PG&E Probation Judge Threatens to Restrict Manager Bonuses
PG&E Corp. workers look at a map as they prepare to energize power lines in Calistoga, California, U.S. (Photographer: David Paul Morris/Bloomberg)

PG&E Probation Judge Threatens to Restrict Manager Bonuses

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(Bloomberg) -- PG&E Corp. could be ordered by a federal judge to restrict bonuses and incentives for supervisors and other high-ranking employees until the company meets obligations under its wildfire-prevention plan.

As PG&E struggles to prove it can operate safely after a series of devastating wildfires blamed on its equipment, U.S. District Judge William Alsup threatened in a filing Friday to tie incentive pay “exclusively” to meeting goals for fire mitigation and other safety issues. He directed the company to explain in writing by Feb. 12 why he shouldn’t issue such an order.

The bankrupt utility disclosed this month that it had fallen short of some of the commitments it made to inspect and repair lines, clear vegetation and cut tree branches. In response, Alsup has said he may require PG&E to hire and train more crews to inspect and cut trees to come into compliance with state requirements.

Alsup is overseeing PG&E’s criminal probation after the utility was convicted in 2016 of violating gas-pipeline safety standards and obstructing a federal investigation. Alsup imposed new probation conditions to make sure the utility complies with both California law and its own wildfire prevention efforts after investigators found that its lines ignited wildfires in 2017 and 2018.

PG&E said it would respond to Alsup’s order by the deadline. A hearing is scheduled for Feb. 19.

“PG&E shares the court’s commitment to safety and recognizes that we must take a leading role in keeping our customers and communities safe from the ever-growing threat of wildfire,” the company said in a statement.

Last year, the judge overseeing PG&E’s bankruptcy approved an incentive plan that allowed for a maximum payout of $350 million for non-insider employees if they hit certain metrics tied to public safety, gas inspections and financial performance. The bankruptcy court later rejected a PG&E request for executive bonuses.

PG&E filed for Chapter 11 bankruptcy protection in January 2019 after its equipment was blamed for some of the worst fires in California history, crippling it with an estimated $30 billion in liabilities. A probe by state regulators found the utility failure to clear vegetation and trees around power lines contributed to several fires that charred parts of northern California wine country in 2017.

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