PG&E Sued for Spending on Advertising Instead of Fire Safety

(Bloomberg) -- PG&E Corp. was accused of putting its “reputation above public safety” in a lawsuit alleging that the power company spends too much on advertising and not enough on preventing devastating Northern California wildfires like the one that destroyed the town of Paradise last month.

While the cause of the Camp Fire remains undetermined, residents alleged in a complaint filed Monday that despite spending $37 million since 2015 to promote its commitment to safety through ads, the utility’s “dysfunctional risk assessment methodologies” have failed to improve.

The Camp Fire, the deadliest and most destructive in California history, has put the company under intense scrutiny, especially after fires in the Sierra Nevada foothills of Calaveras County in 2015 and in wine country north of San Francisco last year were linked by investigators to PG&E’s equipment.

Residents who lost loved ones and homes to the Camp Fire have filed lawsuits blaming the utility’s power lines for starting the blaze. PG&E has seen its market value plunge 47 percent amid investor concern that the utility could be on the hook for billions in damages.

The utility is aware of lawsuits regarding the Camp Fire and considers safety to be its highest priority, PG&E said.

“Right now, our focus is on assessing infrastructure, safely restoring power where possible, and helping our customers recover and rebuild,” the San Francisco-based company said in an emailed statement. The utility’s advertising costs are paid for by shareholders and don’t have any effect on customer rates, the company said.

The plaintiffs contend PG&E should focus on upgrading infrastructure and revamping vegetation management. They want a court order blocking company officials from spending profits on advertising to promote a “misleading picture of safety surrounding their operations.”

PG&E Reports Enhanced Wildfire Prevention & Safety Efforts

The Paradise residents are seeking restitution of all money the utility spent on “false advertising” since Sept. 9, 2010, when an explosion of a PG&E natural gas pipeline killed eight people in a city south of San Francisco.

The allegations in the suit, filed in state court in Butte County, range from negligence and public nuisance to violations of California’s business and professions code.

The Utility Reform Network, a public advocacy group that monitors PG&E’s budget, said it hasn’t been able to determine how much PG&E has spent on advertising based on the utility’s filings with state regulators.

“At this point, every time a customer has to see one of those ads it is an insult,” said Mindy Spatt, a spokeswoman for the consumer group. “Instead of trying to convince us that they are a safe company, they should actually be a safe company, then they wouldn’t have to convince us.”

The case is Williams v. Pacific Gas & Electric Co., 18CV03993, California Superior Court, Butte County.

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