Judge rips PG&E’s safety record before key bankruptcy vote

By Michael Liedtke, The Associated Press

BERKELEY, Calif. — California power regulators are mulling whether to approve Pacific Gas & Electric’s $58 billion plan for getting out of a bankruptcy caused by in a series of deadly wildfires.

The vote is scheduled Thursday afternoon, just a few hours after a federal judge ripped the company for continuing to engage in reckless behaviour that he believes is endangering even more lives.

The drama unfolded during separate hearings held by the California Public Utilities Commission and the judge overseeing PG&E’s criminal probation for a fatal explosion that occurred a decade ago.

PG&E would clear a key hurdle in its effort to end its nearly year-and-half stint in bankruptcy if the Public Utilities Commission approves a complex plan resolving more than $50 billion in claimed losses after the company’s fraying electrical grid ignited a series of catastrophic wildfires during 2017 and 2018. The Northern California fires killed more than 100 people and destroyed more than 27,000 homes and other buildings.

PG&E used the bankruptcy process to settle those claims for $25.5 billion, including $13.5 billion earmarked for the wildfire victims, although some survivors are convinced they will wind up getting much less. That’s because half of the $13.5 billion consists of PG&E stock that critics of the plan worry will be worth considerably less, especially if the company is blamed for causing more fires later this year.

Before regulators planned to vote on PG&E’s plan, a litany of speakers urged the company’s chief regulator to reject the complex proposal because they believe it doesn’t do enough to ensure the nation’s largest utility will do enough to protect the 16 million people who rely on it for power.

U.S. District Judge William Alsup also raised the same worries during a hearing focused on whether he should order PG&E to hire more people to inspect its power lines, trim trees and adhere to other potentially expensive requirements aimed at reducing the fire risks posed by its poorly maintained equipment.

The mandate is being considered as part of a five-year probation that PG&E began serving in January 2017 for felony convictions stemming from an explosion in its natural gas lines that killed eight people in San Bruno, California, in 2010.

Alsup blasted PG&E for “flim flamming” him about its newfound commitment to safety in previous hearings while expressing worries that California power regulators haven’t done enough to prevent “”a recalcitrant criminal” from causing more death and destruction as the risk of more wildfires rise with the summer temperatures.

“If there ever was a corporation that deserved to go to prison, it is PG&E,” Alsup said.

Companies can’t be imprisoned, though, an issue that will be highlight next month when PG&E plans to plead guilty to 84 felony counts of involuntary manslaughter for a 2018 wildfire that wiped out the town of Paradise, California. PG&E will pay a maximum fine of $4 million for those crimes.

Alsup wants to force PG&E to adopt even more safety measure while he supervises the utility’s probation for the San Bruno explosion through January 2022, but the company is appealing his proposed restriction on the grounds that those policing powers should be left to the state Public Utilities Commisson.

In Thursday’s hearing, Alsup repeatedly expressed frustrations about PG&E’s past assurances that he had become more rigorous about trimming trees and upgrading its equipment, only to have the utility’s grid ignite more fires. Those promises “ring hollow after awhile,” Alsup scolded PG&E’s lawyers before labeling past attempts at improving the maintenance of its power lines as “crappy.”

While Alsup was raising more safety hearings, one of PG&E’s top executives delivered more reassurances about the company’s future direction during the second day of a trial focused on whether a U.S. Bankruptcy Judge Dennis Montali should confirm its bankruptcy plan by a June 30 deadline.

“We can provide safe service moving forward,” testified Jason Wells, PG&E’s chief financial officer.

Christine Hammond, an attorney for the Public Utilities Commission, also said state regulators believe PG&E has been making significant progress toward operating more safely during an appearance before Alsup. She told the judge that regulators are committed to “do more, do better, do faster.”

The Public Utilities Commission promised to provide Alsup with more details about its controls on PG&E in a document due in two weeks. PG&E must file additional documents with Alsup in three weeks.

Michael Aguirre, a lawyer representing two PG&E customers, urged Alsup not to trust the Public Utilities Commission or the company that it regulates. “Keep the pressure on,” he pleaded.

If California regulators approve PG&E’s bankruptcy plan, it will clear a path for regulators to revoke the company’s state license and make it easier for the state to turn the utility into a not-for-profit co-operative.

Michael Liedtke, The Associated Press


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