Sensitive to growing regulatory and legal pressures, the PG&E Corp. board has unveiled an initiative to boost the parent company and the structure and safety performance of utility Pacific Gas and Electric Co. (PG&E).
The board also plans an overhaul as the financial position dwindles. The corporation’s stock price on Monday fell 22.38% ($5.46/share) to end the day at $18.94/share.
Rumors are also swirling regarding a potential bankruptcy or a complete sell off of the gas utility unit.
Height Securities LLC on Monday suggested that a bankruptcy could benefit the company in the long run. However, analysts said the California legislature could help relieve pressure by extending last year’s utility wildfire bill (Senate Bill 901) to include the 2018 wildfires as well as those experienced in 2017.
California regulators last November ordered PG&E to implement improvements to the safety culture, and Attorney General Xavier Becerra last month also told a federal district court that PG&E could face criminal charges, including murder, if it’s determined that the utility recklessly operated equipment that caused the deadly wildfires the last two years.
Separately, the California Public Utilities Commission (CPUC) recently said alternatives for PG&E need to be evaluated this year, citing a continuous stream of safety problems including the San Bruno transmission pipeline disaster in 2008.
The PG&E board appears to be mirroring the CPUC’s internal examination of the companies with its latest commitment to “refresh” the holding company and utility boards to provide new perspectives. It also is considering “structural options” that can best position PG&E to make needed changes while meeting customer and operational needs.
In addition, the board plans to establish a special committee to work with independent experts to advise on best practices for wildfire safety.
The 12-member board reiterated that its members “fully understand” PG&E’s responsibility to its customers, communities and stakeholders to drive safety and operational excellence. “That is why we are redoubling our ongoing wildfire safety efforts and are looking at every possible action PG&E can take to improve.”
The board said it is committed to working closely with the CPUC, policymakers, and other stakeholders. PG&E spokesperson James Noonan said the board’s process is “well underway,” but there is no set timeline for completing the changes. It hasn’t been decided whether the board membership will be expanded or some existing directors will be replaced. “No options have been ruled out,” Noonan said.
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