildfires.” 

Why is Judge Alsup now in the picture with the PG&E matter? Because he’s the judge handling the probation imposed on PG&E for the 2010 San Bruno pipeline explosion where the company was found guilty of violating a half-dozen felony counts of federal pipeline laws. 

Unbeknownst to the public, sometime last summer, Alsup directed PG&E to immediately report any incidents where its equipment may be the cause of starting wildfires. That order explains why PG&E self-reported equipment failures several hours after the Camp Fire ignited last fall, a practice out-of-keeping with PG&E’s history in such matters where they usually kept mum while fire authorities conducted investigations.

Part of PG&E’s history includes a decade-long foot dragging concerning its legal obligation to keep accurate maps of the location of its power lines in high risk fire areas. As previously reported in a Bay Area News Group story:

For the better part of a decade, California’s utilities have helped to stall the state’s effort to map where their power lines present the highest risk for wildfires, an initiative that critics say could have forced PG&E to strengthen power poles and bolster maintenance efforts before this month’s deadly North Bay fires.

State officials began working to tighten regulations on utilities and create the detailed maps after wind-toppled electrical lines in 2007 ignited catastrophic fires in the San Diego area. But nearly 10 years later, the state Public Utilities Commission — which initiated the process — still hasn’t finished the maps, let alone adopted strict new regulations.

A review of the mapping project by the Bay Area News Group shows that utilities have repeatedly asked to slow down the effort and argued as recently as July that, as PG&E put it, certain proposed regulations would “add unnecessary costs to construction and maintenance projects in rural areas.”

On Oct. 6, two days before the start of the deadliest outbreak of wildfires in California history, two administrative law judges assigned to oversee the project granted yet another delay at the request of PG&E and other utilities.

The timing of that 74-day deadline extension and the decade of seemingly endless debate about the maps has outraged lawmakers who have been pushing regulators for years to speed up a project designed to prevent catastrophic fires like the ones in Wine Country that killed at least 42 people and destroyed more than 5,000 homes and businesses.

“The sad part is the future didn’t arrive before these fires,” said state Sen. Jerry Hill, D-Redwood City, a longtime critic of PG&E and the PUC. “It’s an outrageous example of negligence by a regulatory agency.”

What’s PG&E’s response to Judge Alsup’s proposed order being heard in in U.S. District Court in San Francisco on Jan. 30? 

According to a public statement issued on Jan. 8, the company said, “PG&E’s most important responsibility is the safety of our customers and the communities we serve. We are aware of Judge Alsup’s orders and are currently reviewing. We are committed to complying with all rules and regulations that apply to our work, while working together with our state and community partners and across all sectors and disciplines to develop comprehensive, long-term safety solutions for the future.”

Meanwhile, PG&E’s legal and financial problems are growing daily.

The Sacramento Bee reported that, “PG&E, facing billions in potential losses from the Camp Fire and other wildfires, is reportedly exploring the sale of its natural gas division or a bankruptcy filing as it tries to deal with its staggering financial liabilities.”

National Public Radio, quoting anonymous sources, said last week that “PG&E might sell the gas division as well as some of its real estate, including its headquarters in San Francisco, to raise cash for wildfire claims. The entire effort is part of a strategy code-named “Project Falcon.”

And Reuters reported that PG&E “is again considering filing for bankruptcy as a way of dealing with its liabilities. PG&E’s chief executive, Geisha Williams, first publicly raised the possibility of bankruptcy last summer, when the Legislature was considering a bailout plan for the utility. The Legislature approved some protections for the company in September.”

As I said, PG&E has no one to blame but themselves for the dire predicament they’re in.  It brings to mind the old saying, “What a tangled web we weave, when first we practice to deceive.”

(Jim Shields is the Mendocino County Observer’s editor and publisher, and is also the long-time district manager of the Laytonville County Water District. Listen to his radio program “This and That” every Saturday at 12 noon on KPFN 105.1 FM, also streamed live:

 (ms notes: After CEO Williams announced her resignation, PG&E followed up by saying their VP and General Counsel John Simon, an attorney!, has been appointed interim CEO while the Board looks for a new permanent CEO. It’s not clear what in her very ordinary, non-distinctive background qualified Ms. Williams for the position of CEO of a major utility company other than this silly note on her Wikipedia page: “In March 2017, she became the first Latina CEO of a Fortune 500 company.” We have come a long ways down from when real executives like Louis Roddis Jr. ran utility companies.)

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