Northern California residents are suffering after another tragic fire season, as countless homes and lives were lost, and millions endured rounds of power blackouts. Pacific Gas & Electric, PG&E, has admitted some responsibility, and now critics are becoming more vocal and proactive in their attempts to dismantle the organization.
PG&E’s critics are numerous, from customers, local representatives, county officials, and the Governor’s office, to investors and state regulators.
According to federal court documents filed Oct. 25 at the direction of a group of investors, PG&E executives received a class-action lawsuit stemming from claims that the company mislead investors and the public regarding the rolling blackouts. The lawsuit claims that PG&E “made false and/or misleading statements and/or failed to disclose that: (i) PG&E’s purportedly enhanced wildfire prevention and safety protocols and procedures were inadequate to meet the challenges for which they were ostensibly designed.”
The nation’s largest publicly traded utility company is also facing claims from up to 100,000 Californians about the series of fires. Cities and businesses around the state are requesting rebates and compensation for costs associated with the events.
Some affected customers are seeing $100 energy adjustment credits on their November statements, though there is no language explaining the credit, it is presumably the compensation demanded by Governor Gavin Newsom’s office in October.
Newsom has also suggested that Warren Buffett’s Berkshire Hathaway should take over PG&E.
Others argue that a sustainable future does not include the regulatory system currently in place, and several municipalities are considering options to control their power grid. This is in direct response to PG&E’s handling of the recent power outages.
The Public Utilities Commission, PUC, regulates PG&E, and President Marybel Batjer told the New York Times that she was “‘astonished’ at PG&E’s lack of technology and services…and she told PG&E executives, ‘this is not hard. You have failed on so many levels.’”
Bloomberg News is reporting that PG&E is attempting to offer $13.5 billion to compensate wildfire victims, but this pales in comparison to the $17.9 billion proposed in September.
According to a recent Wall Street Journal article, PG&E is “not broke. It is following the survival strategy used by other troubled companies looking to put a lid on damages” by forcing proceedings to take place in bankruptcy court.
Bankruptcy courts are notoriously more challenging to navigate for plaintiffs, and they offer significant protection for businesses looking to preserve assets.
Critics of the newly released reorganization plan say that shareholders and bondholders are giving up nothing, while ratepayers are forced to pay higher rates and victims are essentially revictimized by the process.
Bloomberg reported that “the company’s shares surged as much as 19%” on the news, while insurance companies benefit from the proposal to the tune of $9.4 billion.
While opponents are vocal and support for a significant restructuring of the utility has broad political support, no clear path to a sustainable future is being proposed.
When asked if PG&E had a sustainable plan for the future for Sonoma County and Sonoma State University, PG&E Media Rep Deanna Contreras said that designated agents stay in communication with county leaders and university officials. Still, no plans for the future were discussed.
Barring a radical change in leadership, or new regulations from the PUC, extended power outages could become the new normal during fall semesters.
