Wednesday, January 23, 2019

Judge, Gov., CPUC and Protesters Weigh in on PG&E Mess

By Hudson Sangree

The California Public Utilities Commission began the process of implementing wildfire cost recovery provisions Thursday, as protesters argued against any effort to bailout Pacific Gas and Electric for the deadly wildfires of 2017 and 2018.

Protesters chant, with some wearing masks, at Thursday’s PUC meeting in San Francisco. | CPUC

The day before, a federal judge proposed ordering PG&E to reinspect its entire grid before the start of the 2019 fire season and fix any problems it finds as a new condition of its probation in the San Bruno gas line explosion.

And earlier this week, California’s new governor, Gavin Newsom, said he had been talking with PG&E executives to address the utility’s dire financial situation.

The moves are the latest developments in the quickly evolving PG&E meltdown in the wake of November’s Camp Fire, which killed 86 people. The utility’s possible culpability for that blaze and other massive wildfires has raised the specter of bankruptcy, caused PG&E’s stock price to plummet and led to speculation about whether the company might sell major assets, including its gas division. (See PG&E’s Troubles Mount After Camp Fire; PG&E Stock Plunges, Credit Downgraded to ‘Junk’ Status.)

Dealing with PG&E’s safety problems is “like repairing a jetliner while it’s in flight,” CPUC President Michael Picker said in a December news release. “Crashing a plane to make it safer isn’t good for the passengers.”

In its meeting Thursday, the CPUC unanimously approved an order instituting rulemaking to begin putting in place the provisions of last year’s landmark wildfire bill, SB 901, to allow for cost recovery by electric utilities. (See California Wildfire Bill Goes to Governor.)

The new law “describes how the commission will review applications by electrical corporations that request recovery of costs and expenses from wildfires in 2017 … and requires the commission to ‘determine the maximum amount the corporation can pay without harming ratepayers or materially impacting its ability to provide adequate and safe service,’” the commission said.

“In undertaking the adoption of criteria and a methodology to determine the maximum amount the corporation can pay, the commission is mindful of both the finite resources of ratepayers in California and the importance of maintaining financially viable utilities to provide safe and reliable service,” it said.

The order laid out a series of questions to help determine the criteria and methodology the PUC will use to evaluate applications by utilities for cost recovery, and established a schedule for the proceeding, with opening comments due Feb. 11.

Protesters with the Democratic Socialists of America were among those who argued against a bailout for PG&E on Thursday. | CPUC

Identify and Fix

At least a dozen protesters occupied the PUC hearing room in San Francisco on Thursday, chanting and speaking beyond the one-minute time limit Picker allowed. Some continued over the president’s repeated objections.

“Ma’am, can you finish it up?” Picker said to one public speaker as she shouted at him from the lectern. “You’re repeating yourself.”

CPUC President Michael Picker listens Thursday to speakers protesting any move to relieve PG&E of liability for deadly wildfires. | CPUC

The speakers, including members of the Democratic Socialists of America’s San Francisco chapter, argued that the state should not provide cost recovery to utilities responsible for wildfire deaths.

“You need to be in jail. You need to stop getting money from the public,” one speaker said regarding PG&E.

Another speaker read aloud the names of dozens of fire victims.

On Wednesday, U.S. District Judge William Alsup in San Francisco said that unless he was convinced otherwise, he would impose new probation conditions on PG&E in the 2010 San Bruno gas line explosion case, which killed eight people and resulted in the utility being convicted of six felonies for knowingly violating federal safety rules and obstructing a federal investigation.

Those new conditions would include requiring the utility to reinspect its entire grid in the coming months and to remove any trees or branches that could contact power lines. In addition, he said PG&E would have to “identify and fix all conductors that might swing together and arc due to slack and/or other circumstances under high-wind conditions.” The utility “shall identify and fix damaged or weakened poles, transformers, fuses and other connectors; and shall identify and fix any other condition anywhere in its grid similar to any condition that contributed to any previous wildfires,” Alsup wrote.

“These conditions of probation are intended to reduce to zero the number of wildfires caused by PG&E in the 2019 wildfire season. This will likely mean having to interrupt service during high-wind events (and possibly at other times), but that inconvenience, irritating as it will be, will pale by comparison to the death and destruction that otherwise might result from PG&E-inflicted wildfires,” the judge wrote.

He gave the parties until Jan. 23 to show why he shouldn’t impose the new conditions and scheduled a hearing for Jan. 30.

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