PG&E Scrutiny Builds on Two Fronts as California Fires Burn

(Bloomberg) -- California regulators are threatening to escalate enforcement action against utility giant PG&E Corp. for safety lapses at the same time as a federal judge is probing the company’s role in starting the second biggest-wildfire in the state’s history. 

California Public Utilities Commission President Marybel Batjer said she’s asking the agency’s staff to investigate whether PG&E should be placed into a higher level of oversight for a pattern of self-reported missed inspections and other safety incidents, according to a letter sent Wednesday to PG&E Chief Executive Officer Patricia Poppe. 

The notice came shortly after the judge overseeing PG&E’s criminal probation pressed the company for more details about how it initially responded to the Dixie Fire, which has burned about 650,000 acres and destroyed more 1,200 structures in the Sierra Nevada mountains north of Sacramento. PG&E has said that its power line may have started the fire, which has been raging for more than a month. 

PG&E fell as much as 0.5% in after-market trading. 

Read More: California’s Fires Exhaust the 10,000-Strong Army Fighting Them

The heightened scrutiny comes as PG&E has been working to restore its reputation and financial health after emerging from bankruptcy last year. California’s largest utility was forced to restructure after it started catastrophic wildfires in 2017 and 2018 that killed more than 100 people and destroyed more than 22,000 structures. 

California regulators set up a six-step enforcement process for PG&E as a condition of approving its bankruptcy exit plan. The state placed the utility into the first level of the process in April based on its failure to prioritize vegetation clearing in high-fire risk areas last year. 

Since then, PG&E has reported missed inspections of hydroelectric stations, poles and power lines, Batjer said in her letter. The utility has also reported missing internal targets for tree clearing work and failing to identify dry rot in certain poles, the letter said. Separately, the commission recently opened a probe into the responsibility of the utility’s equipment in causing the Dixie Fire, Batjer said. 

All of the issues identified in the self-reports have been corrected or are planned for corrective action, PG&E spokeswoman Lynsey Paulo said in a statement.   

“We share the Commission’s goal of reducing wildfire risk and prioritizing safety,” Paulo said in the statement. “We take feedback from the Commission and others seriously.” 

Meanwhile, U.S. District Judge William Alsup has raised dozens of new questions about the company’s account of events surrounding the Dixie Fire. The judge has been a harsh critic of the company’s track record on fire safety.

Alsup said in a court filing Wednesday that it “does not add up” that 10 hours after the company recorded a disruption to a power line, a worker known as a troubleman saw a fire that was “only” 600 or 800 square feet (55.7 or 74.3 square meters) in size.

The judge directed the utility to provide written responses -- along with sketches and relevant internal records including reports and emails -- by Aug. 31. He also ordered the troubleman to appear in court for a Sept. 13 hearing for questioning. 

“We’re aware of the order and will respond by the deadline,” PG&E said in a statement.

©2021 Bloomberg L.P.