United States

California Lawmaker Questions if PG&E Went Overboard With Power Outage Warnings

A key state lawmaker is calling on state regulators to more aggressively oversee PG&E’s unprecedented wildfire safety power shutoff that could impact as many as 2.5 million people.

“This is uncharted territory for us, and for PG&E,” said State Senator Jerry Hill, who has long charged that PG&E has not been aggressive enough in turning off power in advance of high winds, to protect against wildfires.

But as waves of massive power cuts ripple throughout the Bay Area, Hill says he is wondering whether the bankrupt utility has gone overboard.

“Has PG&E acted responsibly here, or are they just running scared? In trying to protect themselves from liability?”

Hill said he has drafted a letter, which he expects colleagues to sign with him, demanding the state Public Utilities Commission be more aggressive and conduct a root cause analysis of the shutdown effort this week.

“In their actions, we are putting a lot of people in harm’s way, we’re disrupting the economy tremendously for the next few days,” Hill said.

“It may not be necessary. It may be necessary. But we need to find that out because frankly, I don’t feel comfortable trusting PG&E to make this decision.”

State regulators said in a statement that they are already embedded, along with state fire and emergency operations officials, at PG&E’s operations center to make sure public safety is protected.

For its part, PG&E has admitted some problems, like its website repeatedly crashing due to unprecedented traffic. But it says high winds, low humidity and dry brush have combined to create the worst conditions for power line safety since the North Bay firestorm in 2017.

If that challenge wasn’t enough for the utility, a bankruptcy judge’s ruling Wednesday is expected to spark a battle over how the company will be governed.

U.S. Judge Dennis Montali’s ruling means a $25 billion bankruptcy restructuring plan backed by bondholders and wildfire victims will be permitted to go up against PG&E’s restructuring proposal, backed by insurance companies and hedge-fund investors.

Under the rival plan, wildfire victims and local agencies could get as much as $14.5 billion in compensation, far more than the $8.4 billion allowed for in PG&E’s current plan.

In both plans, fire-insurance companies would get $11 billion to pay out wildfire claims.

PG&E told Montali this week that the rival plan is unnecessary and could threaten progress it has made in settling claims with insurance companies and government agencies over fire costs.

And, there is the looming prospect that such a plan could trigger a costly battle over corporate governance, which PG&E suggested could be waged at the expense of wildfire victims.

Montali acknowledged control of the company may be at stake in allowing two plans to compete, leaving wildfire victims in limbo, but he said he would “not second-guess” the decision of wildfire litigants and bondholders to advocate for a rival plan.

Montali said competition might even drive a settlement in the massive case, a notion PG&E has rejected.

“If both plans pass muster,” the judge wrote, “the voters (authorized to represent creditors) will make their choice or leave the court with the task of picking one of them.”

Wildfire attorney Frank Pitre said Wednesday’s ruling could assure that victims would be paid as much as $6 billion more than PG&E currently promises.

And, he said, the bondholders backing the plan have promised change at the utility, with a more diverse governing board that includes ratepayer and safety advocates.

“They are talking about a completely new culture of management and governance,” Pitre said. “The beauty of what this judge is doing, is we are going to compete on who is best suited to run this company going forward, and how to best compensate the victims.

Contact Us