PG&E faces sanctions, demands for refunds in wake of planned blackouts

Governor rips utility in new letter, says rebates are needed

Without electricity the marquee of the Orinda Theatre remains dark as vehicles make their way down Moraga Way in Orinda, Calif., on Thursday, Oct. 10, 2019. Business continue to be closed due to the recent PG&E shutdown. PG&E began restoring power to Bay Area residents Thursday, taking the first steps in what could be a days-long process to end an outage that left more than 700,000 homes and businesses in the dark. (Jose Carlos Fajardo/Bay Area News Group)
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State officials blasted Pacific Gas & Electric on Monday, with regulators suggesting sanctions and Gov. Gavin Newsom demanding that the disgraced utility pay rebates to customers who lost power during last week’s planned shutdowns, which affected more than 700,000 customers across Northern California and the Bay Area.

“Californians should not pay the price for decades of PG&E’s greed and neglect,” Newson said in a letter to PG&E’s chief executive officer Monday. Calling the utility’s handling of last week’s shutdowns “unacceptable,” Newsom said that the company should provide rebates of $100 to residential customers and $250 to business customers affected by the power outages.

Separately, the California Public Utilities Commission issued a harshly worded letter to PG&E and summoned the CEO, Bill Johnson, and other top executives to an emergency meeting of the regulatory panel that is scheduled for Friday.

“The scope, scale, complexity, and overall impact to people’s lives, businesses, and the economy of this action cannot be understated,” PUC President Marybel Batjer said in a letter sent to Johnson Monday. “Failures in execution, combined with the magnitude of this power shutoff event, created an unacceptable situation that should never be repeated.

The agency issued a series of actions for PG&E, including dramatically shortening the amount of time that people are left without electricity during preemptive shutdowns to 12 hours, down from the utility’s current goal of restoring power within 48 hours after a planned outage.

“At a minimum, this should be the goal for utility-caused outages, such as a planned power shutoff,” Batjer wrote.

In addition, the PUC said PG&E must try harder to avoid large-scale outages, improve communication with the public and local officials, develop a better system for distributing outage maps and work with emergency personnel to make sure PG&E staff are adequately trained.

Roughly 738,000 PG&E customers in 34 counties — including every Bay Area county except San Francisco —were forced to endure intentional outages ordered by the utility last week as a precautionary measure aimed at preventing wildfires amid high winds and dry weather conditions. Because a utility “customer” can include multi-unit dwellings and other places where people share power service, the number of people affected is estimated to reach into the millions.

The decision to preemptively cut off power for such a vast swath of the state followed state investigators’ findings that PG&E equipment caused more than a dozen wildfires in California in 2017 and 2018, including the deadly Camp Fire last October that left 85 people and effectively destroyed the town of Paradise. Confronted with wildfire-related claims in the range of $30 billion, along with numerous other debts, PG&E filed for a $51.69 billion bankruptcy in January, seeking to reorganize its shattered finances.

Amid the unprecedented preemptive shutdowns last week, executives with PG&E last week acknowledged they had not been “adequately prepared” for the power outages, and apologized for the company’s failure to communicate information about the shutdown. Faced with an 800% increase in traffic, the utility’s website buckled and crashed as the shutdowns began last Tuesday, leaving customers and others without a means of determining whether their neighborhoods would be plunged into darkness.

“PG&E’s lack of preparation and poor performance is particularly alarming given that, prior to the event, top executives responded to the scrutiny and questioning of state and local agencies that PG&E could handle a public safety shutoff event,” the governor stated in his letter to Johnson.

In a statement Monday, Johnson said that the company had “received the Governor’s letter and appreciate its intent: to help make the state and all of us safer.” He added that PG&E would issue a formal response to the demands outlined by Newsom and the PUC.

The utilities commission had demanded that PG&E file a formal response by the end of the day on Wednesday to the several demands from the state agency.

“It is critical that PG&E, and all the other utilities in the state, learn from this event and take steps now to ensure that mistakes and operational gaps are not repeated,” Batjer wrote Monday.

Michael Dawson, a Lafayette resident and member of a grassroots group opposing PG&E’s tree removal plans in the town, suggested Monday that the governor’s rebate proposal did not go far enough.

“The rebate seems like a clumsy slap on the wrist,” Dawson said. “Would this rebate apply to people who bought generators and extra supplies but weren’t ultimately turned off by PG&E? Does this come close to reimbursing small businesses?”

In the Montclair neighborhood of Oakland, where residents and businesses were without electricity for more than 24 hours, Montclair Sports owner Tom Revelli said he appreciated the governor’s proposal but reckoned the effort will fall far short.

“In my business, $250 barely covers a part-time staffer and three hours of electricity,” Revelli said.

Ann Kakham, manager of Daughter Thai Kitchen, also located in the Montclair neighborhood, estimated that the restaurant lost out on $20,000 in business, in addition to the cost of spoiled perishables, as a result of the 24-hour power outage.

“I would say $250 would be in the spirit of PG&E, and comparing that to what we lost, it’s nothing,” Kakham said.

In an interview recently with this news organization, former PUC Commissioner Catherine Sandoval issued several harsh grades to PG&E for how the utility handled the planned power shutoffs.

“I would give PG&E an F for communication,” said Sandoval, who also assigned the utility a D-minus for planning and a D for how it has carried out its plans so far in 2019 to mitigate wildfire risks and to harden and upgrade its electricity system.

Bay Area News Group staff writers Rex Crum and Jon Kawamoto contributed to this story.

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