The Wall Street Journal reported yesterday that California utility PG&E (Pacific Gas and Electric) knew that their power lines were outdated and dangerous and did nothing to repair them. According to the Journal, “the company knew that 49 of the steel towers that carry the electrical line that failed needed to be replaced entirely.” Documents obtained under the Freedom of Information Act (FOIA) also showed that PG&E knew that its oldest towers had a life expectancy of around 65 years but were more than 100-years-old.
This scathing report comes on the heels of a completed investigation by fire officials in California, who concluded that last year’s camp fire was conclusively caused by faulty power lines owned by PG&E. The horrific fire killed 85 people and destroyed the town of Paradise. Fire officials in California have called it the “deadliest and most destructive” fire in the Golden State’s history. “After a very meticulous and thorough investigation, CAL FIRE has determined that the Camp Fire was caused by electrical transmission lines owned and operated by Pacific Gas and Electricity (PG&E) located in the Pulga area,” fire officials noted.
In an effort to relieve itself from billions in liabilities totaling over $30 billion as a result of catastrophic wildfires in both 2017 and 2018, PG&E announced that it was filing for bankruptcy in January of 2019. Despite seeking court approval for $5.5 billion in debtor’s financing, the utility claimed that it still intends to pay suppliers for their services. PG&E further stated that customers would not suffer and that they would continue to provide “safe natural gas and electric service.” PG&E is one of the largest utilities in the nation, employing approximately 24,000 full-time employees and servicing over 10 million customers.
While PG&E has admitted some wrong doing, the company has not taken responsibility for the fires. “We understand and recognize the serious concerns raised about our infrastructure,” said Sumeet Singh,Vice President of the Community Wildfire Safety Program for PG&E. “We acknowledge that while we’ve made progress, we have more work to do.”
This is not the first time that PG&E has had to file bankruptcy. Following a prolonged drought in California in the summer of 2001, there was a severe reduction in the amount of hydroelectric power available to utilities. In addition, especially high temperatures led to higher electrical usage by consumers, which led to rolling blackouts. Having little electricity generation capacity of its own, PG&E was forced to buy electricity from out of state suppliers who charged exorbitant prices for power. After an attempt to raise rates in order to fund the increased costs was blocked by the California Public Utilities Commission (CPUC), PG&E began to lose cash at an alarming rate. The company filed for bankruptcy in April of 2001 and eventually was bailed out by both the State of California and several private creditors. It is estimated that the state lost between $40 and $45 billion during the crisis and PG&E was eventually forced to pay over $10 billion to hundreds of private creditors. PG&E’s customers are still paying above-market prices to cancel the debt incurred during this crisis.
What do our readers think about the current PG&E crisis? Anyone in California care to chime in on their dealings with the company? We would love to hear from you in the comments section below.
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