Late last month the CEO for bankruptcy mired Pacific Gas and Electric Co.(PG&E) told skeptical state regulators that the giant combination utility must make extensive fundamental changes in how it operates and its Chapter 11 reorganization plan is focused on that long-sought transformation.
Former head of the federal government’s Tennessee Valley Authority (TVA), Bill Johnson after less than a year heading the beleaguered San Francisco-based utility told the California Public Utilities Commission (CPUC) that PG&E is preparing to change fundamentally all of the major ways it operates including its approach to wildfire risk and the safety of its natural gas and electric systems.
On the opening day of a CPUC proceeding examining PG&E’s Chapter 11 exit plan, Johnson acknowledged that the utility has fallen short in many critical areas, including communications with its stakeholders, management of its asset base, understanding risk and being responsive to customers.
“We need to change quickly and efficiently, particularly in terms of risk and safety,” Johnson said. “We moved too far from our customers, and we recognize the cornerstone of future success requires focusing on [them].”
PG&E for the first time has created senior chief executive positions for risk and safety among a whole new senior management team, along with a totally revised board of directors.
Under the state’s wildfire relief law, Assembly Bill (AB) 1054, PG&E needs state and federal bankruptcy court approval of its reorganization plan by June to be eligible to obtain billions of dollars of state-provided funding to help pay wildfire claims approaching $30 billion.
Gov. Gavin Newsom and his appointee last year to head the CPUC Marybel Batjer, who has extensive state government but no energy-related experience, continue to publicly criticize PG&E and its reorganization plan for not going far enough in transforming the utility company’s culture and in gaining public confidence that it can reduce the risk of horrific-scale wildfires caused in many cases by its utility infrastructure.
Earlier this year, Batjer told a state legislative committee that she was highly critical of some of the investor-owned utilities, particularly PG&E, regarding the wildfires and the preventive power shutoffs that have rankled many customers. She told lawmakers that the public safety power shutoffs (PSPS) should be a “measure of last resort.”
Critics are now arguing that billions of dollars of economic activity could be lost in the midst of PSPSs when they are applied to broad areas, and the combined solar/battery storage providers in the state indicate that demand for their systems is growing, particularly among businesses, as a way to minimize the damage from the safety blackouts.
Last Monday attorneys for PG&E answered a federal district court judge in San Francisco who has been equally skeptical of the utility response to the wildfires, providing details on the PG&E vegetation management program that is crucial to lowering wildfire risks.
Judge William Alsup, who is overseeing the utility company’s five-year probation from a criminal court conviction in 2016 stemming from the fatal 2010 San Bruno, CA, gas transmission pipeline rupture and explosion, has sought to get more tree-trimmers hired by the utility as a fire mitigation step.
PG&E’s attorneys reported to the court that more trimmers would not be possible for most of this year because it was unnecessary and “financially unsustainable”
Separately, last Wednesday PG&E spokesperson Melissa Subbotin said the utility “welcomes the opportunity the court and Judge Alsup are providing “to continue our ongoing dialogue.” Subbotin said the work being done on wildfires is “strengthening infrastructure and reducing risk.”
Along with the federal court in San Francisco, she said PG&E is working closely with regulators, lawmakers, the utility’s federal monitor and other stakeholders.
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