PG&E acknowledges ‘process breakdown’ in checking high-risk fire areas

Operational delays caused Pacific Gas & Electric's failure to perform inspections on transmission towers in the highest fire-threat areas, the utility told a federal judge Tuesday in a court filing.

"This was a process breakdown," PG&E attorney Reid Schar wrote. "That decision did not align with PG&E's intent to prioritize work in a risk-informed manner, and PG&E is examining the episode to learn from it."

PG&E spokesman James Noonan said in a statement that the company "recognizes that we must take a leading role in reducing the risk of wildfire through Northern and Central California."

"Today, we provided additional context about the work reviewed by the monitor team and clarified some of the findings highlighted in the team's earlier assessment," the statement read. "We also emphasized that we share the court and monitor's focus on safety and agreed that there are some areas in which we can, and should, do more to further this shared aim of safety."

The report was made in response to a demand for an explanation by U.S. District Judge William Alsup, who oversees the utility's criminal probation stemming from the 2010 San Bruno pipeline explosion, over findings that PG&E prioritized reaching inspection targets instead of meaningfully trying to mitigate wildfire risk.

Court-appointed monitor Mark Filip of Kirkland & Ellis reported that "improvement appears to have, at best, plateaued, and perhaps actual regression has occurred" in PG&E's checkup of certain transmission towers and vegetation management program to remove and trim hazardous trees near power lines.

Among the more troubling conclusions was that PG&E did not conduct before the start of this year's peak wildfire season climbing inspections of 967 transmission structures in high risk areas. Its failure to do so was caused by human error, lack of oversight, miscommunications and failure to appropriately escalate matters, according to Filip.

While PG&E intended to complete inspections of all 500 of its transmission towers, it said that it did not prioritize those in the highest fire-threat areas. It blamed "operational delays associated with digitizing inspection forms."

Because of the setback, the decision was made to start inspections in low and medium risk districts, where roughly 60% of the towers are located, according to Schar of Cravath, Swaine & Moore LLP.

PG&E unveiled tentative plans to develop a "more rigorous, systematic and transparent process" for targeting wildfire prevention work in the areas it's most urgently needed. Company chief risk officer Sumeet Singh will head the program.

As of Oct. 26, the utility said it's completed 656 of 1,117 inspections of towers in the highest risk areas.

Responding to claims that its vegetation management program has regressed, PG&E also disputed findings that it prioritized reaching low-hanging wildfire mitigation targets to make it look good. It said it did not programmatically target low-risk areas but rather followed a ranking it devised in 2019 for selecting areas to work.

Roughly 40% of the miles covered and more than 50% of trees removed or trimmed as a result of its program were in the top 100 highest-risk districts as identified by its risk model, according to the utility.

"While PG&E does not believe the overall quality of its [enhanced vegetation management] work has regressed in 2020, the monitor has identified issues that were missed, and the process has provided valuable feedback to PG&E and its contractor crews," Schar wrote.

The Department of Forestry and Fire Protection and Shasta County district attorney's office is still investigating whether PG&E equipment caused the Zogg Fire. The blaze killed four people, destroyed 204 structures and burned more than 56,000 acres over 16 days.

According to a quarterly filing with the U.S. Securities and Exchange Commission, the utility reported it could face "significant liability in connection with this fire."