Critics say utility commission went easy on PG&E

Consumers and ratepayers are blasting Pacific Gas & Electricity and utility regulators for a punishment they claim is too lenient for the repeat offender blamed for major Northern California wildfires through mismanagement of its facilities.

In an attempt to avoid derailing its bankruptcy plans, PG&E is objecting to the newly increased $2.137 billion penalty levied by an administrative law judge in February in its safety culture proceedings, which began last June.

Utility spokesperson Lynsey Paulo said Friday PG&E urged the commission to adopt the utility's proposed settlement fine, which "includes the highest dollar amount in the history of the commission for a wildfire-related violation," and reject the increased penalty.

Intervenors April Sommer, legal director of the Wild Tree Foundation, and Walnut Creek-based attorney Thomas Del Monte are fighting back, questioning whether the California Public Utilities Commission is neutral. PG&E must exit bankruptcy by June 30 to access a $21.5 billion wildfire fund to offset future wildfire liabilities. The commission seems most focused on helping the utility meet that goal, the intervenors said.

Terrie D. Prosper, a utility commission spokesman, could not be reached for comment Friday.

Consumers also objected to what they called Commissioner Clifford Rechtschaffen's attempt to get rid of extra fines against PG&E and his fight to have PG&E reap tax benefits from its penalties, which they claim doesn't constitute as much of a punishment.

PG&E and its labor unions struck a settlement with the commission's safety enforcement division in December 2019, six months after the commission opened an investigation into PG&E's practices linked with the 2017 and 2018 fires. The division found 45 violations. The state Department of Forestry and Fire Protection determined PG&E's equipment ignited more than a dozen fires.

The deal was to have PG&E shareholders pay $1.67 billion in financial obligations, which was nearly doubled to $2.137 billion in February by administrative law judge Sophia J. Park, who presided over the proceedings.

Park's modifications include $1.82 billion in disallowances for wildfire-related expenditures, $114 million in system enhancement initiatives, and an extra $200 million in fines payable to the commission's general fund.

PG&E appealed Park's decision, warning the extra fines would jeopardize its bankruptcy proceedings and dissuade investors as PG&E was trying to raise $57 billion from its Chapter 11 exit. The extra fines would force PG&E to pay $25.5 billion to wildfire victims, the utility argued. PG&E was supported by Rechtschaffen, who requested a review last month of the modified terms and asked his colleagues to get rid of the $200 million fine because it would go to the commission and not necessarily to the wildfire victims.

Del Monte and Sommer are joined by attorneys Michael J. Aguirre and Maria C. Severson, managing partners of Aguirre & Severson, who filed their objections Thursday to Rechtschaffen's requests. Aguirre and Severson, who represent PG&E ratepayers Alex Cannara and Gene Nelson, argued PG&E's punishment should also include investigating corporate executives and holding them individually responsible.

Aguirre contends Rechtschaffen's request displays a codependent relationship that undermines the commission's investigative process. Aguirre, one of PG&E's biggest critics and a challenger to the wildfire mitigation fund, called for criminal penalties against utility officers who misrepresent PG&E's fire mitigation plans.

Del Monte, who is representing himself in the proceedings as a PG&E ratepayer, contends the $2.137 billion fine isn't even much of a fine. While PG&E cannot recover any money from the public to fix its equipment and safety systems, the utility wouldn't have been entitled to do so anyway because the Public Utilities Code only allows it if it was a prudent manager of its equipment.

"It's been a frustrating experience having the CPUC working against you when they're supposed to regulate," he said. "Who's watching over the watchdog?"

The matter has been calendared on CPUC's consent agenda for April 16.