A federal judge has ordered California’s Pacific Gas and Electric Co. (PG&E) and the parent corporation to not pay shareholder dividends indefinitely as state authorities review the utility’s wildfire mitigation plan.
U.S. District Court Judge William Alsup of the Northern District of California was critical of the vegetation management plans after reviewing the latest mitigation plan, previously submitted to state regulators.
Alsup also plans a sentencing hearing in ongoing proceedings he oversees related to PG&E’s fatal 2010 natural gas pipeline rupture and explosion in San Bruno. The San Francisco-based utility was sentenced in 2017 to five years probation after being found guilty on six criminal counts related to the tragedy.
Five additional conditions related to wildfire preventive work were imposed, which Alsup said "simply requires full compliance with existing law." He dismissed PG&E's contention that an adequate vegetation management plan would require superhuman efforts and excess costs of up to $150 billion.
The utility paid PG&E Corp. dividends of $925 million in 2016 and $798 million in 2017, while common stockholders received $921 million in 2016 and $1 billion in 2017 dividends, the judge noted.
The five conditions are to "protect the public from further death and destruction resulting from PG&E-caused wildfires." The conditions require complying with all vegetation management laws; set specific targets; allow unannounced inspections by the court; require traceable, verifiable and accurate records of vegetation management; and require sufficient financial and workforce resources to meet the requirements.
PG&E spokesperson James Noonan said the utility "shares the court's commitment to safety" and everyone must work together "with urgency" to lower the risk of wildfires. He said PG&E is committed to completing the work outlined in its recently submitted Wildfire Safety Plan.
The mutual goal is to "develop comprehensive, long-term safety solutions for California," Noonan said.
In issuing a second order to determine why PG&E's probation conditions should not be modified, Alsup described PG&E's “unsafe conduct,” which has led to "recurring deadly wildfires caused by its electrical system.”
Since January Alsup has issued several orders and held several show-cause hearings, the next one of which is set for March 22.
PG&E and the parent corporation filed for Chapter 11 bankruptcy protection in January.