Last week’s column on PG&E’s pending bankruptcy closes the book on a piece I wrote a year and half ago where I warned to be on the lookout for the twin “Bs”: Bailout and Bankruptcy.
Both became realities when Gov. Brown and the state legislature rammed through a ratepayer-backed bailout plan where the utility would be allowed to issue special bonds to pay off billions of dollars of uninsured costs stemming from the catastrophic 2017 Wine Country Wildfires. That was the beginning of the end.
The end came a few days ago when with PG&E’s announcement it intends to file for bankruptcy by the end of this month.
Aside from billions of dollars of new liability arising from the deadly Camp Fire conflagration that was apparently started by another failure of PG&E’s equipment, the straw that broke the camel’s back was a federal judge’s proposed order on Jan. 8 informing 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 the deadly infernos in the Wine Country fires and this fall’s Camp Fire. He referred to PG&E’s “history of falsification of inspection reports.”
He further told the giant utility that 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.”
On Jan. 14, PG&E announced its intention to seek protection under a Chapter 11 bankruptcy reorganization plan citing at least $30 billion in wildfire liabilities while carrying only $1.4 billion in wildfire insurance coverage. According to industry analysts, PG&E’s stock prices have plunged by 75 percent.
The timing of the bankruptcy announcement is interesting given that CEO Geisha Williams tendered her resignation the day before.
Even more interesting is the fact that following Federal Judge William Alsup’s Jan. 8 directive to PG&E of his intended order, three executives responsible for the day-to-day operations of the corporation’s electrical distribution system, submitted their resignations. Coupled with Williams quitting, the trio’s unexpected exit has left the electrical monopoly rudderless in the most troubled seas of its existence.
Although Geisha Williams’ hiring in March of 2017 was heralded as a milestone — the Cuban-born executive was the first ever Latina CEO of a Fortune 500 company — I believe she was brought aboard for another reason.
She is one of the few corporate types who has been in the forefront of espousing the reality of global warming, climate change, and most recently endorsing former-Governor Jerry Brown’s clarion call that these prodigiously destructive wildfires are the “new normal” of our times.
She most likely was hired, in part anyway, to put a “green face” on the non-descript PG&E organizational chart. It was also smart politics given Brown’s status as a world-recognized proponent of climate change warming, oft-cited as a major contributing factor to the new norm of wildfires.
All of this meshed quite nicely in Sacramento in 2017-18 when the state legislature, following Brown’s lead, expedited historic legislation bailing out PG&E with the aforementioned conscripted ratepayer backing of the wildfire liability bonds.
You could say, the entire state capitol rolled over like a Gold Rush mining camp madam for a utility that was rewarded for its bad behavior that included 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, and according to Judge Alsup “a history of falsification of inspection reports.”
Well, we’ll see what happens. But most likely any developments are not going to be positive for California taxpayers in general, and PG&E’s ratepayers specifically. You know the old saying, “a nod is as good as a wink to a blind horse.” And you know who the blind horse is — it’s not PG&E.
(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: http://www.kpfn.org.)