PG&E Ordered to Prove New Board Is Fit to Serve

SACRAMENTO, Calif. (CN) – Seeking bankruptcy and scrambling to complete a $1.3 billion state-mandated wildfire prevention plan, Pacific Gas & Electric will now have to prove that its newly hired directors are fit to transform the mega-utility blamed for starting the 2018 Camp Fire in Northern California.

The California Public Utilities Commission on Thursday opened an investigation into PG&E’s hiring of new board of directors and ordered the utility to show they have experience managing corporate safety programs.

Commission president Michael Picker said that while the new members have “impressive resumes,” it’s not clear they have the safety experience or time to manage the overhaul of a publicly traded utility facing an estimated $30 billion in wildfire liabilities.

“The corporate governance of PG&E really demands the whole attention of qualified people,” Picker said at a commission hearing in Sacramento. “We really have to dig beyond [PG&E’s] assertions and dig deeper and find out who’s making decisions, how qualified they are and whether we have the right leadership at PG&E.”

The utility contends its new board members are more than qualified to serve.

“PG&E Corporation board’s nominating and governance committee explicitly added safety expertise to the variety of experience and skills we require for our directors. The directors include industry leaders who have dedicated their careers to safe and reliable utility service – including as federal and state regulators, and as board members and executive officers of other energy companies,” said PG&E spokesperson John Kaufman in an email.

PG&E has seen a cascade of management-level changes following the deadly November 2018 Camp Fire that burned more than 18,000 buildings and ruined the town of Paradise. State regulators officially blamed the cause of the catastrophic fire that killed 85 people on PG&E’s faulty power lines last month.

Former CEO Geisha Williams jumped ship shortly before PG&E filed for bankruptcy in San Francisco and has since been replaced by Bill Johnson, former head of the Tennessee Valley Authority. In April, PG&E announced it was bringing in 10 new people for its board of directors, replacing all but three of the old members.

Many state lawmakers and Gov. Gavin Newsom have been skeptical of the additions, citing the new members’ ties to Wall Street.

“The bottom line is PG&E’s board needs to be laser focused on safety,” said Sen. Bill Dodd, D-Napa and a member of the state Senate Energy, Utilities and Communications Committee. “Ensuring that the board members have adequate experience and focus on this is a must.”

Now the embattled utility will have 20 days to produce information to the commission regarding the safety training and qualifications of each its board members. Under the commission’s order, PG&E will also have to submit non-confidential minutes from future board meetings and relay any safety training given to board members.

Additionally, the order creates a new advisory panel of experts that will advise the commission on corporate governance issues.

The commission believes the additional reporting and new panel will finally drive home the point to PG&E that its safety failures come with deadly consequences.

“Traditional approaches – fines, sanctions, other remedies – simply haven’t been enough to deter wrongdoing by PG&E and transform its culture into a strong safety culture,” said commission member Clifford Rechtschaffen. “We need new ideas, expertise and new approaches and this decision helps along that way.”

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