‘Sometimes things just break’: PG&E CEO grilled by fire victim

A 2017 wildfire survivor grilled PG&E Corp.’s top executive for about two hours at a public hearing on Tuesday, asking tough questions about the company’s commitment to safety, its plan to exit bankruptcy protection and its role in past disasters.

The encounter between CEO Bill Johnson and Will Abrams, who lost his Santa Rosa home in the Tubbs Fire, took place on the first day of state regulators’ San Francisco hearings about PG&E’s emergence from bankruptcy.

It was a remarkable and likely unprecedented formal exchange between the highest-ranking official at the parent company of California’s largest power provider and a person who lost a home in one of the most destructive wildfires in state history.

At the conclusion of the sometimes tense questioning, Johnson revealed a little more about his secretive trip to Butte County last summer.

Under the orders of a federal judge, Johnson and other PG&E leaders in July toured the destruction caused by the Camp Fire, which was ignited by one of the company’s power lines in November 2018.

Johnson said he heard tapes of 911 calls from the day the fire ignited. He also saw videos and “looked at remains,” he said. He has been to the area several other times.

“So if you think I am unaffected by this … you are wrong. This has affected me deeply,” Johnson told Abrams. “I’m going to do everything I can to make this right.”

Abrams responded skeptically.

“I hope that compassion that you just showed translates into the actions of PG&E,” he said.

PG&E is trying to get its bankruptcy exit plan approved in court and by regulators at the California Public Utilities Commission by June 30. The company must meet that deadline to qualify for funding that will help pay costs from future major fires.

The commission’s hearings are a crucial step in that process, allowing various parties to get answers directly from PG&E on the record before regulators act.

Commission officials have allowed Abrams to formally participate in the proceedings. And though the state said PG&E was not responsible for the Tubbs Fire, the company nonetheless agreed to pay victims of the fire in order to avoid a trial about the disaster.

During the hearing, Abrams asked Johnson a pointed question about the company’s plan to finance payments to fire victims partially with equity. A $13.5 billion settlement between PG&E and fire victims’ lawyers would establish a trust that would be set up through a mix of cash and stock, which the trust’s administrator would cash out over time.

Abrams said it wasn’t a fair arrangement. But Johnson said fairness is “often in the eye of the beholder” and he cannot “make the rules in the bankruptcy courts of the United States.”

Johnson also said he was not directly involved in the settlement crafted by lawyers and financial professionals.

“I understand exactly what you’re saying,” Johnson said. “I’m going to do everything I can to make that stock valuable, but I can’t fix this issue. I just can’t — I don’t have the power to do it.”

Elsewhere during the questioning, the CEO said PG&E can’t blame all its wildfire problems exclusively on climate change. He conceded that PG&E’s own actions have a role, too.

“It’s not just external. We have a piece of this,” Johnson said at the hearing. “But it’s definitely both of those that are causing this.”

Yet Johnson later said PG&E can’t prevent all risks in its electrical system, which stretches across 70,000 square miles from Eureka to Bakersfield.

The issue arose in the context of PG&E’s possible role in last year’s Kincade Fire, which charred about 77,800 acres and destroyed 374 buildings northeast of Geyserville. California officials are still investigating the cause of that fire, but PG&E has said one of its high-voltage power lines broke at about the time and place the blaze began.

Johnson stressed that the cause has not been determined, but also said PG&E can’t necessarily prevent all problems with its equipment.

“Sometimes things just break,” he said.

The transmission tower in question was inspected “a number of times” over the last two years by highly qualified electrical workers, who found it to be “fit for purpose,” Johnson said.

A spokesman for the California Department of Forestry and Fire Protection said the agency is still investigating the cause of the Kincade Fire and did not have a timeline for when that work would conclude.

Earlier in the hearing, Johnson was questioned by Tom Long, an attorney for The Utility Reform Network consumer group.

Johnson told Long that he thought PG&E’s frontline supervisors have historically not “always felt that safety is their first job” — a shortcoming he wants the company to change.

The CEO also talked more about PG&E’s plan to make its operations more regionally focused when it emerges from bankruptcy. PG&E will likely set up four or five regional operating units, but the company is still deciding exactly how to divvy them up, Johnson said.

Yet the exchange with Abrams loomed largest on Tuesday. After the hearing, Johnson told reporters that he was “totally sympathetic and empathetic to (Abrams’) point.”

“But I think he’s asking us and me to do things that we cannot do,” Johnson said. “I can’t admit to things that we didn’t do. I can’t change the rules of the Bankruptcy Court.”

Johnson said he wants to run the company better so that its stock price rises enough after bankruptcy to pay Abrams and other victims like him.

Abrams told The Chronicle he was disappointed in how the hearing played out.

“Legal definitions for what is fair and what is a good citizen is a very low bar,” he said in an interview. “People and corporations and governments need to hold themselves to a higher standard, and I did not hear that presented in what Bill Johnson said today.”