PG&E Announces Structural and Safety Changes to Satisfy Regulators

Pacific Gas and Electric unveiled a new bankruptcy plan on Friday that would shake up its board and localize its operations in an attempt to address safety concerns.

Gov. Gavin Newsom rejected the utility’s original bankruptcy plan last December, saying it didn’t address key safety requirements and a promise of reliable service.

The Governor couldn’t be reached for comment. But in mid-January, he said the state would attempt to take over the utility if its new plan doesn’t pass muster. The deadline for PG&E to have a completed bankruptcy plan is June 30.

To address Newsom’s concerns, the revised plan would create new regional divisions, each with its own safety officer and division head who reports directly to the CEO.

The utility said it would also appoint an independent safety advisor when the term for the court-appointed Federal Monitor expires. PG&E said it would also tie executive compensation to safety performance rather than the stock price, something the Governor has called for.

The company’s bankruptcy plan is part of a larger $13.5 billion settlement with thousands of Californian’s who lost homes and businesses in a series of wildfires.

At a California Public Policy Institute event on Wednesday, Newsom spoke frankly about what he thinks PG&E needs to achieve in their bankruptcy plan.

“I have no interest in the existing management and the existing board,” Newsom said. “It has to be a completely transformed company.”

CEO and President of PG&E Bill Johnson said in a statement, “Under our Plan, the company will emerge from Chapter 11 as a re-imagined utility with an enhanced safety structure, improved operations, and a board and management team focused on providing the safe, reliable, and clean energy our customers expect and deserve.”

Still, the company’s changes didn’t address one of Newsom’s key demands in his December rejection of their bankruptcy plan. That is, PG&E must create a set of mechanisms to give up their assets to the state or a third party if their financial situation becomes dire again.