Regulators Approve $1.9 Billion Settlement With PG&E, But Back Off on Major Fine

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The state Public Utilities Commission on Thursday approved a $1.9 billion settlement with PG&E that allows it to get credit for wildfire prevention spending while at the same time escape being fined $200 million over regulatory violations stemming from two years of massive wildfires. 

The unanimous vote came after PG&E challenged the findings of a regulatory judge who urged that the company be fined on top of having to pay a total of $1.9 billion in improvements and upgrades. 

In advocating for the no-fine deal, Commissioner Clifford Rechtschaffen reminded his colleagues about the devastation associated with 15 fires tied to the utility’s equipment in 2017 and 2018. “For the victims of the fire … the damage, the pain and the trauma is ongoing,” he said.

And he scolded the utility for what he said was the “strident” approach to its appeal of the regulatory judge’s findings, saying he was “deeply” disappointed that the company continues to assert it’s not responsible for the Camp Fire that destroyed the town of Paradise.

“These protests were particularly disingenuous,” he said, “given that among other things, PG&E at the same time was pleading guilty to 84 counts of involuntary manslaughter” in the Camp Fire. Prosecutors in Butte County say the case amounts to reckless arson and the company faces $3 million in criminal fines. 

The approval left PG&E critics frustrated and angry – they say the vote shows the utility was able to take advantage of its bankruptcy plight.

“The CPUC got this completely wrong by letting PG&E off the hook,” said Mark Toney, Executive Director of the ratepayer advocacy group TURN. “We have not seen them be a new company, so there is no justification for them to suspend this $200 million penalty. They should pay it – or be made to pay.” 

Under the deal, stockholders will have to cover the $1.8 billion wildfire inspection and repair costs and pay more than $100 million in system upgrades. The company will have to return as much as $400 million it may reap in tax savings associated with those expenditures.

But ratepayer attorney, Thomas Del Monte, says the utility would have been on the hook for those costs anyway, because its equipment started the fires. 

“It’s a sweetheart deal for PG&E. They got exactly what they wanted -- which is limited accountability and being able to move on.”

The company had no immediate comment on the commission’s action, but did reissue a statement from March that said in part, “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. While we have taken unprecedented actions to do so, we recognize that more must be done and remain committed to change.”

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