Five More Years of Oversight for PG&E, at Shareholder Expense

By Published On: August 5, 2021

The California Public Utilities Commission unanimously voted to require Pacific Gas & Electric shareholders, not ratepayers, to pay $25 million over five years for an independent state safety monitor. It won’t be the first time the company has had such a watchdog, but questions about the extent of oversight and who would pay for it were heated.

Next February, the new monitor will replace a federal one appointed during the criminal proceedings over PG&E’s San Bruno gas explosion. Federal Judge William Alsup increased the oversight after the utility ignited wildfires in 2017-18 and was found deficient in clearing vegetation near power lines.

PG&E agreed to keep the safety monitor as part of last year’s bankruptcy reorganization caused by massive wildfire litigation. But it contested the proposal to have its shareholders bear the $5 million annual cost.

Right before the 5-0 vote, CPUC President Marybel Bather announced that the currently burning Dixie Fire had destroyed the small town of Greenville. PG&E had admitted that there’s good reason to think its equipment may have caused that fire, as well as the Fly Fire that merged with it.  The massive Dixie Fire had spread to more than 322,500 acres as of Aug. 5 because of high winds and dry conditions.

“We have to readdress how we address wildfire mitigation going forward,” Commissioner Darcy Houck stressed.

CPUC Executive Director Rachel Peterson highlighted other actions the commission has taken to improve the safety of PG&E’s electric and gas operations and culture. It increased its enforcement last April after finding the utility was not properly clearing trees and other plants around its equipment. It directed PG&E to improve the reports it issues after safety shutoffs. It also ordered the utility to develop an app that allows customers to report equipment failures or dangers, such as downed lines. In addition, on Aug. 25, the CPUC will vote on whether to renew the utility’s safety certification, which is a condition of operating. Local clean power advocates have been urging the commission to let PG&E go out of business and replace it with public local power.

Watchdog in real time

The safety monitor keeps tabs on how well PG&E’s work is meeting its stated priorities, demonstrating “utmost safety in execution,” according to the resolution. The monitor oversees the utility’s wildfire mitigation plan, its public safety shutoff practices, safety culture assessments, and risk mitigation.

The CPUC chief will choose the monitor. He or she will work for and with the commission and report monthly on PG&E safety. Ratepayer advocates insisted PG&E should have no say in the choice of a monitor.

The resolution forbids the monitor from “holding a direct financial interest in PG&E” and says the person is subject to conflict-of-interest rules.

PG&E wanted the oversight to last no more than three years. This was rejected.

The resolution agrees with The Utility Reform Network and Cal Advocates that PG&E’s “record of prior safety lapses warrant a period of five years, matching the length of the Federal Monitor’s term.”

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