SAN FRANCISCO (CN) – Amid power outages affecting 179,000 customers – and another one coming that could affect nearly 900,000 – Pacific Gas and Electric executives were hit with a federal class action Friday claiming they misled investors about the company's preparedness for pre-emptive blackouts.
The complaint accuses PG&E CEO William "Bill" Johnson and three former and current executives of making false and misleading statements about the company's wildfire safety efforts and readiness for fire-prevention power cuts.
"PG&E’s purportedly enhanced wildfire prevention and safety protocols and procedures were inadequate to meet the challenges for which they were ostensibly designed," the 33-page complaint states. "As a result, PG&E was unprepared for the rolling power cuts the company implemented to minimize wildfire risk."
According to the lawsuit, the "truth emerged" on Oct. 12 after a New York Times expose revealed new details of PG&E's ill preparedness for widespread power outages affecting 738,000 customers in 35 counties between Oct. 9 and 10.
The company faced tough questions from state regulators over the blackout blunders last week. PG&E's top executives and board members faced complaints of poor planning, insufficient coordination with local governments, a downed website, an overwhelmed call center and a failure to set up emergency resource centers in affected communities, among other problems.
The company's stock price tanked $0.35, or 4.4%, on Oct. 12, followed by a $1.00, or 12.2%, tumble on Oct. 24 after the company announced plans to cut power to 179,000 homes and businesses.
Other defendants named in the lawsuit include former CEO Geisha Williams, who left the company in January 2019, and former interim CEO John R. Simon, who served from January to May 2019. PG&E's current chief financial officer, Jason Wells, is also named as a defendant.
"The individual defendants possessed the power and authority to control the contents of PG&E’s SEC filings, press releases, and other market communications," the complaint states.
The complaint cites 14 press releases issued between Dec. 11, 2018, and Oct. 11, 2019, that contained "materially false and misleading" statements about the company's safety protocols and preparedness for power outages.
Lead plaintiff Christopher Vataj seeks class certification, damages and attorneys' fees. He is represented by Jennifer Pafiti of Pomerantz LLP in Los Angeles.
PG&E did not immediately return a phone call seeking comment Friday afternoon.
On Friday afternoon, the utility announced another round of dry windy weather forecast to blow into Northern California beginning Saturday night could mean more pre-emptive blackouts to about 850,000 customers in 36 of California’s 58 counties.
If it occurs, it would be PG&E’s largest planned shutoff so far.Follow @NicholasIovino
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