Judge Orders Utility’s New Leaders to Tour Paradise
By Hudson Sangree
PG&E Corp. came under criticism this week from a federal judge, who ordered its new CEO and board members to view the scene of the devastating Camp Fire.
Lawyers representing victims of that disaster and others urged a bankruptcy judge Wednesday to order the utility to turn over internal records related to wildfire liability.
And PG&E said May 2 it was being investigated by the Securities and Exchange Commission for its accounting of wildfire losses.
In short, it was another bad week for beleaguered PG&E and its utility subsidiary, Pacific Gas and Electric, which are undergoing Chapter 11 bankruptcy reorganization after devastating wildfires in the past two years. (See Calif. Must Limit Fire Liability, Governor Says.)
PG&E remains on probation for crimes associated with the San Bruno gas line explosion in 2010, which killed eight residents of a suburban San Francisco neighborhood.
In that case, U.S. District Court Judge William Alsup on Tuesday ordered PG&E’s board members to visit Paradise, Calif., where the Camp Fire killed at least 85 people and leveled most of the town of 27,000 residents in the Sierra Nevada foothills. Alsup said he wanted PG&E leaders to see the wreckage of the deadliest fire in state history.
Eleven of PG&E’s 13 directors are newly appointed, along with new CEO Bill Johnson, who started work May 2. (See Former FERC Commissioner Brownell Named PG&E Chair.)
In the bankruptcy case, lawyers for PG&E and those representing thousands of fire victims faced off for two hours Wednesday before U.S. Bankruptcy Judge Dennis Montali in San Francisco.
Attorneys for the creditor committee of tort claimants said they wanted information, which the utility refused to turn over, about the role of the utility and its contractors in starting the Camp Fire and the estimated cost, including any potential government fines that PG&E might have to pay.
The California Public Utilities Commissioned fined PG&E a record $1.6 billion after the San Bruno gas explosion, and plaintiffs’ lawyers said a similar fine could be imposed for the Camp Fire.
State fire officials haven’t concluded their investigation yet, but PG&E has said its equipment likely started the fire, which began beneath the 100-year-old Caribou-Palermo transmission line in rural Butte County on Nov. 8, 2018 — six months before Wednesday’s hearing.
Sounding exasperated, Montali told the lawyers to try to settle the dispute among themselves.
The judge is scheduled to rule soon on a petition by PG&E to enjoin FERC from interfering in the bankruptcy case. The commission recently reaffirmed its own ruling that it shares jurisdiction with the court over PG&E’s wholesale power purchase agreements. (See FERC Denies PG&E Rehearing Over Contracts Dispute.)
PG&E has indicated it may try to rescind or renegotiate hundreds of PPAs worth billions of dollars with generators of renewable energy, and it wants Montali to have sole authority over the contracts.