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PG&E gets an earful from lawmakers at hearing over outage

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PG&E executives received withering criticism from state regulators Friday over a preemptive blackout that left millions without power, some for days.

Pacific Gas & Electric, the state’s largest power company, was rebuked at an emergency meeting convened by the state’s Public Utilities Commission to examine how decisions were made and carried out in last week’s power shut-off. The operation affected more than 700,000 customers of the utility in Northern and Central California and about 66,000 customers in Sonoma County.

PG&E acted after weather forecasts pointed to a severe fire risk across much of its territory because of hot, dry conditions and high winds. Its equipment has repeatedly been blamed for deadly wildfires, leaving it facing liability claims that have helped put it into bankruptcy.

Whatever the company’s good intentions, regulators left no doubt Friday that the execution of the blackout — the largest such operation in the state’s history — was unacceptable.

Marybel Batjer, president of five-member commission, said she was “astonished” at PG&E’s lack of modern technology and services, citing the website crashes and communication system failures that added to last week’s upheaval.

“This is not hard,” she told PG&E executives. “You guys have failed on so many levels on pretty simple stuff. You need to get there now. Not at the end of the year. Now.”

Bill Johnson, the company’s chief executive, defended the decision to cut off electricity, even as he acknowledged failures in PG&E’s use of the strategy. He told the commission that he looked forward to a future in which the company no longer needed power shut-offs to prevent wildfires but said it would most likely take a decade to reach that point.

“We, I, acknowledge these critical errors,” he said. “I apologize for the hardship.”

Many customers lost power without notice. The power shut-offs also forced businesses and schools to close and endangered people with life-threatening health conditions.

The hearing, which lasted 4½ hours, provided the fullest look yet at how PG&E came to make the unusually broad move, and who was responsible.

Michael Lewis, PG&E’s senior vice president for electrical operations, told the commission that workers in the field had simply carried out his order. “They didn’t make the decision,” Lewis said. “I did.”

But company officials said they have been working to correct their failures. They reported an upgrade to the website that repeatedly crashed during the blackout, preventing customers and local governments from getting information.

They also said that the utility was stepping up inspections and upgrading its power lines, and that it would ensure that customers had better access to assistance centers in future power shut-offs.

Johnson said alternative ways of delivering electricity needed more consideration to avoid such episodes and to deal with the growing impact of climate change. Microgrids, which generate power for a concentrated area and can be shut on and off independently, are one possibility, he said.

“No one ever wants to see anything like that again,” Johnson said of the power shut-offs. “There is commentary out there that we can’t be trusted to do this. I’m really looking for the best answer here for the public.”

Before last week’s shut-offs, PG&E had used the strategy for about 100,000 customers in separate events.

“We need to get better at doing it,” said Andrew Vesey, who oversees the company’s utility subsidiary and its operations. “The buck stops with me.”

Batjer said the commission expected PG&E to submit a detailed report about the power shut-offs within the next few days. “I really do believe that we all will be judged by the outcomes, not the plans,” she said.

State Sen. Jerry Hill, a San Mateo Democrat who has been a frequent critic of PG&E, issued a statement saying the company was “attempting belatedly to rebuild their support services” to protect customers.

“It would have been better for PG&E leaders to detail exactly why it’s going to take them 10 years to build the resilient electrical system we should already have so that power shutdowns are truly a rare last resort,” he said.

PG&E, in bankruptcy since January with tens of billions of dollars in liabilities related to wildfires caused by its equipment, has become known for system failures. These include a gas pipeline explosion that killed eight people and last year’s Camp fire, which destroyed the town of Paradise and killed 85 people.

Gov. Gavin Newsom said this week that PG&E’s use of the power shut-off strategy highlighted how disorganized the utility remained after numerous complaints, court cases and regulatory issues.

“The scope and duration of this outage was unacceptable,” 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. And he said he intended to urge Johnson to give consumers an automatic credit or rebate of $100 for residential customers and $250 for small businesses to compensate them for the blackouts.

Johnson said after Friday’s hearing that the company would consider the request, but that it was concerned about setting a precedent.

In addition to its scrutiny of PG&E, the commission has 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 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.”

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.

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, and are reviewing years of the utility’s actions and finances.

PG&E is fighting to emerge from bankruptcy a stronger company but continues to make missteps. Chief among the concerns have 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.

While PG&E’s equipment was found to have played a role in the bulk of the major 2017 wildfires that ravaged Northern California, the worst of those fires, the Tubbs fire, was blamed on faulty private electrical equipment. Cal Fire’s investigation into that fire, which killed 22 people and destroyed more than 4,600 homes in Sonoma County, is being challenged in court.

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.

Johnson said in his letter 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 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 PSPS event caused for millions of people and want to continue working with all key stakeholders to lessen this burden going forward,” Johnson said in his letter. “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.”

Consumer groups like The Utility Reform Network, known as TURN, want the courts to take more control of PG&E’s operations. They argue that the recurring troubles show that despite all of 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 before the Friday hearing. “It has never been clearer that the managers of PG&E are not to be trusted.”

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