US Judge Finds PG&E Violated Criminal Probation

Andrew Cummings
January 31, 2019

Faced with potentially ruinous lawsuits over California's recent wildfires, Pacific Gas & Electric Corp. filed for bankruptcy protection Tuesday in a move that could lead to higher bills for customers of the nation's biggest utility and reduce the size of any payouts to fire victims. "What do we do? Kill more people by starting more fires'".

These promises will likely come up in a Wednesday hearing where the federal court judge overseeing PG&E's criminal probation for its role in causing the deadly 2010 San Bruno pipeline explosion will consider ordering PG&E to reinspect, fix and clear vegetation from the entirety of its 106,000 miles of transmission and distribution grid by the start of summer this year.

He is considering imposing major new conditions as part of PG&E's probation to try to prevent the utility's equipment from causing more wildfires.

An attorney for PG&E, Reid Shar, said the company was not offering platitudes when it said safety was its No. 1 goal.

Brinkley said it's up to the Newsom administration to decide whether California will take on the responsibility, but it will be "hard to imagine" the state deciding to allow PG&E to continue to provide a service.

PG&E announced past year that it would cut off power preemptively when fire danger was high and did so for the first time in October for about 60,000 customers in Northern California. The judge later apologized for those comments but still questioned how so many fires broke out under the CPUC's watch. The legislation did not affect potential liabilities for 2018 wildfires.

Legal experts say the bankruptcy will likely take years to resolve and will result in higher rates for PG&E customers.

"I'm just not there to do that, to make that change, and to shift the risk to the taxpayers at this point in time", he said.

Some lawmakers mirrored Alsup's frustrations that regulators work too slowly. "This is the type of thing we're going to see a lot more, unfortunately, because of climate change", MacWilliams said.

"It shows PG&E does not actually have the best interests of the wildfire victims in mind", she said.

"I don't think that we are prepared in any way here in the state of California for the enormity of what we're seeing", he said.

State officials are investigating whether the utility's equipment sparked the deadliest, most destructive wildfire in California history, the Camp Fire, which killed at least 86 people and burned down 15,000 homes in Paradise and surrounding Northern California communities in November.

The Chapter 11 filing allows PG&E to continue operating while it puts its finances in order. PG&E said it intends to pay suppliers in full under normal terms for goods and services provided on or after the filing date of January 29, 2019.

PG&E said Tuesday it was seeking approval for a $5.5 billion debtor-in-possession financing agreement.

These liabilities dwarf PG&E's roughly $1.5 billion in liability insurance coverage, and are almost seven times its current market capitalization of $7.5 billion as of Tuesday morning.

PG&E is facing hundreds of lawsuits from victims of wildfires in 2017 and 2018, including the nation's deadliest wildfire in a century.

PG&E crew work to fix damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018.

PG&E works on power lines to fix damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018.

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