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PG&E's criminal probation will be lifted amid safety concerns

SAN FRANCISCO, (AP) -- Pacific Gas & Electric will soon be released from five years of prison probation. However, there are still concerns that the nation's largest utility is too risky to trust after years in devastation caused by wildfires and poor management.

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PG&E's criminal probation will be lifted amid safety concerns

The probation was to end Tuesday at midnight. It was intended to help PG&E recover from its 2016 convictions for six felony offenses stemming from a 2010 explosion triggered its natural gas lines, which exploded in San Bruno killing eight people.

Instead, PG&E has become a more destructive force. The utility is responsible for more than 30 wildfires which have claimed more than 23,000 lives and displaced more than 100 people since 2017.

U.S. District Judge William Alsup stated that PG&E had been on a criminal spree over the past five years and would emerge from probation as a continuing threat to California in a report examining his oversight of the utility.

PG&E pleaded guilty while on probation to 84 felony charges of involuntary murderer for a 2018 wildfire which destroyed Paradise, a town about 170 miles (275 km) northeast of San Francisco. PG&E now faces additional criminal charges in two cases. These are for a Sonoma County wildfire that occurred in 2019 and a Shasta County forest fire in 2020. PG&E denied any criminal wrongdoing during those fires.

There are more criminal charges in the future. California regulators have already linked PG&E with the Dixie Fire, which occurred last year when a tree was believed to have struck the utility's distribution lines. This is part of a vast, rugged territory that covers 16 million Northern Californian customers.

PG&E was also forced to file for bankruptcy during its probation. This was the second time in as little as 20 years. PG&E settled more than $25.5 billion in settlements before it emerged from bankruptcy last year. This included $13.5 billion for wildfire victims who may not receive the full amount originally promised.

Mark Filip, a court-appointed monitor for PG&E, raised alarms about the utility’s wildfire prevention efforts. However, he praised the utility's "sustained" and "substantial" improvements in natural gas operations.

Filip's team submitted a report to Alsup last year that stated, "We doubt anyone would seriously argue PG&E has performed adequately or that substantial improvement are not still necessary."

PG&E, a 117-year-old company, generates about $20 billion in revenue annually while serving a 70,000-square-mile (181,300-square-kilometer) service area in the northern and central part of California that includes farmland, forests, big cities and the world's technology hub in Silicon Valley.

Alsup, who repeatedly criticized PG&E's probation last year, indicated that he was interested to keep the utility under his control. He dropped the idea after the U.S. Attorney's Office filed documents stating that it did not plan to extend PG&E's probation. They cited the "unique circumstances" in the case.

Alsup stated in his final report that he had tried to rehabilitate PG&E. "As the supervising judge of district, however, I have to admit failure."

Alsup declined The Associated Press' interview request to discuss his concerns regarding PG&E.

Catherine Sandoval is a Santa Clara University energy professor and a former California regulator. She believes Alsup was too hard on herself, but she also agrees that PG&E hasn’t proved it shouldn’t be under supervision. According to the U.S. Attorney's report, she blames federal prosecutors who backed off an attempt at extending PG&E's probation. "There appears to be no binding law on this subject."

Sandoval stated that PG&E was the best test case to determine if a company's probation could be extended. In a 58-page brief filed earlier this month with Alsup, Sandoval unsuccessfully tried to hold a hearing to extend utility's probation.

Noah Stern, the federal prosecutor who is responsible for PG&E's probation was unable to respond to a request.

While acknowledging its shortcomings, PG&E stated in a report to a judge that its electricity grid was "fundamentally more secure" than it was in January 2017. It also supported the approximately 40,000 contractors and employees who manage its operations.

"Vilifying them, threatening to penalize the exercise of professional judgement or the making honest mistakes serves neither safety or fairness and instead severely detracts PG&E’s efforts to bring together the skills of the brightest to bear on preventing wildfires," PG&E lawyers wrote. "We all are in this together."

PG&E cited more than 3.3million trees that had been trimmed or removed within the last two years as a sign of its progress.

According to the utility, it now spends $1.4B annually to trim or remove trees. This is up from $400M annually in 2017. Alsup said that PG&E still has a seven year backlog of high-risk trees which need to be removed or trimmed.

The company also mentioned a complete overhaul of its board, management, and the appointment of Patricia Poppe as its CEO last year. Poppe, a former Michigan utility executive became PG&E’s fifth CEO in five year. This is part of an unusually high turnover that, according to the federal monitor, makes reform more challenging.

Alsup was told by PG&E's lawyers that "we know there is more we can do." These are more than words on a paper or a poster. They are a commitment that will make Californians safer and help them get it right.

PG&E declined to comment further on the expiration of its probation.

Sandoval, who served as a California Public Utilities Commission commissioner from 2011 to 2017, was one of the regulators responsible for PG&E's oversight. He accused PG&E of having a pattern "cognitive immaturity and lazy thinking" that should have led to its board and executives being required to undergo counseling.

Sandoval stated that PG&E, the Corporation, requires the training that a criminal defendant would have received while in prison to break the cycle criminal thinking that threatens public safety.

Filip also suggested that California adopt new regulatory approaches or changes to keep PG&E under control in a separate report.

Federal monitor warned that in PG&E service territory, one mistake -- a missed hazard or failure to replace corroded power lines hardware -- could lead to "death and ruin."

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