California to Consider Broad Shakeup of PG&E After Deadly Fires
(Bloomberg) -- California regulators said they will consider breaking up PG&E Corp. or turning it into a publicly owned utility as part of a broad review into the company after a string of deadly disasters tied to its operations.
The California Public Utilities Commission said Friday that it also will consider whether PG&E’s board and executive management should be replaced. The agency said it hadn’t drawn any conclusions on how it will act, and it will seek input from the public.
“This is not a punitive exercise,” commission President Michael Picker, who will oversee the proceeding, said in a statement. “The keystone question is would, compared to PG&E and PG&E Corp. as presently constituted, any of the proposals provide Northern Californians with safer natural gas and electric service at just and reasonable rates?”
The step came one day after a state senator demanded changes to the board and executive suite in light of accusations by the commission that PG&E had falsified natural-gas safety records for years after a 2010 natural gas pipeline explosion that killed eight people. PG&E, the largest utility in California, was already under scrutiny for the role its equipment might have played in sparking last month’s Camp Fire, the deadliest and most destructive in state history.
PG&E shares have lost more than half their value since the outbreak of that fire on Nov. 8 on concern the company’s equipment may be found to be responsible. The utility is also confronting billions of dollars of claims stemming from last year’s deadly Northern California fires, where state investigators have said its equipment sparked at least 17 blazes, with rule violations found in 11 of them.
Picker said last month that he would open a sweeping review of the San Francisco-based company’s safety culture, structure and governance, including a possible boardroom shakeup in light of a string of safety issues. The agency will gather input on the underlying issue of PG&E’s safety culture from a range of perspectives before it will consider implementing changes, the commission said Friday.
PG&E said in a statement late Friday that it recognized state regulators have serious concerns about the utility and it needed to "re-earn" the trust of its customers. The company said that while it has made progress, it has more work to do and would be open to a range of solutions.
“The company’s board of directors and senior management team have been actively exploring additional changes beyond the corrective actions and new programs we’ve implemented at the operational level,” PG&E said. “Our shared goal is to improve our culture and practices that will more fully reinforce our commitment to safety, integrity and risk reduction.”
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