PG&E appeals new probation conditions, asserting they’ll ‘undermine wildfire safety’

Dive Brief:

  • Pacific Gas & Electric (PG&E) is appealing a new set of wildfire mitigation requirements imposed by a federal judge, arguing that the conditions would cause the utility irreparable harm and “are more likely to undermine wildfire safety” than they are to promote it.
  • U.S. District Judge William Alsup, who is supervising PG&E’s five-year criminal probation, agreed to place a stay on the conditions that he had ordered PG&E to follow, which included hiring a cadre of in-house inspectors to make sure trees and vegetation that could cause fires are not growing too close to its power lines.
  • Alsup has scheduled a telephonic hearing on PG&E’s motion for May 28, and asked the U.S. government to weigh in on the issue by May 21.

    Dive Insight:

    Alsup is in charge of the criminal probation placed over PG&E in the wake of a natural gas pipeline explosion that took place a decade ago.

    In late April, the judge issued an order criticizing PG&E’s programs to trim trees and branches that are potential fire risks in its service territory, and creating new conditions as part of its probation. These included requiring the utility to hire its own vegetation inspectors rather than outsourcing the work, identify the age of all the pieces of equipment on its entire transmission system, craft a new system for inspecting transmission infrastructure, and require contractors that inspect its lines to “carry insurance sufficient to cover losses suffered by the public should their inspections be deficient and thereby start a wildfire.”

    But PG&E last week appealed that order in the Ninth Circuit Court of Appeals, requested permission to file a motion for reconsideration of the new conditions, and asked Alsup to stay them in the meantime. According to PG&E, the requirements will “result in irreparable harm” to both the utility and the public, since implementing them would necessitate diverting resources from the wildfire safety plan approved by the California Public Utilities Commission (CPUC).

    “Probation conditions are not an appropriate method for setting regulatory policy in a complex and developing field that has been occupied by the state,” the utility said in its filing, adding that the court does not have the technical expertise or legislative mandate to enact such sweeping changes.

    According to PG&E, any inspectors that it hires would have to come from an existing pool of its contract workers, since there is no other workforce with the necessary skills. It also pushed back on the notion that designing a new inspection system would improve the safety of its infrastructure, and said the requirement to identify the age of all its equipment “imposes an enormous burden on PG&E without any measurable benefit.”

    Requiring contractors to insure themselves against possible wildfires would not be possible, the utility added, because “the market does not offer the tens of billions of dollars’ worth of insurance the order would necessitate.” The utility in 2019 had tried to buy $630 million of new wildfire liability coverage but was only able to get $50 million of that plus $140 million in non-fire coverage, despite trying out 65 different markets — and that too, with a $48 million premium.

    “California has recognized that traditional insurance is no longer a viable solution for insuring wildfire liability; as a result, it set up a non-market-based Wildfire Fund to provide compensation for victims of wildfires caused by igniting transmission lines,” the utility said.

    It will be difficult to hire contractors if they are required to take on the full liability of a wildfire, Steven Weissman, former administrative law judge at the CPUC and a lecturer at the University of California, Berkeley’s Goldman School of Public Policy, told Utility Dive.

    On the other hand, “what a federal judge brings into the conversation is an ability to be free of political consequence,” he said. “[B]ecause these commissioners live in a political environment, there may be instances where regulators are going to put less than the most comprehensive solution in place, because they have these various pressures.”

    “It is no surprise that Judge Alsup is concerned about PG&E’s failure to meet the conditions of its probation and continued criminal behavior. It’s also no surprise that PG&E has an excuse for why it can’t do what the judge ordered. If PG&E were a person, the judge would surely have thrown them in jail by now,” Mindy Spatt, communications chief with The Utility Reform Network, told Utility Dive in an email