PG&E must comply with existing wildfire prevention rules and its own plans to combat wildfires, a federal judge ruled Tuesday — but the embattled utility avoided severe new regulations that the company said would have cost up to $150 billion to obey.
U.S. District Court Judge William Alsup did bar PG&E from issuing dividends to shareholders so the company can use the funds to reduce the risks of catastrophic wildfires by trimming trees and vegetation near electrical equipment and power lines, as well as for intensified inspections.
“It’s quite clear that PG&E over several years allowed the trees to grow out and not be removed as they should have been,” Alsup told the utility’s representatives, including Interim Chief Executive Officer John Simon and a battery of attorneys. “That was a major contributing factor, maybe the single biggest factor, for the fires in 2017 and 2018.”
The judge also suggested PG&E lately has placed a larger focus on pleasing shareholders than attending to public safety efforts.
“In recent years, PG&E has paid out billions in dividends and allowed the tree budget to wither,” the judge said in an afternoon court session in San Francisco. Over the course of 2016 and 2017, in the years prior to the most recent infernos, PG&E bestowed a total of $1.92 billion in dividends on its shareholders, the judge wrote in prior filings in the case.
PG&E equipment caused 17 fires that scorched the North Bay wine country and nearby regions in 2017. Although the official cause of the November 2018 Camp Fire has been not released by Cal Fire, PG&E has reported that it believes its equipment will be found responsible for the inferno that essentially destroyed the town of Paradise and killed 85 people. The utility was found not responsible for the October 2017 Tubbs Fire in Santa Rosa, which killed 22 people.
The decision by Alsup, which will be contained in a formal written order, requires PG&E to comply with existing state laws and to follow the proposals laid out in the company’s own wildfire prevention plans.
“We share the court’s commitment to safety and understand that we must play a leading role in reducing the risk of wildfire,” PG&E spokesman James Noonan said.
The judge’s ruling Tuesday occurred as part of a probation proceeding linked to PG&E’s conviction in 2016 for crimes it committed before and after a lethal gas pipeline explosion in San Bruno that killed eight people.
“We intend to fully comply with the law,” Reid Schar, a Chicago-based attorney for PG&E, told the court. Schar added, however, “Compliance with the law is a highly technical question.”
But the judge made it clear that he expected PG&E to strictly follow the state rules and its own plan.
“I’m not cutting you any slack with full compliance,” the judge told the utility.
In a separate federal proceeding, PG&E has filed for bankruptcy, listing $51.69 billion in debts, an insolvency ushered in by the company’s crumbling finances in the face of mounting liabilities and wildfire-related claims linked to blazes in 2015, 2017 and 2018 that roared through large swaths of Northern California.
The judge in prior court hearings and written filings had indicated that he might order PG&E to undertake a thorough inspection of its electricity grid and launch a wide-ranging vegetation management plan ahead of the upcoming 2019 fire season in Northern California.
PG&E claimed that rates could skyrocket five-fold under that strict plan, warning that it would need 650,000 new workers and be forced to spend $150 billion if it had to comply with the sweeping proposal.
Alsup expressed skepticism on Tuesday about PG&E’s assertions.
“I don’t really believe it,” the judge said of PG&E’s claims.
“This is a problem of your own making,” Alsup told PG&E’s chief executive and attorneys. “You have to undo this problem. You have to get square with the people of California and deliver power safely.”
After years of catastrophic fires, and with numerous wildfire victims still huddling in makeshift shelters, plenty is riding on whether PG&E is successful with its fire prevention efforts in 2019, the judge noted.
“I know I’ve been tough on your company,” Alsup said. “The truth is I want you to succeed. I want the people of California to be safe in their homes.”