California Public Utilities Commission’s Independent Watchdog Recommends $166 Million Fine Against Pacific Gas & Electric (R 18-12-005)

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By Tristan Stidham

On October 30, 2020, the Public Advocate’s Office (PAO), the consumer protection watchdog of the California Public Utilities Commission (CPUC), recommended a $166 million fine against Pacific Gas & Electric (PG&E) for failing to warn customers of multiple intentional power outages in October and November 2019.

The recommendation was filed in a brief before the CPUC as part of its ongoing Order Instituting Rulemaking to Examine Electric Utility De-Energization of Power Lines in Dangerous Conditions (R.18-12-005). The proceeding pertains to power outages or shutoffs that came during a spate of weather combining dry heat with high winds. The shutoffs were meant to prevent wildfires, which could be sparked by a downed PG&E power line. Customers across 38 counties were affected, with some being without electricity for up to one week. In addition, during the blackouts, customers overwhelmed PG&E’s website and call centers seeking information. [24:2 CRLR 198–200]

The PAO arrived at the $166 million figure by assessing $101,290,000 for failure to inform “Medical Baseline Customers” (customers who need electricity in order to power life-sustaining treatments); $15,300,000 for PG&E’s failure to inform “Public Safety Partners,” such as hospitals and emergency responders; $7,639,000 for “repeated failures to inform Customers, previously not notified”; and $41,513,000 for “failures associated with PG&E’s unavailable website.”

In its brief, the PAO notes that Investor Owned Utilities (IOUs) such as PG&E do have the ability to implement shutoffs in emergency situations under Public Utilities Code section 451.  However, the PAO notes that in order to comply with section 451, IOUs must give as much notice as possible to customers and partners. Further, IOUs could “remain liable for power interruptions that are initiated at wind speed conditions below the requirements set forth in General Order 95.” The PAO claims that PG&E failed to meet these minimum standards.

PG&E responded with its own brief, in which it claimed that climate change was causing increased and never-before-seen fire risks, which the company and state were still adapting to.  PG&E further claims to have undertaken “a months-long process to educate, prepare, and support the company’s customers and communities, beginning long before the events of October 2019.” PG&E says these efforts included notifying “over 97% of the population affected by the events in question.”

In addressing claims about its website, PG&E asserts that though the website was overwhelmed by traffic during the October 9–12, 2019 shutoff due to the unprecedented nature of the events, it had the site ready in preparation for larger shutoffs during October 26–November 1, 2019. PG&E further stated that it is cooperating fully with regulators and seeking to learn from its mistakes, thus, penalties “in the context of unprecedented events in California or elsewhere, would serve little purpose.” Additionally, PG&E has already credited customers over $86 million for these issues.

The PAO’s recommendation comes after PG&E similarly shut off power to nearly 360,000 customers in October of 2020.  This occurred during similar conditions in Northern California arising from strong winds and warm, dry weather.

Implementation of the penalty would require the approval of the judge overseeing proceedings against PG&E and the five members of the CPUC. According to the CPUC’s September 21, 2020 ruling setting a procedural schedule in this matter, the Presiding Officer’s Decision must be submitted within 60 days of the submission of the briefs, the last of which is due November 17, 2020.

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