Commission Proposes a Path for Utility Takeover

By Published On: February 26, 2020

While PG&E is continuing on its path to emerge from bankruptcy, Marybel Batjer, the California Public Utilities Commission (Commission) President, outlined a proposed process on February 18 as to how the State could revoke the utility’s operating license if the utility again commits serious safety violations and fails to adequately address them.

Reacting to the Commission’s proposal, Governor Newsom said that he supports the proposed additional oversight of PG&E:

“I look forward to getting to the point where we can make the case that the governance is radically changed and the financing is appropriate so this utility can get out of bankruptcy not limping.”

Under the proposed plan (OIR R.18-04-019), the State could appoint a receiver to take control of PG&E’s business operations if:

  • PG&E’s equipment sparks a destructive blaze.
  • PG&E fails to minimize blackouts or hides other safety issues.

The Commission released a statement in which Batjer said:

“Investor-owned utilities have an enormous privilege in serving as a unique provider of essential services to the public — and with that privilege comes great responsibility to those they serve. I am very concerned about PG&E’s pattern of safety-related failures…Most importantly, it raises questions about how well this utility understands the privilege it has been given and its commitment to following through on its responsibilities…It must be clearly demonstrated that mechanisms are in place to ensure that the utility has emerged as a fundamentally changed company that has a commitment and ability to provide safe and reliable service at reasonable rates and can simultaneously continue needed improvements to mitigate wildfire risk and achieve the state’s climategoals.”

Batjer acknowledged that the Commission is “working under an aggressive timeline” to wrap up its review of PG&E’s bankruptcy plan in the next three and a half months. She added that, despite the urgent deadline, the Commission needs to consider the best way for PG&E to be run after the case is over.

In response to the proposed plan, PG&E said, “We welcome President Batjer’s input regarding our plan for emerging from Chapter 11 and building a re-imagined PG&E.”

The utility has insisted that its current plan “complies with both the letter and spirit” of AB 1054, the law that set the June 30 deadline.

The commission has begun public hearings regarding PG&E’s emergence from bankruptcy. The evidentiary hearings are scheduled for February 25 through March 4, 2020.

In other PG&E news, U.S. District Judge William Alsup told PG&E’s lawyers to explain in writing why its inspections failed to identify and fix a worn hook on a power line that resembles the problem responsible for the 2018 Camp Fire. The hook, which PG&E has said it will repair, was found by an expert hired by attorneys for fire victims.

PG&E has also posted a $3.62 billion loss for the final three months of 2019, though the utility said it’s on track to emerge from a bankruptcy quagmire linked to its liabilities for a string of lethal wildfires.

About the Author: Jesus Arredondo

Jesus Arredondo is an Energy Industry Analyst and former State of California official. He can be reached at jesus at