PG&E CEO Blames Past Management for Problems, Promises Fixes

PG&E Corp. CEO Bill Johnson blamed negligence by the company’s past management for a cascade of catastrophes that killed nearly 140 people as he tried to persuade California regulators Tuesday that he is steering the utility to make safety its top priority.

Johnson, who was brought in to lead the company 10 months ago, delivered his remarks as the first witness in critical California Public Utilities Commission hearings that will help shape Pacific Gas & Electric as it tries to emerge from its second bankruptcy in less than 20 years.

“I think there has been a lack of accountability in the leadership to produce good safety results,” he declared during sworn testimony under questioning by a lawyer for a consumer group, The Utility Reform Network.

He couldn’t explain how the lack of accountability and organization happened because he said he couldn’t peer into “the hearts and minds of individuals when I wasn’t here.”

Johnson said about 80% of PG&E’s top executives are now gone and promised to continue to purge employees who didn’t emphasize safety above all else.

As part of PG&E’s new emphasis, Johnson said he will require executives to get out of the office more frequently “to get closer to the work and closer to the workers.”

As part of that process, Johnson said he hopes to break down PG&E’s sprawling service area serving 16 million customers into four or five regional divisions so the company can better address the diverse rural and metropolitan areas it serves.

Johnson said he will also demand more honesty from everyone in PG&E: “If you have something go wrong, don’t cover it up. Tell the truth.”

Johnson boiled down his mission to a simple goal: “No more disasters, no more catastrophes, no more fatalities.” PG&E achieved that objective last year when no one died in a fire caused by the utility in Sonoma County, although the company is still under investigation for the blaze that destroyed some homes and other structures.

To reduce the risk of triggering wildfires, PG&E deliberately turned off the power for as many as 2 million people during windy and hot conditions last October, leaving some customers without electricity for several days.

Even as Johnson boasted about the company’s progress under his leadership, both California Gov. Gavin Newsom and the head of the CPUC, PG&E’s chief regulator, have expressed serious doubts about whether the company has turned over a new leaf.

Both Newsom and CPUC President Marybel Batjer have demanded that PG&E replace its entire 14-member board, including Johnson, before it emerges from bankruptcy.

PG&E has promised to reshuffle its board, but hasn’t made any commitment to part ways with Johnson, who previously ran the Tennessee Valley Authority. PG&E Chairwoman Nora Mead Brownell is expected to be pressed about what the company intends to do about its board when she testifies at upcoming CPUC hearings.

The demands for a management shakeup come as PG&E scrambles to meet a June 30 deadline to win approval of its plan to get out of bankruptcy. Facing more than $50 billion in claimed losses from a series of deadly wildfires ignited by its outdated electrical equipment, the nation’s largest utility filed the case 13 months ago.

PG&E has agreed to settle claims with wildfire victims, insurers and a few government agencies for $25.5 billion to seek a federal judge’s approval of its bankruptcy blueprint. But the CPUC also must sign off on the plan to qualify for coverage from a state-created wildfire insurance fund.

The biggest chunk of PG&E’s bankruptcy settlements designates $13.5 billion to be divided among more than 81,000 victims of the recent wildfires. They include current and former residents of the Northern California town of Paradise that was nearly wiped out by a 2018 wildfire. Some of the victims worry their part of the settlement won’t cover all the losses from all the wildfires, an issue expected to be aired in a Wednesday court hearing.

Will Abrams, a victim of a 2017 wildfire, repeatedly asked Johnson whether he thinks PG&E is doing enough to help victims recover. In his most emotional moment during his testimony, Johnson told Abrams that he had been deeply affected by what he has seen in five trips to Paradise during his tenure.

“I am going to do everything I can to make this right,” Johnson promised.