Pacific Gas & Electric, which filed for Chapter 11 bankruptcy protection this week and faces the threat of being broken up by California regulators, now has an additional worry: satisfying the “zero fires” goals of the federal judge overseeing its criminal probation.
On Wednesday, U.S. District Court Judge William Alsup, who oversees PG&E’s criminal probation for its role in the 2010 San Bruno natural-gas pipeline disaster, found the utility in violation of its probation agreement, due to a failure to report its out-of-court $1.5 million settlement with Butte County over its role in the 2017 Honey Fire.
It’s a relatively minor violation, compared to the billions in potential liabilities that PG&E says it faces from its role in starting some of the state’s deadliest wildfires in 2017 and 2018.
But the remedy being proposed by Alsup is an extreme one: to inspect and clear vegetation from every mile of PG&E’s power grid by the start of this year’s fire season in July, or be forced to turn off power to large portions of the grid when weather, wind, temperatures and local vegetation conditions add up to high fire risk.
Alsup did not make a final decision on this proposal on Wednesday, and did not set a date for the sentencing hearing that would put any final decision into effect. PG&E and state regulators have objected to his plan, saying it exceeds the court’s authority, interferes with existing federal and state regulators, and would be impossible to carry out. What's more, PG&E’s bankruptcy will complicate how the utility can fund its existing wildfire prevention efforts, let alone a massive new court-imposed mandate.
Even so, Alsup blasted PG&E for what he described as its willful neglect of its responsibility to prevent its equipment from causing fires. “Usually a criminal on probation is forthcoming and admits what they need to admit,” he said during Wednesday’s hearing in San Francisco. “You haven’t admitted much…but to my mind, there is one very clear cut pattern here — that PG&E is starting these fires.”
Investigators with the California Department of Forestry and Fire Protection this week cleared PG&E of responsibility for starting the 2017 Tubbs Fire, which caused an estimated $15 billion in damages. But Cal Fire has also found PG&E equipment at fault for starting 17 fires that killed at least 15 people and razed over 5,000 homes in the fall of 2017, including 12 cases where the utility was allegedly in violation of safety or maintenance procedures.
PG&E is also being investigated for its potential role in starting the Nov. 2018 Camp Fire, which killed 89 people, destroyed the town of Paradise, Calif., and caused an estimated $16 billion in damages. While the investigation is still ongoing, a PG&E transmission line equipment failure has been linked to the start of the fire, and the utility has been faulted for not de-energizing its system in the days and hours leading up to the fire.
Alsup said that his role as the judge overseeing PG&E’s criminal probation forced him into taking some sort of action. “Does the judge just turn a blind eye and say, 'PG&E, continue your business as usual, kill more people by starting more fires?' I know it’s not quite that simple, because we have to have electricity in this state. But can’t we have electricity that’s delivered safely in this state?”
Alsup’s proposed remedy may be impossible to implement, however, according to PG&E and supporting court testimony from labor unions. In a court filing last week, PG&E estimated it would cost between $75 billion and $150 billion to inspect its entire system as the judge has proposed.
Even if the money could be raised, it would require about 600,000 experienced tree-trimming workers —and “there aren’t enough qualified personnel in the country” to meet that need, PG&E attorney Kevin Orsini said at Wednesday’s hearing.
PG&E laid out several other objections to Alsup’s proposal in a court filing. First, it argued that it’s not “reasonably related” to the underlying criminal conviction the judge is overseeing. In 2016 the utility was found guilty of six felonies, including federal pipeline safety standard violations and obstructing a federal investigation by falsifying documents. PG&E’s penalty included a $3 million fine and 10,000 hours of community service, and five years’ probation, overseen by a federal monitor to oversee its natural gas operations. But after the deadly Northern California fires of October 2017, the court added oversight of the utility’s electric grid to its purview.
Second, PG&E protested that Alsup’s order would conflict with the role of the Federal Energy Regulatory Commission and the California Public Utilities Commission in regulating transmission and distribution systems, respectively. The CPUC agreed, telling the judge in a filing this week that his proposed order “will in all likelihood conflict with and frustrate the extensive federal statutory and state Constitutional and statutory regulatory scheme,” and could pre-empt PG&E’s existing spending on fire prevention efforts.
The CPUC also questioned Alsup’s blanket approach to powering down the grid to prevent fires, saying that “de-energization can leave communities and essential facilities without power, which brings its own risks and hardships, particularly for vulnerable communities.”