CORRECTING and REPLACING PG&E Submits Comprehensive, Multi-Party Settlement Agreement to CPUC Related to 2017 and 2018 Wildfi...
18 December 2019 - 12:59PM
Business Wire
Settlement Agreement Prohibits Company from
Seeking $1.625 Billion in Wildfire-Related Costs from Customers
Proposes PG&E Shareholder-Funded Payments
of $50 Million for System Enhancements
Third paragraph, first sentence should read: The settlement
agreement was reached in collaboration with the CPUC’s Safety
Enforcement Division (SED), the Coalition of California Utility
Employees, and the Office of the Safety Advocate. (instead of: The
settlement agreement was reached in collaboration with the CPUC’s
Safety Enforcement Division (SED), the Coalition of California
Utility Employees, the Office of the Safety Advocate, and the
Public Advocates Office.)
The corrected release reads:
PG&E SUBMITS COMPREHENSIVE, MULTI-PARTY
SETTLEMENT AGREEMENT TO CPUC RELATED TO 2017 AND 2018
WILDFIRES
Settlement Agreement Prohibits Company from
Seeking $1.625 Billion in Wildfire-Related Costs from Customers
Proposes PG&E Shareholder-Funded Payments
of $50 Million for System Enhancements
Today, Pacific Gas and Electric Company (PG&E or the
Utility) submitted a comprehensive, multi-party settlement
agreement to the California Public Utilities Commission (CPUC)
related to 2017 and 2018 wildfires in Northern California.
Earlier this month, the CPUC approved a decision to include the
2018 Camp Fire in the existing 2017 Northern California Wildfires
Order Instituting Investigation (Wildfire OII).
The settlement agreement was reached in collaboration with the
CPUC’s Safety Enforcement Division (SED), the Coalition of
California Utility Employees, and the Office of the Safety
Advocate. It proposes that PG&E pay $50 million for
shareholder-funded system enhancements, specifically on the
company’s electric transmission and distribution system. It also
proposes that PG&E not seek customer rate recovery associated
with certain wildfire-related costs in the amount of $1.625
billion.
PG&E has been working toward a comprehensive settlement
agreement involving several parties since August 2019 and has been
holding frequent discussions with all parties. This settlement
agreement would allow for additional investments that will further
strengthen the company’s electric operations and ensure compliance
with applicable rules.
“We remain deeply sorry about the role our equipment had in
tragic wildfires in recent years, and we apologize to all those
affected. None of us wants to see another catastrophic wildfire in
the communities we call home. This settlement agreement underscores
our commitment to learning from the past and doing what’s right for
safety in the future,” said Bill Johnson, CEO and President,
PG&E Corporation.
“We recognize our fundamental obligation to operate our system
safely. We share the same objectives as the Commission and other
state leaders – namely in reducing the risk of wildfire in our
communities, even in a rapidly changing environment. While we have
taken unprecedented actions to do so, we recognize that more must
be done.”
This proposed multi-party settlement agreement is separate from
other major financial commitments announced by the company
pertaining to the 2017 and 2018 wildfires, including:
- Reaching a settlement agreement with representatives of
individual wildfire victims for $13.5 billion;
- Announcing an $11 billion settlement to resolve all insurance
subrogation claims arising from the 2017 Northern California
wildfires and 2018 Camp Fire;
- Announcing a $1 billion settlement with cities and counties
impacted by the 2017 Northern California wildfires and 2018 Camp
Fire; and
- Establishing a $105 million Wildfire Assistance Fund to aid
those displaced by the 2017 Northern California wildfires and 2018
Camp Fire who are either uninsured or need assistance with the cost
of substitute or temporary housing or other urgent needs;
System Enhancements
The Wildfire OII settlement agreement, as described in today’s
filing, prohibits PG&E from seeking rate recovery of certain
wildfire-related expenses and capital expenditures totaling $1.625
billion, and requires PG&E to undertake 21 shareholder-funded
system enhancements totaling $50 million, including:
- Developing a vegetation management oversight pilot;
- Instituting a tree crew training and certificate program;
- Instituting a pre-inspector training and certificate
program;
- Hiring an independent wildfire safety auditor;
- Conducting safety town halls with the public led by PG&E’s
officers;
- Quarterly public reporting on electric maintenance work;
- Local government vegetation management and system hardening
data sharing; and
- Accelerating commercialization of non-diesel temporary
generation
The proposed settlement will be reviewed by the assigned
Administrative Law Judge and/or the assigned Commissioner, and is
subject to CPUC approval. Other parties that did not join the
settlement will have an opportunity to provide comments before a
final CPUC decision is issued. PG&E has requested that the CPUC
approve the settlement on an expedited basis by the end of February
2020.
Overall Wildfire Risk Reduction
In addition to the terms of the settlement, PG&E has taken
and continues to take critical actions to strengthen its electric
operations and vegetation management processes and culture,
including:
- Creating and executing a Wildfire Safety Inspection Program in
which the company inspected all of its transmission, distribution
and substation equipment in high fire threat areas in 2019.
Throughout the inspection process, PG&E has been addressing and
repairing conditions that pose an immediate safety risk as they are
identified, while completing other high-priority repairs on an
accelerated basis.
- Conducting enhanced vegetation management, including meeting
and exceeding important state standards regarding clearances around
power lines in high fire-threat areas.
- Improving the quality of training programs and clarifying the
required qualifications for PG&E’s contracted vegetation
management personnel.
- Conducting system hardening and resiliency, including replacing
wood poles with more resilient poles, replacing bare overhead
conductor with covered conductor, targeted undergrounding, and
establishing temporary microgrids.
- Revising distribution design standards to increase overall
strength and mitigate against impacts of external contacts (such as
contact with vegetation) of approximately 150 circuit miles by the
end of 2019. PG&E will continue mitigation efforts in other
high fire-risk locations across its service area over the next
decade.
- Appointing new leadership throughout the company, including a
new Board, new Corporation and Utility CEOs, and new leaders in
electric operations.
Visit PG&E’s Community Wildfire Safety Program website for
more information about PG&E’s ongoing and expanded efforts to
further reduce wildfire risks and keep its customers and
communities safe.
About PG&E
Pacific Gas and Electric Company, a subsidiary of PG&E
Corporation (NYSE:PCG), is one of the largest combined natural gas
and electric energy companies in the United States. Based in San
Francisco, with more than 20,000 employees, the company delivers
some of the nation’s cleanest energy to 16 million people in
Northern and Central California. For more information, visit
www.pge.com and www.pge.com/news.
Forward-Looking Statements
This press release contains forward-looking statements that are
not historical facts, including statements about the beliefs,
expectations, estimates, future plans and strategies of PG&E
Corporation and the Utility, including but not limited to the
timing of the shareholder-funded system enhancement spending. These
statements are based on current expectations and assumptions, which
management believes are reasonable, and on information currently
available to management, but are necessarily subject to various
risks and uncertainties. In addition to the risk that these
assumptions prove to be inaccurate, factors that could cause actual
results to differ materially from those contemplated by the
forward-looking statements include factors disclosed in PG&E
Corporation and the Utility’s joint Annual Report on Form 10-K for
the year ended December 31, 2018, their joint Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and
September 30, 2019, and their subsequent reports filed with the
Securities and Exchange Commission. Additional factors include, but
are not limited to, those associated with the voluntary cases
commenced by each of PG&E Corporation and the Utility under
Chapter 11 on January 29, 2019. PG&E Corporation and the
Utility undertake no obligation to publicly update or revise any
forward-looking statements, whether due to new information, future
events or otherwise, except to the extent required by law.
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