PG&E, under siege after mass power shut-offs, stands its ground

PG&E Corp. admits it made big mistakes while cutting power to parts of more than 30 counties across California this month. But the perennially embattled San Francisco company does not regret shutting off hundreds of thousands of customer accounts.

In fact, despite deepening public resentment and mounting scrutiny from politicians and regulators, PG&E has remained firm in its conviction that its most extreme wildfire-prevention measure to date was necessary.

PG&E acknowledges that it communicated badly, most critically when its main website kept crashing, leaving customers scrambling for information about how they would be affected. The company has pledged to make a range of improvements to its power shut-off program, which is designed to prevent the kind of fires PG&E equipment started in 2017 and 2018.

Yet the bankrupt company insists it needed to halt electric service to a huge swath of the state to keep people safe.

CEO Bill Johnson said as much when he appeared before the California Public Utilities Commission on Friday at an emergency meeting the regulators called to address their serious concerns about PG&E’s recent mass blackouts.

Johnson said PG&E’s unprecedented decision to cut power in more than 30 counties “achieved its essential purpose.”

“We did not have any catastrophic fires in Northern and Central California, and that was the sole intent” of the power shut-off, he said. After the meeting, Johnson told reporters he thought the scope of the blackouts was appropriate given the weather conditions.

The only recent event PG&E appears to wish never happened at all is when executives on the gas side of the company courted top customers at a Sonoma County winery just before the shut-offs and on the second anniversary of the 2017 North Bay firestorm.

After the retreat, which was first reported by The Chronicle, Johnson apologized, calling it “insensitive, inappropriate, tone deaf.” The executive who ran the gas division at the time is no longer employed by PG&E.

“Aside from that, when it comes to the shut-offs themselves, the clear message is they’re going to do more of them,” said Mark Toney, executive director of The Utility Reform Network consumer group. “They’re going to keep doing it for as long as they lack confidence that they’ve done a good job with safety.”

The Public Utilities Commission approved new statewide rules for fire prevention outages in May, and it is working on crafting more. Commissioners also signed off on PG&E’s 2019 wildfire safety plan — which includes power shut-offs as one of its components.

Yet the commission voiced strong disapproval with PG&E’s blackouts this month and the company’s poor execution. Marybel Batjer, the new commission president, who started in August, summoned PG&E executives to the emergency meeting Friday.

Until the company improves its approach to power shut-offs, “there remains a substantial risk that the public health and safety of Californians will be severely impaired with potentially catastrophic results,” Batjer said at the meeting.

Later in the meeting, she told PG&E executives they had “failed on so many levels on pretty simple stuff.”

PG&E is planning improvements and will try to make shut-offs more limited over time — though they will likely remain necessary at some level for 10 years, according to Johnson.

The company has not backed down from its position that the weather warranted widespread shut-offs this month.

As proof it made the right call, PG&E has said crews found more than 100 instances of damage or hazards while inspecting the power lines the company had shut down. Examples included a “very large tree branch” that “fell through lines connected to a house” in Santa Clara County and a tree that fell across power lines in Santa Cruz County, according to a PG&E news release.

PG&E has also stressed the high winds it observed in its territory — an implicit rebuke to complaints from residents whose homes lost power despite calm weather. The company says wind gusts exceeded 40 mph in 22 counties and 50 mph in 15 counties. Speeds got as high as 77 mph in Sonoma County — which was hit the worst by the wildfires that ignited during a vicious windstorm two years ago.

“Shutting the power off goes against all of my training and experience,” Michael Lewis, PG&E’s senior vice president of electric operations, said at Friday’s utilities commission meeting. “With that said, it is my true belief that those actions prevented a catastrophic wildfire.”

The company has also repeatedly stressed that people far from dangerous weather could lose electricity if PG&E shuts off a line serving them that does run through somewhere experiencing high winds.

Still, Toney of TURN said he understands why people are skeptical and said PG&E should be more targeted going forward. He also wants the company to compensate people who lost money during the outages — and pay for it with funds reserved for shareholder profits.

“If they can simply shift all of the costs to everybody else, it’s like a ‘Get out of jail free’ card for them,” Toney said.

Aside from its power shut-offs problems, PG&E is still grappling with the fallout from wildfires it started in recent years — and the related liabilities that made it file for bankruptcy protection in January.

The bankruptcy case is approaching a milestone Monday, which is the deadline for all fire victims to submit a form asserting a claim against PG&E. Victims must submit the form by 5 p.m. regardless of whether they received payments from their insurance company or are part of a lawsuit filed against PG&E.

Attorneys representing a committee of fire victims filed court papers Friday asking U.S. Bankruptcy Judge Dennis Montali to extend the deadline. A hearing is scheduled for Nov. 13.

PG&E also faces the prospect that a group of bondholders could take control of the company if their restructuring proposal is successful. Montali recently allowed the bondholders and a committee of fire victims to move forward with their plan, which is competing against the company’s own proposal, and the two groups formally submitted it Thursday.