Relevant Document:Revised Order to Show Cause
On Tuesday, March 5, Judge William Alsup of the U.S. District Court for the Northern District of California issued a “revised” order to show cause why the court should not modify PG&E’s probation conditions. Noting that “the offender’s unsafe conduct led to a deadly pipeline explosion and to six felony convictions,” Judge Alsup explains that the unsafe conduct has now “led to recurring deadly wildfires caused by its electrical system.”
In the revised order, Judge Alsup proposes the following new probation conditions “to protect the public from further death and destruction resulting from PG&E-caused wildfires, to deter similar wrongs by other utilities, and to promote the rehabilitation of PG&E among other goals of 18 U.S.C. §§ 3553(a)(1) and (a)(2)”:
- PG&E must “fully comply with all applicable laws concerning vegetation management and clearance requirements.” The order indicates that the court accepts Cal Fire’s interpretation of California Public Resources Code section 4293.
- PG&E must “fully comply with the specific targets and metrics set forth in its amended 2019 wildfire mitigation plan [], including with respect to enhanced vegetation management.” The order provides, however, that such compliance “will not excuse any failure to fully comply with the vegetation laws” as required under the first condition.
- The third-party monitor retained in connection with PG&E’s federal criminal convictions related to the 2010 San Bruno gas explosion must “assess PG&E’s wildfire mitigation and wildfire safety work, including through regular, unannounced inspections of PG&E’s vegetation management efforts and equipment inspection, enhancement, and repair efforts.” Those inspections would include “both inspections of segments of power lines where PG&E has conducted its enhanced vegetation management efforts pursuant to its amended 2019 wildfire mitigation plan, as well as areas where enhanced vegetation management has yet to occur.” The inspections would also include “field interviews and questioning of PG&E employees and contractors.”
- PG&E must “maintain traceable, verifiable, accurate, and complete records of its vegetation management efforts.” On the first business day of every month, PG&E must report to the monitor “its vegetation management status and progress” and make all related records available for inspection at the monitor’s request.
- PG&E must “ensure that sufficient resources, financial and personnel, including contractors and employees, are allocated to achieve the foregoing.” If it cannot find enough contractors, PG&E must “hire and train its own crews to trim and remove trees.” In order to “ensure that sufficient financial resources are available for this purpose,” PG&E “may not issue any dividends until it is in compliance with all applicable vegetation management requirements as set forth above” (emphasis added).
A hearing on the revised order is scheduled for April 2 at 11 a.m. ET. The revised order establishes March 22 at 3 p.m. ET as the deadline for parties to show cause why PG&E’s probation conditions should not be modified.
Background
The revised order states that it supersedes the court’s
Jan. 9 order to show cause and “takes into account the large number of submissions to date.” As indicated in the revised order, the Jan. 9 order required the parties to show cause why PG&E’s probations conditions should not be modified to, among other things, “require PG&E to reinspect its electrical grid, remove or trim all trees or branches that might make contact with PG&E’s equipment during high-wind events, and de-energize any part of its electrical grid not yet rated as safe by PG&E for the wind conditions then prevailing.”
PG&E, and separately
Cal Fire and the California Public Utilities Commission, respectively, filed written responses to the Jan. 9 order.
On Jan. 17, the court issued a
tentative finding that “the single most recurring cause of the large 2017 and 2018 wildfires attributable to PG&E’s equipment has been the susceptibility of PG&E’s distribution lines to trees or limbs falling onto them during high-wind events.”
At the
Jan. 30 hearing on the Jan. 9 order and other matters, the court decided it would not impose new probation conditions at that time and ordered the parties to make various filings. PG&E
filed a copy of its SB-901-mandated
wildfire-mitigation plan with the court on Feb. 6. In addition, Cal Fire and PG&E filed their respective responses regarding whether California Public Resources Code section 4293 mandates the trimming of tree limbs that overhang power lines. As directed by the court, plaintiffs’ attorneys Frank Pitre and Steve Campora filed a brief responding to PG&E’s submission regarding section 4293 and separately filed a
submission in support of their comments at the Jan. 30 district court hearing regarding corporate governance and risk mitigation.
According to the revised order, PG&E’s filings include “several relevant admissions,” including “‘that vegetation contact is the primary risk driver with respect to ignitions on its distribution lines.’” In that context, the order explains, “‘Vegetation’ means trees and limbs.” In addition, the order indicates that PG&E admitted that “as of June 2017, there were 3,962 unworked trees which PG&E had identified in 2016 as hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires before the next inspection cycle.’” Moreover, although Cal Fire has not finished investigating the cause of the 2018 Camp Fire, PG&E recently announced it “‘believes it is probable that its equipment will be determined to be an ignition point of the 2018 Camp Fire,’” the order continues.
Explanation of Proposed Conditions
In addressing PG&E’s “complaints that the vegetation-management conditions proposed in the January 9 order would be unduly expensive, require superhuman efforts, and exceed the requirements of state and federal law,” Judge Alsup says that the proposed conditions “would now simply require full compliance with existing law and with the metrics proposed in PG&E’s own wildfire mitigation plan.”
Judge Alsup “rejects PG&E’s back-up contention that ‘perfect compliance’ with Section 4293 is impossible due to ‘densely forested, highly dynamic, living environments, in which conditions can rapidly change.’” Calling PG&E’s performance relating to vegetation management “dismal,” the order maintains that “anyone who knows the terrain and its vegetation knows that it takes years for trees to grow to the height of PG&E’s lines,” adding that “[r]egular inspections could easily spot trees that are high enough to present a hazard.” If applicable law is “too strict,” the order says, PG&E should “seek the relaxation of such laws through its well-oiled lobbying efforts.”
Continuing, Judge Alsup highlights that PG&E “paid out immense sums in dividends - $798 million and $925 million in 2017 and 2016, respectively, with the vast majority paid to PG&E Corporation.” In turn, the order notes, PG&E Corp. paid dividends to its common shareholders amounting to $1 billion and $921 million during 2017 and 2016, respectively. During that period, PG&E “knowingly failed to trim or remove thousands of trees it had already identified as posing a hazard,” the order states.
Judge Alsup stresses that “some of these dividends could and should have been kept and used to bring PG&E into compliance with state and federal law with respect to what has become the number one cause of PG&E-induced wildfires” (emphasis added). The proposed conditions would “help ensure that, going forward, funds are adequately allocated to PG&E’s vegetation management and wildfire mitigation costs.”
The order “postpones … for a few weeks” the issue of “whether the offender should be required to de-energize its lines in high winds unless it is safe to maintain power.”
Probation Violation
Judge Alsup also notes that at the
Jan. 30 hearing he determined that PG&E had violated its probation by “failing to notify the probation office of a $1.5 million settlement entered into with the Butte County District Attorney’s Office, whereby Butte County agreed to forgo criminal prosecution in connection with three October 2017 wildfires that CAL FIRE determined had been caused by vegetation contacting PG&E distribution lines.” U.S. probation officer Jennifer Hutchings had raised the probation-violation allegations in a “
Form 12.” The order notes that sentencing on that probation violation has not yet occurred.