PG&E CEO Says

The Wall Street Journal

Business

By Katherine Blunt

PG&E CEO Says 

It Could Impose Blackouts in California for a Decade

Bill Johnson makes the disclosure in a hearing at which California officials blast PG&E’s shutoffs this month

PG&E Corp.’s chief executive said Friday that it could take as long as 10 years for the company to improve its electric system enough to significantly diminish the need to pull the plug on customers to reduce the risk of sparking fires.

Bill Johnson, who joined the company in May, made the disclosure at a California Public Utilities Commission hearing where the panel’s president, Marybel Batjer, sharply criticized the company’s “inadequate execution” of a shut-off in which it turned off power to large portions of Northern California for more than two days last week.

The commission convened an emergency meeting to examine PG&E’s handling of the massive blackout, which left roughly two million people in the dark and created widespread havoc from the Bay Area to the northern reaches of the state. Several of the company’s top executives were summoned to detail the problems and take questions from regulators.

“I can tell you that you guys failed on so many levels on fairly simple stuff,” Ms. Batjer said.

The agency earlier this week ordered PG&E to address numerous problems with its strategy for such blackouts, known as public safety power shut-offs. It condemned the company’s failure to provide maps and other critical information to residents and local officials ahead of the shut-off. PG&E’s website crashed for two days during the blackout, and its call centers were overwhelmed.

Mr. Johnson on Friday apologized for the hardships caused by the shut-off but defended the company’s decision to implement it, noting that none of its power lines sparked fires, even though strong winds in certain areas caused damage to its system.

“Making the right decision on safety is not the same as executing that decision well,” he said. “PG&E has to be better prepared than it was this time.”

PG&E, which provides gas and electricity to 16 million people, shut off the power to more than 700,000 homes and businesses in anticipation of strong winds that could have increased the chances of its power lines sparking fires. The company’s equipment has sparked 19 major fires during windy periods in 2017 and 2018, mostly because vegetation blew into live wires.

PG&E isn’t the only California utility to deploy shut-offs to mitigate wildfire risks. Edison International’s Southern California Edison and Sempra Energy’s San Diego Gas & Electric also cut power recently in response to windy conditions. But PG&E is the only U.S. utility to have initiated a weather-related blackout on such a large scale.

The decision drew the ire of legislators and local officials who have called on PG&E to act more prudently in enacting future shut-offs. A group of Northern California governments, including Napa and Sonoma counties, on Thursday filed a scathing brief with the utilities commission that berated PG&E for its lack of preparedness.

“The experience of working with PG&E to effect real changes to its de-energization program has been like battling the Hydra,” it read. “This has got to stop.”

For now, the shut-offs will continue as PG&E scrambles to trim trees near power lines and upgrade equipment across its 70,000-square-mile service territory, after a protracted drought this decade turned millions of acres of forest into a tinderbox.

Another major fire tied to PG&E’s equipment would likely drive the company to insolvency. It sought bankruptcy protection in January, citing more than $30 billion in liability costs stemming from the 2017 and 2018 fires, which collectively killed more than 100 people.

At the meeting Friday, commissioners questioned the company’s commitment to its customers and how long it anticipates deploying its shut-off strategy on such a large scale.

Mr. Johnson said the utility is working to limit the scope of future shut-offs by trimming more trees and installing technology to enable the shutdown of smaller, more targeted portions of the grid. But he estimated it will take as long as a decade before its shut-offs will have “ratcheted down significantly.”

“I think they’ll decrease in size and scope every year,” he said. “But at the same time we’re doing this the risk is not static, it’s dynamic and it goes up every year.”

Already, PG&E is behind on several of its most important safety efforts, records show, including this year’s tree-trimming campaign, which is less than 50% complete. It also trails its peers in technology to track winds and isolate the areas where equipment is at highest risk of sparking fires.

Though the company warned of continued shut-offs, it is working to limit their duration.

Michael Lewis, PG&E’s senior vice president of electric operations, said the company, which previously advised customers to prepare for shut-offs lasting as long as five days, will work to restore power within 48 hours after initiating a shut-off.

“We now recognize that five days as a benchmark is unacceptable,” he said.

Write to Katherine Blunt at Katherine.Blunt@wsj.com