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PG&E, Prosecutors Urge Judge to Pause New Probation Terms

SAN FRANCISCO (CN) - In an unexpected twist, federal prosecutors on Wednesday sided with the embattled utility giant Pacific Gas and Electric in urging a federal judge to hold off on imposing new wildfire-prevention conditions on California's largest utility company. 

Responding to U.S. District Judge William Alsup's Jan. 9 order regarding new probation terms, U.S. Attorney Hallie Hoffman implored the judge to let a court-appointed monitor review the proposed conditions before they become final.

"As a threshold matter, the government does not believe the record supports imposition of the proposed conditions as they are currently drafted," Hoffman wrote in her 7-page response to Alsup's order.

PG&E went further in attacking the proposed conditions as fiscally impossible and potentially dangerous. In a long-winded response, the utility insisted that complying with the proposed requirements will cost between $75 billion to $150 billion, which it says is more than it can afford.

"Simply put, the resources required to comply with the proposed modifications do not exist," PG&E attorneys Richard Schar and Kate Dyer wrote in a 60-page filing. "PG&E does not have the necessary funds."

Alsup had proposed that PG&E start re-inspecting its electrical grid, trimming or removing all trees near its power lines, and de-energizing some power lines during high wind events, among other fixes.

PG&E insists that complying with those terms could result in unintended consequences, such as obstructing maintenance operations during required power outages. The utility says agencies like the Federal Energy Regulatory Commission and California Public Utilities Commission possess the expertise needed to weigh competing policy interests and craft new regulations.

According to the utility giant, a courtroom "is not an appropriate forum to develop the full range of scientific, economic, engineering, and policy judgments that are needed. The solution to these problems is best left to the regulatory arena."

Prosecutors agreed that new probation terms could overlap or conflict with existing or impending regulations, but the U.S. Attorney's Office did not rule out imposing new wildfire-prevention-related terms on PG&E after experts have a chance to review the proposals.

Prosecutors contend the court-appointed monitor expects California's fire prevention and public utility regulators to impose new requirements on PG&E's electrical operations. Hoffman stated that the monitor is in the best position to identify any gaps in the regulatory scheme.

PG&E has been on a five-year probation since January 2017 when a federal jury convicted it of six felonies related to the San Bruno pipeline explosion in 2010. The explosion killed eight people and injured 58. It also destroyed 38 homes.

Found guilty of one count of obstruction and five counts of violating pipeline-safety laws, the terms of its probation bind PG&E not to violate any state, federal or local laws. It also has to establish a new compliance and ethics program and report to a court-appointed monitor.

Last week, Alsup issued a request for comments on his finding that "the single most recurring cause of the large 2017 and 2018 wildfires attributable to PG&E’s equipment has been the susceptibility of PG&E’s distribution lines to trees or limbs falling onto them during high-wind events."

Federal prosecutors stated in their response Wednesday that they agree with the judge’s conclusion, but they cautioned that their assessment was based on redacted reports without the benefit of expert eyes.

Hoffman recommended that the independent monitor and a team of "subject matter experts" review the reports and come to their own conclusions regarding the cause of deadly wildfires.

"PG&E’s role in causing the wildfires is relevant not only to determine whether it has violated its terms of probation, but also to prevent future harm," Hoffman wrote.

This past June, the California Department of Forestry and Fire Protection concluded that 12 wildfires that blazed in October 2017 “were caused by electric power and distribution lines, conductors and the failure of power poles” owned by PG&E.

However, Cal Fire said Thursday neither the utility nor its equipment started the 2017 Tubbs Fire, the second most destructive wildfire in state history. Investigators said that blaze "was caused by a private electrical system adjacent to a residential structure" and cleared PG&E of any wrongdoing.

The responses filed by prosecutors and PG&E come nine days after the utility announced it would declare bankruptcy as it faces $30 billion or more in liability for wildfire damage.

Wildfire victims, some of whom lost homes and all their possessions, now fear they may never recover damages. At a rally in Sacramento Tuesday, attorney Erin Brockovich urged state lawmakers not to let PG&E file for bankruptcy and skirt its legal obligation to compensate wildfire victims.

PG&E said in a statement Wednesday that it has already taken action to reduce wildfire risk, but it also insisted that wildfire prevention is a "complex" issue that requires comprehensive solutions from a wide range of entities.

"While our response raises concerns about the feasibility of the proposed probation conditions, we are committed to complying with all rules and regulations that apply to our work," PG&E spokesman James Noonan said in an email. "We will continue working with regulators, lawmakers and our community partners and across all sectors and disciplines to develop comprehensive, long-term safety solutions for the future."

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