PG&E Puts $150 Billion Price Tag on Judge's Aggressive Fire Plan

(Bloomberg) -- PG&E Corp. estimates it would cost as much as $150 billion this year alone to comply with a federal judge’s proposal to prevent wildfires.

California’s largest investor-owned utility said U.S. District Judge William Alsup’s plan for it to trim branches and inspect and repair thousands of miles of power lines would cost about five times as much as PG&E’s forecast liabilities for wildfires that scorched the state in 2017 and 2018 and would have to be funded by ratepayers.

His extraordinary safety precautions aren’t “feasible” as they would require more than 100 million trees to be removed and more than 650,000 employees to work full time, according to a court filing with PG&E’s response Wednesday. Prosecutors, too, said the proposal may be unworkable, raising questions about whether Alsup went too far with his plan “to reduce to zero the number of wildfires caused by PG&E in the 2019 wildfire season.”

The latest foray by the San Francisco judge is weighing on PG&E as it plans to seek bankruptcy protection by the end of this month amid potential liabilities of as much as $30 billion for wildfires from the last two years. Alsup is overseeing PG&E’s probation for safety violations that led to felony convictions for a previous incident -- the 2010 explosion of one of its gas pipelines, which killed eight people.

PG&E Puts $150 Billion Price Tag on Judge's Aggressive Fire Plan

In a Jan. 9 court order, Alsup said it’s his job to “protect the public from further wrongs” and “promote the rehabilitation of the offender.” His assertiveness was praised by California’s new governor, Gavin Newsom.

PG&E would be subject to criminal sanctions if it fails to meet the new probationary conditions that the judge wants to impose -- including trimming tree branches close to power lines and cutting local electricity supply in high-risk weather conditions.

Both the utility and prosecutors recommended having a court-appointed compliance monitor review the company’s wildfire-mitigation efforts. After the company’s 2016 conviction, the monitor was tasked with making sure PG&E doesn’t violate the terms of its probation and with scrutinizing its business practices more broadly.

“PG&E does not believe the proposed probation conditions are appropriate, and indeed PG&E does not believe it would be appropriate for the court to impose any new probation conditions that may conflict with the laws and regulations with which PG&E must comply,” the company said in its court filing.

The judge has warned that PG&E may face further prosecution from findings that its equipment caused more than a dozen wildfires in 2017 -- although officials haven’t determined the causes of the most destructive and deadliest of the blazes over the past two years, the Tubbs and Camp fires. Alsup also has suggested that PG&E’s uninsulated power lines could be the root of the problem causing wildfires.

Some legal experts said it’s awkward for the company to object to the judge’s plan when it’s so closely aligned with what PG&E said it would do on its own.

After the November fire that leveled the town of Paradise and killed 86 people, the utility pledged precautions similar to what Alsup is calling for, including more careful vegetation management near its electric equipment.

“Only safe operation will be allowed,” Alsup wrote in his Jan. 9 order.

The case is U.S. v. Pacific Gas and Electric Co., 14-cr-00175, U.S. District Court, Northern District of California (San Francisco).

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