Judge Wants Bankrupt PG&E to Pay $44 Million Fine

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An administrative law judge has declared a $65 million regulatory deal with PG&E too lenient and is urging state regulators to impose $44 million in fines based on several years of regulatory violations.

Under the deal struck last year, the utility would pay $60 million for improvements to its 811 program, as well as a $5 million fine.  But in a filing, CPUC regulatory judge Peter Allen urges the commission to make the company pay $44 million in fines, along with $66 million in upgrades to the 811 program.

If adopted, Allen’s tentative ruling could be a sign that the state’s Public Utilities Commission will also reject a proposed $1.6 billion settlement – which carries no specific fines – for regulatory violations in the 2017 and 2018 wildfires.

In the  case of the 811 program, Allen stressed seeking more fines as a way to make the utility accountable for as many as 135,000 cases of workers filing false on-time reports when in fact they were late in responding to job sites to find buried gas and electrical lines.  

The judge also faulted the utility’s top management for failing to deal with the whistleblower complaint in 2016.

Separately, another whistleblower – Katherin Mack – alleged  that 811 gas locate crews were having to do the work of skilled electrical workers because the company wasn’t making sure those trained workers were on hand to assist.  

A total of five dig-in accidents have been tied to problems in the program, including one in 2014, when a San Jose city worker cut into an unmarked line that was mistaken for a tree root blocking a sewer line and suffered serious burns.

Just last year, regulators learned that the 811 location crew falsely reported being assisted by a qualified electrical worker in looking for buried lines before the dig-in in San Jose.

The judge again noted senior management knew about the issue, but failed to act.

Allen expressed skepticism for the basis of a deal that allowed PG&E to pay a $5 million fine and spend $60 million on what he suggested were vaguely defined upgrades.

The proposed penalty, he said, is “too low for the number, duration and severity of the violations, including PG&E management’s failure to correct the violations.”

And he questioned claims that PG&E couldn’t afford to pay fines due to its bankruptcy.

“It is not clear how the bankruptcy was factored into the calculation of the penalty,” Allen said in his ruling, “or how the penalty level in this proceeding is affected by the scale or process of the bankruptcy, and there is little or no detail about PG&E’s bankruptcy in the record of this proceeding.”

He concluded the “heavy reliance upon the financial resources of PG&E as a basis for the settlement is misplaced.”

PG&E says it will respond to the ruling before the deadline set in the judge’s decision.

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