PG&E puts cost of judge’s wildfire plan at up to $150 billion

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SAN FRANCISCO (Reuters) – California power company PG&E Corp, which expects to soon file for bankruptcy, said on Wednesday it would cost between $75 billion and $150 billion to fully comply with a judge’s order to inspect its power grid and remove or trim trees that could fall into power lines and trigger wildfires.

PG&E said in a filing in U.S. District Court in San Francisco that it could not on its own afford the work proposed in a Jan. 9 order by U.S. District Judge William Alsup, who is overseeing conditions of the company’s probation following a 2010 gas pipeline explosion.

To pay for the proposed work, PG&E said it would have to pass the bill to ratepayers who get their power from the utility company’s nearly 100,000 miles (161,000 km) of overhead lines in northern California.

“PG&E would inevitably need to turn to California ratepayers for funding, resulting in a substantial increase – an estimated one-year increase of more than five times current rates in typical utility bills,” the company said.

PG&E, which provides electricity and natural gas to 16 million customers in northern and central California, is facing widespread litigation, government investigations and liabilities that could top $30 billion following fatal wildfires in 2017 and 2018.

On Tuesday, PG&E said it had secured $5.5 billion in financing from four banks as it prepares to file for Chapter 11 bankruptcy on or about Jan. 29.

The utility on Wednesday estimated it would have to remove 100 million trees or more to safeguard power lines, a campaign that would face “myriad legal obstacles to reconfiguring the California landscape,” as it would require contending with state and federal agencies as well as private property owners.

A proposal to restrict using power lines deemed unsafe during high winds is not feasible because lines traverse rural areas to service urban zones, while “de-energization” of lines could also affect the power grid in other states, PG&E said.

State Senator Bill Dodd questioned PG&E’s filing, underscoring the frustration of many California policymakers after they approved legislation last year to let utilities recover some of the costs related to wildfires in 2017 and others starting in 2019.

The legislation, which critics called a bailout, did not make provisions for fires last year and it was approved before November’s Camp Fire, the deadliest and most destructive wildfire in California’s history.

“PG&E’s mismanagement and lack of credibility casts doubt over anything they put forward,” Dodd told Reuters in an email. “The company can and must do more to ensure safety, and I expect the court and regulators will make that happen.”

In separate court papers citing concerns about the complexity of regulations around PG&E’s power transmission, the U.S. government recommended a court-assigned monitor review Alsup’s proposals and consult with relevant agencies to reach “workable” terms for the company.

The government said the monitor is “in the best position to determine whether wildfires can be prevented by fixing gaps in the currently regulatory scheme, or by improving PG&E’s compliance with current regulations.”

While PG&E questioned the judge’s proposals, the company said it has no issue with the monitor checking its efforts to mitigate wildfire risks.

Alsup’s order would modify terms of PG&E’s probation. He will hold a hearing on the new terms on Jan. 30.

Reporting by Jim Christie; editing by Richard Pullin

Our Standards:The Thomson Reuters Trust Principles.

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