For better or worse, California’s largest utility company is here to stay.
Last year, Sonoma County District Attorney Jill Ravitch’s office filed numerous charges against PG&E stemming from damage caused by the October 2019 Kincade Fire, which burned over 77,000 acres over 15 days, triggering the evacuation of over 200,000 North Bay residents. In 2020, CalFire determined that the fire was caused by PG&E’s equipment, however the company was committed to fighting the criminal charges brought by Ravitch’s office.
Then, on Monday, April 11, Ravitch announced she had reached a deal to end her case against PG&E, northern California’s massive, investor-owned utility with a lengthy criminal record.
The utility agreed to a pay out and oversight, with no admission of guilt. In exchange, Ravitch dropped criminal charges against the company. On the same day, prosecutors in five counties affected by the 2021 Dixie Fire also announced similar agreements with PG&E.
Under the agreements, PG&E will pay $35 million to a variety of nonprofits in the fire-impacted communities over the next five years. They will also hire 80-100 additional PG&E workers in Sonoma County and provide funding for the Santa Rosa Junior College’s Fire Technology Program and a new utility vegetation management training program.
Most importantly, according to Ravitch, PG&E will be placed under court oversight and pay for an independent company to monitor the company’s wildfire safety work in Sonoma County. All told, the settlements announced are expected to cost PG&E $55 million over the next five years.
While acknowledging the deal would be criticized as inadequate, Ravitch said it was the “best we could [do] under the circumstances,” with the current laws on the books. Ravitch argued that settling now led to a higher payout from the company and would allow fire victims to close their insurance claims sooner.
In a statement following the announcement of the settlements, PG&E CEO Patti Poppe said “We respect the leadership of the local DAs, welcome the new level of transparency and accountability afforded by these agreements, and look forward to working together for the benefit of the communities we collectively serve.”
All of this seems mighty familiar.
In January, PG&E was allowed to exit federal probation for its role in the 2010 gas line explosion in San Bruno which killed eight people. Judge William Alsup, who supervised the company through its five-year probation period, penned an eight-page statement about the United States Attorney’s decision not to request an extension of the probation period, despite signs that the company would “emerge from probation as a continuing menace to California.”
“While on probation, PG&E has set at least 31 wildfires, burned nearly one and one-half million acres, burned 23,956 structures, and killed 113 Californians,” Alsup wrote.
In March, the California State Auditor released a report finding that the state’s oversight of utilities’ wildfire safety work has been severely lacking. The report found that utilities are not doing fire safety work fast enough in high-risk areas and the California Public Utilities Commision, which regulates PG&E, “has not used its authority to penalize utilities when its audits uncover violations” in utilities’ wildfire mitigation work.
With so much public animosity towards PG&E and evidence that state regulators aren’t doing enough to keep the company in check, Ravitch did not have an enviable job.
In an effort to explain her decision making, she compared her settlement to previous wildfire cases involving PG&E and called out the decisions of other Californian politicians.
At one point, Ravitch compared her decision to reach a financial settlement with the outcome of the criminal case in Butte County following the November 2018 Camp Fire. In that case, PG&E pled guilty to 84 counts of involuntary manslaughter and paid a $3.5 million fine.
“Is [the settlement] perfect? Absolutely not. But I was not going to end up like [District Attorney] Mike Ramsey up in Butte County listening to the CEO admit responsibility for 84 deaths and then simply paying a fine and walking away. That was not justice in my opinion,” Ravitch said.
Still, the latest $55 million settlement is a small cost for PG&E. In fiscal year 2021, PG&E reported annual revenues of nearly $21 billion. Patricia Poppe, the company’s fifth CEO in five years, was paid $51.2 million in 2021, mostly in stock options.
And, Ravitch’s decision to drop charges before a full trial means that some evidence about the PG&E’s role in starting the fire may never become public.
During the press conference, Ravitch, who is retiring after her current term, also critiqued other public officials, including Governor Gavin Newsom, the state legislature, and state Attorney General Rob Bonta.
“I’m just a prosecutor in Sonoma County. I mean, if I had a magic wand and I could wave it, maybe PG&E wouldn’t exist anymore. But Governor Newsom has decided that PG&E is going to continue. So we’re going to continue to deal with PG&E in our community and this is the best way we could find to deal with PG&E and whatever impact their actions will have on us going forward,” Ravitch said, apparently referring to the Newsom’s decision not to take the company public in 2019 while it’s stock price plummeted.
Next on the docket was the state legislature. Ravitch suggested that, if lawmakers strengthened the penalties for utilities failing to complete required work, local prosecutors could more effectively hold the company accountable with larger fines or place PG&E under probation without the company’s agreement, an option that Ravitch says is not currently possible.
Ravitch also called out the top prosecutor in the state, Attorney General Rob Bonta. Bonta’s office, Ravitch said, had not offered any assistance to the local prosecutors facing off against PG&E. Why Bonta’s office did not help isn’t clear, however, it seems that Ravitch never actually reached out and directly asked for help. Instead, she was expecting Bonta to proactively offer assistance.
“In the past, if the attorney general has an interest in a case, the attorney general will step in and take it over and I think it’s fair to say that didn’t happen here. And it should (have) in my opinion,” Ravitch said at the April 11 press conference. When asked about this, a spokesperson for Bonta told a Marketplace reporter that Ravitch never specifically requested assistance.
No matter who is ultimately to blame—Spoiler: It’s a systemic issue—the latest settlement won’t solve all of PG&E’s problems overnight.
In his January letter, Judge Alsup estimated that it will take PG&E at least another seven years to adequately clean up all of the hazardous trees and vegetation in its coverage area, after neglecting to complete the legally-required work for decades.
