On May 28, the California Public Utilities Commission (CPUC) approved PG&E’s bankruptcy exit plan, the penultimate milestone for the company before it can close its Chapter 11 case ahead of the State’s June 30 deadline.

CPUC framed their unanimous decision as a protection of PG&E customers, wildfire victims, and clean energy goals. However, they also acknowledged the uncertainty that lies ahead as regulators and lawmakers alike prepare for the possibility of a state takeover of PG&E if the company doesn’t exit bankruptcy on time or commits certain safety violations.

“PG&E has consistently failed to demonstrate that it adequately understands the privilege of being a state-sanctioned monopoly,” CPUC President Marybel Batjer said. Earlier in the year, Batjer helped craft an escalating enforcement process that could ultimately lead to the revocation of PG&E’s operating license.

Batjer added that PG&E’s forthcoming regional restructuring and board overhaul are steps in the right direction to “not merely … improve its safety culture, but to make it the best-run utility in this country.” She said that’s especially important as COVID-19 has forced more people to work and learn from home while relying on PG&E electricity.

PG&E CEO Bill Johnson said in a statement that, “We have heard the feedback in today’s decision and know we must do better as a company…PG&E’s most important responsibility remains the safety of our customers and the communities we serve, and we are committed to doing right by the communities impacted by wildfires.”

Court Backs Off PG&E Mandates 

A day before CPUC’s decision, U.S. District Judge William Alsup temporarily backed off his pending mandates on how the PG&E should survey its power lines.

Alsup did not mince words as he berated PG&E, stating from the outset that, “if ever there was a corporation that deserved to go to prison, it’s PG&E, for the number of people it’s killed in California …  PG&E is a recalcitrant criminal…You’re very good at making excuses, but you’re not good at complying with state law… All I ever hear from PG&E is a broken record.” 

PG&E attorneys argued that Alsup’s proposed requirements would be overly burdensome and didn’t acknowledge the company’s updated procedures following years of fires. After hearing from a CPUC attorney on PG&E changes driven by Governor Newsom and the new CPUC Wildfire Safety Division – its historic fires penalty and forthcoming structural reforms, among other results — Alsup said he didn’t want to “hamper the CPUC.” 

Alsup asked the CPUC to file a brief in two weeks on its efforts. He also asked PG&E, prosecutors, and the court monitor to file briefs in three weeks on possible improvements to its grid inspection and vegetation management practices.

Hearing on PG&E Takeover Bill Delayed 

Also at the end of May, a key vote on legislation allowing the State to turn PG&E into a State-owned, non-profit power agency was postponed. Assembly Utilities & Energy Committee Chair Chris Holden said the author asked for more time to work out the provisions of SB 350, the Clean Energy and Pollution Reduction Act, that would create Golden State Energy.

SB 350’s author, Senator Jerry Hill, said he looked forward to continuing the discussion. “This is important legislation to protect Californians and our State.”

As we have been reporting, the state Legislature is only considering “essential” legislation this session given the diminished timeframe for debating bills due to the pandemic.