The judge overseeing the aftermath of PG&E Corp.’s 2016 safety-related felony conviction has found the company violated the terms of its probation by failing to fully disclose an investigation into the utility’s role in a 2017 California wildfire.
U.S. District Judge William Alsup stopped short of imposing additional penalties on PG&E, which recently filed for bankruptcy with counsel from Cravath, Swaine & Moore. But the judge did say he was considering a number of potential additional restrictions, including ordering it to comply with California regulations regarding clearing brush from power lines, or forcing the utility to power down during threatening weather conditions.
State fire authorities, the judge noted, have found that PG&E equipment sparked 17 wildfires in the state in just one month in October 2017.
“We cannot continue to sustain this kind of catastrophic injury to the state,” said Alsup, noting that nearly 3 percent of the state’s total acreage has burned in the past two fire seasons. “PG&E is not the only source of these fires, but it is a source. And it is really to most of us unthinkable that a public utility would be out there causing that kind of damage.”
“We have to have electricity in this state, but can we have electricity that is delivered safely?” the judge said.
Alsup is overseeing PG&E’s probation following the company’s August 2016 conviction on six felony counts stemming from the 2010 pipeline explosion in San Bruno. The blast killed eight people and injured dozens more. Alsup inherited the case after Judge Thelton Henderson, who oversaw the trial, retired in 2017.
Alsup noted Wednesday at the onset of the three-hour hearing that although PG&E is a company, his role in overseeing probation mirrors what it would be in the case of an individual, such as a someone convicted on drug charges.
“Part of my duty is to supervise that offender and to make sure that we try to bring them into compliance to the law and to protect the public from further harms from the offender,” Alsup said.
Kate Dyer of Clarence Dyer & Cohen, a member of PG&E’s defense team, said that the company had provided the probation office with notification in May 2018 the same day that it reached a settlement with state fire authorities over wildfires investigators concluded that PG&E caused in 2017. She said that the company further provided the probation office with disclosures it made to investors in SEC filings the following month about the settlement.
But federal probation officer Jennifer Hutchings testified that PG&E had failed to disclose that it was the subject of a full criminal investigation related to 2017 fires, something the company is required to do under the terms of its probation. Hutchings said that she should have been informed “in much further detail.” Dyer declined to cross-examine Hutchings, and the judge found that PG&E violated the terms of its probation immediately after the probation officer’s testimony.
The remainder of the hearing involved Alsup hearing from a variety of parties—the company, federal prosecutors, the California Public Utilities Commission, CalFire, and plaintiffs lawyers who represent victims of recent wildfires—about the appropriate course of action going forward.
PG&E is due to file a draft of its plan to manage vegetation along its power lines to the CPUC next week, as mandated under state legislation passed last year. But Alsup urged PG&E not to wait until the end of a months-long regulatory review process to take action before the coming fire season, which unofficially begins at the beginning of summer.
“We need strong medicine, come June 21,” Alsup said. “It has to be in place. We can’t still be talking about it.”