PG&E Chief Says Blackout ‘Cannot Become the Status Quo’

PG&E Chief Says Blackout ‘Cannot Become the Status Quo’

SAN FRANCISCO — Pacific Gas & Electric presided over a blackout. Now it is under the spotlight.

PG&E’s chief executive said Thursday night that the utility did a poor job in executing the blackout, even if its intentions — pre-empting wildfires caused by its equipment — were sound.

“We understand that the size and scope of this event is untenable in the long term,” the chief executive, Bill Johnson, said in a letter sent to the state’s Public Utilities Commission late Thursday. “Events such as these cannot become the status quo in California.”

Thursday was the deadline set by the commission for PG&E to answer for its performance last week and explain what it intended to do differently in the future. On Friday afternoon, Mr. Johnson and other PG&E officials will appear at a commission hearing in San Francisco at which they can expect to be aggressively questioned.

[“This did not go well”: Inside PG&E’s control room during the blackout.]

In his letter, Mr. Johnson continued to promise that he would deliver on improvements he was hired to make when he took the job last January. “PG&E remains committed to bettering its practices and system,” he wrote.

But Mr. Johnson must make his case to a commission that has expressed its frustration with the handling of the blackouts. The power shut-offs left two million people in the dark — many without notice and for days — forced businesses and schools to close and endangered people with life-threatening health conditions.

PG&E, in bankruptcy after amassing tens of billions of dollars in liabilities related to recent wildfires caused by its equipment, has become known for its system failures that include a gas pipeline explosion that killed eight people and last year’s Camp Fire, which destroyed the town of Paradise and killed scores more.

Last week the trouble was the faltering of PG&E’s communication and computer systems, in particular the utility’s website, which crashed twice as the lights went out.

“Throughout the event, PG&E had multiple issues with communication, coordination, and event and resource management,” Marybel Batjer, president of the utilities commission wrote in the letter to Mr. Johnson, calling for him to appear before her agency. Referring to a public-safety power shut-off, she added, “Failures in execution, combined with the magnitude of this P.S.P.S. event, created an unacceptable situation that should never be repeated.”

The commission also informed the state’s two other investor-owned utilities, Southern California Edison and San Diego Gas & Electric, to review the orders given to PG&E regarding last week’s power shut-offs to ensure that “there is not a repeat of any of last week’s mistakes in any part of the state in the future.”

Gov. Gavin Newsom told the commission that he intended to urge Mr. Johnson to give consumers an automatic credit or rebate of $100 for residential customers and $250 for small businesses. Mr. Newsom said PG&E’s use of the power shut-off strategy highlighted how disorganized the utility remains after numerous complaints, court cases and regulatory issues.

“The scope and duration of this outage was unacceptable,” Mr. Newsom said. “It was clear from the start that PG&E implemented this extraordinary measure with astounding neglect and lack of preparation.”

The governor called on the commission to conduct a comprehensive review of the event, including failures in planning, decision making and execution.

A new look at PG&E’s operations would add to a lengthy list of reviews and investigations past and present.

From its fatal safety errors in its electric and gas pipeline business to criminal misdeeds that have led to felony convictions and the utility’s current bankruptcy case, PG&E has been the subject of extensive hand-wringing across California.

Mr. Newsom has suggested that serious consideration be given to breaking up PG&E, the state’s largest utility company, which serves 16 million customers through is electricity and natural gas operations.

Much of the company’s future rests in the federal courts, which are overseeing its bankruptcy and some of its criminal proceedings, which are reviewing years of the utility’s actions and its finances.

PG&E is fighting to emerge from bankruptcy a stronger company but continues to make missteps. Chief among the concerns has been the utility’s wildfire safety program and the handling of victims’ claims after things have gone wrong.

Tens of thousands of wildfire victims have until Monday to file claims related to two dozen wildfires caused by PG&E’s equipment, or risk losing out on any potential compensation from the utility. That includes the Camp Fire, the most devastating wildfire in California history, suspected of having been caused by a 100-year-old transmission tower that was a quarter-century past its “useful life” by PG&E’s own standards.

Mr. Johnson and his embattled utility argue that improvements are being made, particularly concerning wildfire prevention. PG&E has been carrying out a series of safety measures, modeled after methods pioneered by San Diego Gas & Electric. But some efforts have been stymied by a lack of resources, including a shortage of tree trimmers to clear vegetation around the company’s power lines.

And after the troubles with the power shut-off, there were renewed calls from homeowners, regulators and the governor for a fundamental review of PG&E’s operations, including its possible breakup.

Mr. Johnson said in the utility’s response to the utilities commission that the company needed to improve its flow of information to customers as well as its website, which “was a major area of frustration during this event.” He added that the utility was reaching out to communities affected by the power shut-offs, with listening sessions that included county agencies.

In addition, he said, PG&E has been conducting a detailed review of its actions and is working to enhance information-sharing technology and improve coordination with relevant agencies, notification procedures and operation of its community resource centers.

“We recognize the hardship that the recent P.S.P.S. event caused for millions of people and want to continue working with all key stakeholders to lessen this burden going forward,” Mr. Johnson said in his letter to the commission. “At the same time, we ask our customers, their families, and our local and state leaders to keep in mind the statistic that matters the most: There were no catastrophic wildfires.”

But consumer groups like The Utility Reform Network, known as TURN, want the courts to take more control of PG&E’s operations, arguing that the recurring troubles at the company show that despite all of Mr. Johnson’s pronouncements, the utility never seems to make significant changes to run a safe and reliable electric system.

“TURN is renewing our call for the judge in PG&E’s criminal case to put the company in receivership, and to ban PG&E from lobbying and making political contributions,” Mark Toney, TURN’s executive director, said in a statement ahead of the Friday hearing. “It has never been clearer that the managers of PG&E are not to be trusted.”


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