LAKE COUNTY, Calif. – Pacific Gas and Electric Co. is facing more fallout from the 2017 wildland fires that ravaged the North Bay and other parts of California, including Lake County, with findings of an investigation alleging that the utility disposed of evidence and failed to keep proper records.
On Friday, the California Public Utilities Commission addressed the 2017 wildfires in multiple proceedings.
Among them, the CPUC opened a proceeding to consider fines and penalties against PG&E for the 2017 wildfires and ordered the utility to create a mobile application that empowers the public to report utility pole issues.
The CPUC also adopted a methodology to conduct a financial “stress test” per Senate Bill 901, a bill introduced by State Sen. Bill Dodd, who formerly represented Lake County in the Assembly.
“We are committed to taking the actions necessary to further reduce wildfire risk in our communities, master the fundamentals of our business, and compensate wildfire victims as quickly as possible as part of the Chapter 11 process,” PG&E said in a Friday statement, the full text of which can be seen below. “To do that, we are making fundamental changes throughout PG&E. We have appointed new leadership throughout the company, including a new board, a new CEO, and new electric and gas leaders.”
The proceeding to consider fines and penalties opened Friday will evaluate the findings in the CPUC’s Safety and Enforcement Division’s investigation into whether PG&E violated any rules, regulations or requirements pertaining to the maintenance and operation of its electric facilities that were involved in igniting fires in its service territory in 2017, the CPUC reported.
The report by the Safety and Enforcement Division, or SED, says that PG&E failed to follow industry best practices, and that there were various deficiencies in PG&E’s Vegetation Management practices and procedures and equipment operations in severe conditions.
Investigation looks at Lake County’s Sulphur fire
The SED found that the Sulphur fire in Lake County, which began on Oct. 8, 2017, ignited near Sulphur Bank Drive and Pomo Road in Clearlake Oaks.
The fire burned 2,207 acres and damaged or destroyed 162 structures, most of them in Clearlake, where the fire quickly moved after its nighttime start.
SED’s investigation found that a PG&E wood pole carrying energized facilities failed and fell to the ground, igniting the Sulphur fire.
According to the investigation, PG&E also had two specific violations regarding the Sulphur fire under General Order 95, which establishes the requirements for design, construction and maintenance of overhead electric lines to ensure adequate service and safety.
General Order 95 imposes upon utilities the requirement to maintain a safe and reliable electric system.
In the first violation, the SED investigation alleges that PG&E violated General Order 95, Rule 19, for disposing of evidence related to a reported incident and commission investigation. That same allegation of evidence disposal was made against PG&E for one other fire, the Point fire, which began Oct. 9, 2017, in Calaveras County.
The second violation for the Sulphur fire pertains to General Order 95, Rule 31.1, with the SED investigation findings alleging that PG&E failed to maintain records of the 2016 Catastrophic Event Memorandum Account inspection.
Rule 31.1 relates to failing to identify and abate dying, diseased or weakened; improper performance of vegetation management activities, such as trimming, removal, etc.; failing to perform a complete patrol of its system and according to best practices described in PG&E procedures; failing to retain documents related to vegetation inspections and a work order; late completion of work orders according to PG&E’s own procedures, and for PG&E’s records indicating that a work order had been completed when, in fact, the work had not been performed.
PG&E directed to provide report, create app
The CPUC directed PG&E to provide a report on various aspects of its operations of its electric facilities and to take immediate corrective action.
“PG&E’s violations during the 2017 fire siege are extensive and disturbing, and go to basic requirements, such as the failure to maintain adequate records,” said Commissioner Clifford Rechtschaffen. “We will consider all appropriate sanctions in response.”
Friday’s decision also adopts a fire mitigation measure that employs technology to empower the public to report safety concerns.
The decision orders PG&E to create a downloadable mobile application that customers can use to report safety concerns with utility poles.
The CPUC said the public will be able to send pictures of the utility poles in question to a database maintained by PG&E. The database would include GIS coordinates, attachments, and operations and maintenance records.
“The app is our way of crowdsourcing public safety and helping reduce the risk of wildfires,” said CPUC President Michael Picker. “PG&E must develop the mobile app and the database at shareholder expense.”
SED’s report and supporting attachments will be available in 10 business days and posted on the CPUC’s Web site.
Separately, the CPUC adopted a framework to consider a utility’s financial status and determine the maximum amount a company can pay for 2017 wildfire costs without harming ratepayers or materially impacting a company’s ability to provide adequate and safe service, as required by law.
“In SB 901, the Legislature directed the CPUC to act quickly on numerous fronts,” said President Picker. “Today we adopt a methodology to allocate costs resulting from fires in 2017. California utilities, which are not in active Chapter 11 proceedings, can access this methodology in future applications for cost recovery. This decision builds on decisions earlier this year on Wildfire Mitigation Plans, and executive compensation. The continued threat of wildfires to our homes, businesses, and infrastructure, requires the CPUC to continue our work to mitigate fires, and adapt to a dynamic climate.”
Added Commissioner Genevieve Shiroma, “The CPUC’s decision on the stress test to comply with SB 901 includes essential ratepayer protections while ensuring that utilities are able to access the capital necessary to invest in infrastructure and resources to maintain safe and reliable service.”
Utilities who request recovery of costs and expenses from wildfires in 2017 will follow the Stress Test Methodology adopted Friday.
A utility that has filed for relief under Chapter 11 of the Bankruptcy Code may not access the stress test to recover costs in an application under section 451.2(b), because the CPUC cannot determine the company’s “financial status,” which includes, among other considerations, its capital structure, liquidity needs, and liabilities, as well as its capacity to raise additional debt, cash, or resources that are reasonably available to the utility, as required by section 451.2(b).
The proposal voted on by the CPUC Friday is available here; documents related to this proceeding are available here.
PG&E responds to CPUC action
PG&E’s released a lengthy statement on Friday in response to the CPUC’s actions. The full statement is published below.
“Our hearts go out to those who have lost so much, and we remain focused on supporting them through the recovery and rebuilding process. We also want to thank the brave first responders who worked tirelessly to save lives, contain these devastating fires and protect our citizens and communities.
“We are carefully reviewing the California Public Utilities Commission’s (CPUC) Order Instituting Investigation and its Safety and Enforcement Division’s findings in the 2017 Northern California Wildfires to understand the agency’s perspectives. We will fully cooperate with the CPUC’s investigation throughout this process.
“PG&E is working to help affected communities recover and rebuild and is seeking to emerge from bankruptcy as quickly as possible in order to compensate wildfire victims. We recognize that it will take sustained action on our part to regain the trust of our customers and stakeholders. We are working to develop a reorganization plan that can deliver on its promises and get quick approval from key stakeholders to ensure expeditious payment of wildfire liabilities.
“We understand and recognize the CPUC’s concerns and acknowledge that while we have implemented significant additional wildfire mitigation measures following the devastating 2017 and 2018 wildfires, there is still more work to do and we are committed to doing it the right way. We’re open to a range of solutions that will help make the energy system safer for the customers we serve.
“We are committed to taking the actions necessary to further reduce wildfire risk in our communities, master the fundamentals of our business, and compensate wildfire victims as quickly as possible as part of the Chapter 11 process.
“To do that, we are making fundamental changes throughout PG&E. We have appointed new leadership throughout the company, including a new Board, a new CEO, and new Electric and Gas leaders.
“Additionally, we are engaged in efforts designed to further mitigate wildfire risk on multiple levels by inspecting, repairing and hardening our electrical infrastructure, generating better and more location-specific information about high-threat weather conditions, proactively shutting off power in weather conditions known to pose a serious wildfire threat, and trimming excess vegetation that can damage power lines and create an ignition source.
“We are also actively working with state agencies and local communities to develop the shared solutions and coordinated management needed to most effectively address the growing wildfire threat in California.”
CPUC opens case against PG&E for 2017 wildfires; agency considering fines, penalties
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