PG&E CEO says burying power lines will make a big difference in curbing power shut-offs

PG&E will unveil plans in February to bury about 10,000 miles of electric power lines across California in a bid to curb wildfire risks in the scarred North Bay region, the utility giant’s chief executive told The Press Democrat Monday.

Patti Poppe said the San Francisco-based company will build upon the efforts of burying almost 100 miles of electric distribution lines by year’s end. That includes 4 miles within Rincon Valley that now allows 11,000 customers to avoid preventive power outages during wildfire season. Projects in other North Bay counties haven’t yet been identified.

“Even 100 miles makes a difference. You know 200, 300, 500, 1,000 miles makes a huge difference in our highest-risk areas,” Poppe said. “We are getting great feedback on our ability to do it at an affordable cost for customers, which a lot of people doubted at first.”

Poppe made the comments as she approaches her one-year anniversary at the helm of the beleaguered power company, whose equipment was found to have triggered many of the 2017 Northern California wildfires, as well as the 2019 Kincade fire.

PG&E agreed to a settlement earlier this month with the California Public Utilities Commission to pay a $125 million fine for a transmission line that Cal Fire determined was the cause of the Kincade fire. The blaze burned across more than 120 square miles in the region and had a far-reaching — estimated $620 million — negative impact on the economy.

Even with such optimism, Poppe could not pinpoint a timetable when the Public Safety Power Shutoffs (PSPS) that have hampered Sonoma County during the past three years will become a local rarity.

She did note the PSPS events have affected fewer PG&E customers in recent years, from 2 million in 2019 to 650,000 in 2020 to 80,000 this year.

“We use it as our tool of last resort. So, we do want it to be rare. And I think the reduction to 80,000 customers — that was over six events — I would describe that as a significant improvement over the previous years,” Poppe said.

“I think the most important thing is that we understand that we can keep people safe and that we have the tools in place to do so.”

An industrial engineer by training, Poppe worked for 15 years at General Motors Corp. before moving to the electricity industry. She most recently served as CEO at CMS Energy, a Michigan public utility that provides electricity and natural gas to most of the state’s residents.

During Monday’s interview, Poppe repeatedly stressed how she brought in a new management team along with a new board to address previous issues that plagued the company, which included filing for bankruptcy in January 2019.

It emerged from bankruptcy last summer under conditions that include paying into a trust fund to help compensate past victims of wildfires.

“We have dedicated our careers, our professional experience, our lives and we've moved our families to come out here to be part of the solution,” she said. “I hope people will be willing to give us a chance to do just that.”

Last month, the company said in a Securities and Exchange Commission filing it expects to take a loss of at least $1.15 billion from this year’s Dixie fire, the second-largest wildfire in California history.

That news again raised new fears among local fire victims that PG&E could slide into another bankruptcy, especially as fire survivors from 2017 could likely fall behind the latest victims from the Dixie fire in such a new proceeding.

“I think the most important thing is our commitment to performance and bringing predictable outcomes,” Poppe said.

She emphasized she has confidence in her management team to turn around the company that has about 23,000 employees, as well as 5.5 million electric and another 4.5 million natural gas customer accounts.

“First and foremost, we’re working to make sure we deliver and keep our promises to our customers and our communities,” she said. “That enables us then to attract capital and invest in the system; and harden the system further; and provide stock valuation that rewards our shareholders, including the fire victim’s trust.”

That will be a tough job locally as PG&E faces a criminal trial next year on five felony and 28 misdemeanor counts filed by Sonoma County District Attorney Jill Ravitch over the health and environmental pollution violations caused by the Kincade fire.

Poppe said she felt confident in the $125 million settlement even as the violations and criminal activity surrounding the Kincade fire are still unresolved, noting the in-depth negotiations the company had with the regulator.

In addition, PG&E paid $31 million earlier this year to Sonoma County and nearby local cities for damages they incurred during the Kincade fire.

“Quality doesn’t have to cost more, so a safe energy system doesn’t have to be too expensive for customers. We can make it affordable for them. I think that settlement was one part of making it right,” she said.

“The rest of our focus is definitely on both making it right and making it safe.”

Some wildfire survivors still have concerns if they will ever be fully compensated through the $13.5 billion victim’s compensation fund because half of it will be paid through PG&E stock itself.

The company has funded nearly $7 billion in cash with the final payment coming next month. But the bigger concern remains with its stock, which has rebounded from a 2021 low of $8.29 per share this summer to $12.27 per share on Monday’s closing.

Poppe tied the fate of the company to the plights of those hit hardest by the wildfires.

“I have to tell you, it's very motivating to me to know that as we perform as a company, then victims can be rewarded. It's a big part of the reason that I came,” she said.

“We feel like we can make a difference in the lives of people and … in the lives of people who have been harmed. Again, we want to make it right.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.