PG&E was slapped with a nearly $2 billion penalty on Thursday for its role in causing several fatal Northern California infernos in 2017 and 2018, the largest financial punishment ever imposed on an American utility.
The state Public Utilities Commission voted unanimously to impose a $1.94 billion penalty on the utility, exceeding the $1.6 billion fine that the PUC imposed — also on PG&E — for causing a fatal explosion in San Bruno.
“This is a record-setting penalty of $1.937 billion,” said PUC Commissioner Clifford Rechtschaffen, who crafted the proposal to penalize PG&E. “The scope of the devastation caused by PG&E’s misconduct demands this record penalty.”
The PUC decision was structured to ensure that shareholders — and not PG&E ratepayers — would have to pay for $1.82 billion of the penalty.
Gerald Singleton, an attorney for 7,000 fire victims, said he was pleased by the PUC’s decision.
“The old leadership of PG&E obviously made catastrophic mistakes and they caused these fires,” Singleton said. “PG&E understood that it would be punished.”
In 2016, PG&E become a convicted felon when a federal jury convicted the utility of crimes it committed before and after a fatal gas explosion that killed eight and destroyed a San Bruno neighborhood in 2010.
In March, PG&E joined the grim pantheon of America’s deadliest companies when it agreed to plead guilty to 84 counts of involuntary manslaughter arising from its role in the deadly Camp Fire that roared through Butte County in 2018.
Despite the record-setting nature of the penalty, the PUC did back away from adding a $200 million fine to the penalty over concerns that too drastic a punishment could jeopardize a delicate tapestry that Gov. Gavin Newsom, the PUC, and PG&E have woven to ensure that the embattled utility successfully emerges from bankruptcy by the end of June.
The penalty is greater than a $1.7 billion settlement that PG&E had reached last year, but it is less than the $2.1 billion that a PUC law judge had proposed in January. The fine was approved in a 5-0 vote Thursday.
Mark Toney, executive director of The Utility Reform Network, or TURN, harshly criticized the PUC’s penalty because the decision left out the $200 million fine.
“PG&E has already pleaded guilty to manslaughter for the 84 deaths its conduct caused,” Toney said. “Customers want to see PG&E held accountable for its flagrant and lethal violations of safety rules.”
The PUC, in Toney’s view, gave PG&E a break by giving too much weight to PG&E’s concerns about paying too much.
“The amount of the fine is supposed to reflect the seriousness of the conduct not the whims of the wrongdoer,” Toney said.
PG&E said Thursday it accepts the commission’s decision and will undertake system upgrades and corrective measures now required by that decision and the previous settlement.
“We remain deeply sorry about the role our equipment had in tragic wildfires in recent years,” PG&E said in a prepared release. “We recognize our fundamental obligation to operate our system safely.”
PG&E is attempting to extricate itself from a $51.69 billion bankruptcy proceeding ushered in by the company’s wildfire-linked liabilities that caused the company’s finances to buckle beneath a mountain of debts.
The utility must successfully conclude its bankruptcy case by June 30 under an agreement it reached in March with Newsom. If PG&E fails to emerge from bankruptcy by that date, the company might then be sold off to the state or other interested parties. The company also must conclude the bankruptcy by the end of June in order to be able to tap a wildfire fund. Without access to the fund, PG&E’s finances could again collapse.
Singleton, the attorney for the wildfire victims, believes the PUC decision strikes the right balance and assures that sufficient money will remain available to help pay the thousands of fire victims harmed by PG&E’s blunders and actions.
“PG&E is being punished, but it is not being punished to the extent that there won’t be money left over to pay for the harm they have caused,” Singleton said.
