Fire mitigation plan includes prosecuting utility executives

Prompted by devastating wildfires throughout the state, two San Diego attorneys want lawmakers to amend utility regulations to ensure corporate responsibility, but industry experts say they doubt such a measure would be fruitful.

Michael J. Aguirre and Maria Severson, founding partners of Aguirre Severson LLP, recommended a new section be written into California Public Utilities Commission Code 8389 that would require principal executive officers of energy corporations to certify the truth of all representations made in their wildfire mitigation plans.

The point of the section -- Public Utilities Code 8389.5 -- would be to hold corporations accountable at a time when in the Governor, Legislature and regulatory officials have agreed to what Aguirre claims is a massive bailout of the utilities involved in wildfires.

The Legislature shouldn't focus on providing more money to pay fire victims, Aguirre said at a news conference Wednesday. Lawmakers should instead focus their efforts on stopping the fires altogether.

He referenced efforts by U.S. District Judge William Alsup of the Northern District to get Pacific Gas & Electric Co. to take mitigating steps to avoid causing fires. The judge ordered it to reinspect its grid and clear vegetation after learning that PG&E had falsified inspection reports. Alsup is overseeing PG&E's criminal probation from a 2010 pipeline explosion in San Bruno.

Aguirre said he hopes his proposal would be considered by the Legislature and even be added to existing laws like Assembly Bill 1054 and Senate Bill 901, "which would add more teeth" to existing provisions.

AB 1054, passed July 2019, weakened the prudent manager standard set for utilities, and created a $21.5 billion wildfire fund, $10.5 billion of which would be contributed by utility customers.

Senate Bill 901 expanded requirements for wildfire mitigation while lowering the threshold for private utilities to recoup from ratepayers fire-related liabilities by altering standards for reviewing such requests that occur after 2019.

Aguirre and Severson uncovered secret deals between PG&E and the California Public Utilities Commission over the San Bruno pipeline incident. The pair also represented ratepayer Ruth Henricks in her fight against San Diego Gas & Electric Co.'s efforts to socialize $379 million of uninsured costs from a trio of 2007 wildfires that the U.S. Supreme Court declined to hear last fall.

The pair is also challenging the constitutionality of AB 1054 in federal court.

The proposed code states that any person serving as a chief or principal executive officer of a major electric company operating in the state shall certify the company has fully implemented a fire mitigation plan approved by the CPUC. Violations of the order would result in criminal prosecution equal to a misdemeanor, and could be punishable by a fine of no more than $10,000 and/or a year in county jail, the proposal states.

A special team of county prosecutors from San Francisco and Los Angeles would be appointed by the presiding judge in the respective county to enforce Public Utilities Code 8389.5, according to the proposal.

In a statement, PG&E spokesperson Deanne Contreras said that PG&E already implemented a comprehensive wildfire safety plan in 2019 that enhanced additional safety precautions it began implementing in response to the 2017 and 2018 wildfires to address the growing threat of extreme weather and wildfires.

Contreras added PG&E continues to work on analyzing systems, refining procedures and minimizing impacts of a public safety power shut off.

Nossaman LLP partner Bradford B. Kuhn, who specializes in eminent domain, inverse condemnation and land-use law, said the Legislature seems satisfied with the existing wildfire legislation.

"Short of a potential state takeover of PG&E to ensure compliance, it seems unlikely this sort of legislation would be passed, which would place potential criminal penalties on executives," Kuhn said.

Mike S. Danko, partner at Redwood Shores-based Danko Meredith APC, said PG&E promised Alsup it would comply with a mitigation plan the utility drafted itself, but then didn't follow through.

"My concern is, if the Legislature would make it a law saying you must follow a wildfire risk mitigation program that you set forth, then we can't let utilities write their own programs," he said. "Essentially, we'd have to get the CPUC to write it for them."

PG&E has already proven to be unable to comply with their own safety rules, Danko said, which makes it unnecessary of having lawmakers dig deeper and come up with more rigorous rules.

"I do see a problem here: there are laws that are exceedingly lax and yet those aren't even being followed," said Danko. "PG&E has already said that it'd take eight to 10 years to follow some of the own laws."

The idea of holding individuals criminally accountable in the event disaster strikes and the company is found negligent is worth exploring, Danko said.

"We know from history utilities have a defense saying there is no management -- that's why there is no PG&E executive in jail and there won't be any," Danko said.