California regulators on Thursday unanimously slapped a $1.9 billion penalty on Pacific Gas and Electric Co. (PG&E) for its role in the horrific wildfires that ravaged Northern California in 2017 and 2018, and separately postponed until the Fall a vote on a long-standing investigation of the San Francisco-based combination utility’s safety culture.
The five-member California Public Utilities Commission (CPUC), meeting virtually via the internet, voted 5-0 for the modification of a settlement among PG&E, CPUC’s Safety and Enforcement Division and Safety Advocate, and the Coalition of California Utility Employees. The revision that had to be accepted by all parties was crafted by Commissioner Clifford Rechtschaffen.
Rechtschaffen’s modifications added $262 million to the penalty due to what the regulators called “the pervasive nature” of the identified violations and the “unprecedented harm” caused by PG&E.
PG&E spokesperson James Noonan said the utility remains “deeply sorry about the role our equipment had in tragic wildfires, and we recognize our fundamental obligation to operate our system safely. We share the same objectives as the commission and other state leaders – namely in reducing the risk of wildfire in our communities, even in a rapidly changing environment.”
Noonan said PG&E has taken unprecedented actions to do so, but it recognizes that more must be done and remains committed to change. “PG&E accepts the [Rechtschaffen] decision and will work to implement the shareholder-funded system enhancements and corrective actions called for in the settlement,” he said.
Separately, the CPUC also unanimously agreed to extend the deadline to Nov. 8 for completing a multi-year investigation of the safety culture within the bankruptcy-bound PG&E utility. Dating back to 2015, the commission proceeding had identified a May 8 deadline this year for compilation of the examination, including a long-ago completed third-party report by NorthStar.
“PG&E’s bankruptcy proceedings have resulted in a delay in this proceeding as a number of issues overlap,” said CPUC President Marybel Betjar, who recommended the deadline extension.
The CPUC’s action drew loud cries from the utility consumer watchdog group, The Utility Reform Network (TURN), for going too easy on PG&E when its culpability in the 2017 and 2018 fires has been admitted to by the giant utility.
Although the overall penalty is nearly $2 billion and may exceed that total once some income tax issues are resolved, TURN Executive Director Mark Toney seized on the CPUC suspension of a $200 million fine, but that was only done because of a dispute over what source would be used to pay the fine and its potential for unraveling PG&E’s bankruptcy exit plans.
“The amount of the fine is supposed to reflect the seriousness of the conduct, not the whims of the wrongdoer,” Toney said. “PG&E has already pleaded guilty to manslaughter for 84 deaths [in the 2018 Camp Fire that destroyed Paradise, CA] caused by its conduct.”
Elsewhere within the CPUC on Thursday the regulators’ Wildfire Safety Division approved the state’s major utility wildfire mitigation plans for this coming fire season, including additional requirements that the utilities must implement in the weeks ahead.
The CPUC unit also has created a risk measurement tool for the utilities, Maturity Model, that can evaluate a utility’s risk mitigation efforts across 10 categories and 52 specific capabilities. “It will help identify a utility’s best practices and current strengths and weaknesses,” said CPUC spokesperson Julie Hall.
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