news and events » news

News Header

News Item

return to News

Judge ponders forcing PG&E to spend dividend money on fire prevention

by Dale Kasler, Sacramento Bee |

A federal judge, calling PG&E’s management “dismal,” said late Tuesday he might order the utility to halt shareholder dividends and spend the money instead on wildfire prevention.

U.S. District Judge William Alsup, who has been harshly critical of PG&E’s record on wildfires, said in a written tentative ruling that he might cut off all dividends “to ensure that sufficient financial resources are available” for trimming and removing hazardous trees throughout PG&E’s vast territory. PG&E Corp. and its main subsidiary, Pacific Gas and Electric Co., filed for Chapter 11 bankruptcy in late January.

PG&E already halted shareholder dividends in the weeks following the October 2017 wildfires in the wine country and Sacramento Valley. Until then, it was paying out nearly $1 billion a year to its shareholders.

The proposed order comes as PG&E’s legal and financial woes continue to mount. Last month, the company told shareholders that it “believes it is probably that its equipment will be determined to be an ignition point of the 2018 Camp Fire. The November disaster killed 85 people and destroyed much of the town of Paradise.

Alsup is overseeing PG&E’s probation status after the utility was convicted on criminal charges in the 2010 San Bruno natural gas pipeline explosion, and has determined that its record on fire safety represents a violation of its probation terms. He has been contemplating ordering PG&E to institute much stricter safety programs this year, including the imposition of massive deliberate blackouts if high winds increase fire risks, as well as a more aggressive tree-trimming regime.

PG&E, in response, has told the judge that his plans would cost tens of billions of dollars, and that eliminating all fire risk is impossible. In his proposed order Tuesday, Alsop had no sympathy for that argument.

“The record demonstrates that PG&E’s performance with respect to vegetation management has been dismal,” he wrote. “And, not only does the offender provide no evidentiary support for its claim, but anyone who knows the terrain and its vegetation knows that it takes years for trees to grow to the height of PG&E’s lines. Regular inspections could easily spot trees that are high enough to present a hazard.”

PG&E, in a written statement Wednesday, said it is “committed to completing the work” outlined in a wildfire safety plan recent submitted to the Public Utilities Commission. The plan includes broader blackouts, although not as widespread as Alsop might order.

The utility added that it will respond directly to Alsop’s proposed order on dividends by March 22, the deadline imposed by the judge.

The utility has said its wildfire liabilities could total $30 billion.