US Judge Suggests Blocking PG&E Stock Dividends - NBC Bay Area
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US Judge Suggests Blocking PG&E Stock Dividends

SF judge also scales back his proposals for preventing the utility's equipment from sparking fires

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    US Judge Suggests Blocking PG&E Stock Dividends
    Justin Sullivan/Getty Images
    A Pacific Gas and Electric (PG&E) truck sits parked on a street on June 18, 2018 in San Francisco, California.

    A federal judge overseeing PG&E’s criminal probation for the San Bruno explosion, suggested this week the bankrupt utility should be barred from handing out stock dividends until it fulfills all its recent wildfire safety promises.

    However, the judge stopped short of ordering PG&E to shut off power in any area where it can’t guarantee it has fully inspected all of its equipment.

    In January, Judge William Alsup, angry about wildfires started by PG&E equipment, proposed mass inspections of PG&E’s power system and localized power shutoffs in any areas still vulnerable to wildfire in high winds.

    At a hearing in January, Alsup appeared openly frustrated when the company resisted his proposed wildfire safety measures. In a ruling Tuesday, the judge acknowledged having heard PG&E's argument that his plan would be "unduly expensive, require superhuman efforts, and exceed the requirements of state and federal law."

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    Bankrupt Pacific Gas & Electric Corp. inched closer to taking responsibility for the deadliest U.S. wildfire in a century, saying Thursday it is "probable" that one of its transmission lines sparked the blaze last year that killed 86 people and destroyed most of the city of Paradise. Anoushah Rasta reports.

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    Putting the power shutoff issue aside for a moment, Alsup now is pressing for the company to "fully comply" with existing vegetation clearance standards. PG&E has not been able to say it meets those standards, citing the size and complexity of its power grid.

    Calling the company’s wildfire safety record "dismal," Alsup offered a seemingly sarcastic retort to the utility’s arguments, saying, "If state or federal law is too strict, moreover, PG&E’s remedy would be to seek the relaxation of such laws through its well-oiled lobbying efforts."

    The judge’s current plan calls for a federal monitor to oversee whether the company is meeting all the provisions of its recently announced wildfire safety plan. The company has warned that plan could mean significant power shutoffs to large populations to avoid fire in high winds.

    In the meantime, Alsup suggested halting stock dividends until the company’s wildfire safety plan is fully implemented. While such dividends are not likely during the utility’s ongoing bankruptcy, they are possible. Alsup noted that while the company stopped issuing dividends after the October 2017 wildfires, some $2 billion has been handed out to stockholders since 2016.

    The judge continued: "Yet, during this same period, PG&E knowingly failed to trim or remove thousands of trees it had already identified as posing a hazard. These dividends could and should have been kept and used to bring PG&E into compliance with state and federal law with respect to what has become the number one cause of PG&E induced wildfires."

    Barring future dividends, the judge said, would help ensure "funds are adequately allocated to PG&E’s vegetation management and wildfire mitigation costs."

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    (Published Tuesday, Feb. 12, 2019)

    In a statement, the company said it "shares the court’s commitment to safety and agrees that we must all continue to work together with urgency to address the risk of wildfire throughout Northern and Central California."

    The company says it is working on its wildfire "measures we are taking to help keep our customers and communities safe. We continue to work with regulators, lawmakers and our community partners across all sectors and disciplines to develop comprehensive, long-term safety solutions for our state."

    Utility executives say the company will respond to the court’s latest order "within the time frame requested."

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