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In 2017, PG&E was fined for a fire in 2015. In 2017, they were implicated in 17 wildfires that killed dozens. All on her watch. The CEO does nothing to address

In 2017, PG&E was fined for a fire in 2015. In 2017, they were implicated in 17 wildfires that killed dozens. All on her watch. The CEO does nothing to address the risk. Now she resigns, and: PG&E is planning to award her a perhaps less-than-golden parachute that could range from $2.36 million to $4.46 million, depending on how her departure is categorized Step 1: devastate the company you're in charge of. Step 2: collect millions. https://www.bloomberg.com/news/articles/2019-01-14/pg-e-s-former-ceo-to-walk-away-with-millions-after-wildfires https://www.bloomberg.com/news/articles/2019-01-14/pg-e-s-fo...

bleriot 8y ago
Par for the course for a company that “illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses” according to the state.
- toomuchtodo 8y ago
  Any chance California is going to claw that money back and execs face criminal charges?
  - lisper 8y ago
    I'll give long odds against.
  - gamblor956 8y ago
    Small chance for the former, but essentially no chance for the latter.
  - Ar-Curunir 8y ago
    This is a neoliberal capitalist country we're talking about. There's no chance of either happening.
  - masonic 8y ago
    back?. The party just gave them a huge bailout bill last session.
    - masonic 8y ago
      Downvoters: see https://www.mercurynews.com/2018/09/21/brown-signs-bill-allowing-utilities-to-pass-costs-of-wildfire-lawsuits-onto-consumers/ https://www.mercurynews.com/2018/09/21/brown-signs-bill-allo...
    - masonic 8y ago
      Specifically, see https://www.mercurynews.com/2018/09/21/brown-signs-bill-allowing-utilities-to-pass-costs-of-wildfire-lawsuits-onto-consumers/ https://www.mercurynews.com/2018/09/21/brown-signs-bill-allo...
  - dragonwriter 8y ago
    Even if they would have tried to before, the bankruptcy would make that essentially impossible; any action the State would make would just be another bankruptcy claim, competing against other creditors, mostly wildfire victims, reducing the proportion of any claims that are actually paid out.
crushcrashcrush 8y ago
This is the US American way, and we're all fine with it.
blevin 8y ago
Knew someone who worked at PG&E. Her department's task was to support calculation of whether it was financially optimal to obey the law or risk paying fines, across PG&E's service footprint.
- barbecue_sauce 8y ago
  Isn't that just Risk Analysis?
  - maxxxxx 8y ago
    It is but for laws to have some teeth it needs to be either illegal (maybe increase the fine hundredfold) to intentionally creating a situation that causes fines to be paid or the fines to need to be much higher.
    - tlynchpin 8y ago
      > fines to need to be much higher. louder for the people in the back muuuch higher.
    - Mikeb85 8y ago
      Forget fines, throw them in jail. Guarantee they'd shape up real quick.
  - underwater 8y ago
    Wouldn't it be a criminal conspiracy?
    - barbecue_sauce 8y ago
      Probably depends on the reporting structure of the organization.
- NelsonMinar 8y ago
  How many people are dead because of that calculation?
pmikesell 8y ago
Let's not forget about the time they blew up San Bruno: https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion
- x0x0 8y ago
  The pipe was installed in 1956, before modern testing methods such as xrays. It worked for over 50 years. Per PG&E, they have 6,700 miles of gas distribution pipelines [1] like the ones in San Bruno. They have another 40k miles of other gas pipelines. Building perfectly safe systems in the face of enormous lengths of pipe -- ie there will be manufacturing defects -- and over 50 year service lives seems like a very difficult problem to address. Also, 2/3 of their gas pipelines were built before 1970 > A Chronicle investigation pointed out in October that two-thirds of PG&E's pipelines were built before 1970. That was a key year, in which regulations requiring better welding techniques were enacted. > Also, the vast majority of PG&E's old pipelines can't be inspected with the most modern technique - a device called a smart pig, which is bristling with sensors and is run through the interior of a pipe. PG&E has also been unable to find complete documentation confirming the safety of maximum pressure levels for about one-fourth of its transmission pipelines in and around urban areas. [2] Per the pdf [3], page 18, PG&E spent $834m capex and $4.9m opex over 4 years replacing 186 mi of pipeline. This averages out to $4.4m/mi, and much of it doesn't seem to have been in urban areas, which massively increases expense and public disapproval. So you can see the magnitude of the cost to replace the (2/3) of 6700 mi of pipeline built before 1970. Roughly (2/3) x 6700 x 4.4e6 = $19.6B. None of this means PG&E is spectacularly well run. But the $100m they apparently were supposed to spend on pipe replacements is barely a drop in the bucket of doing a system-wide pipe replacement that we perhaps ought to be doing. [1] https://www.pge.com/en_US/safety/how-the-system-works/natural-gas-system-overview/natural-gas-system-overview.page https://www.pge.com/en_US/safety/how-the-system-works/natura... [2] https://www.sfgate.com/news/article/PG-E-under-spent-on-pipeline-replacement-program-2371476.php https://www.sfgate.com/news/article/PG-E-under-spent-on-pipe... [3] http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=4594 http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=4594
  - iso1337 8y ago
thomaskcr 8y ago
Part of my problem here is that PG&E has had rate hikes rejected by the government. When you back out the insanely profitable natural gas from their financials, their margins don't seem that great on the electrical side (if they are profitable at all, there's no breakdown of O&A/DAD). California can't reject rate hikes and then say "hey you didn't spend enough on safety!". For example > If history is any guide, PG&E probably won't get all the money. > While the utilities commission seldom rejects rate-hike requests outright, it typically gives utilities less than they want, sometimes much less. In its last general rate case, PG&E asked for a revenue increase of $4.2 billion, spread over three years. The commission approved $1.9 billion. In 2009, the company proposed spending $2.05 billion to fight blackouts on its electricity grid. The commission approved $366.6 million. I don't really see how this is entirely the company's fault. I hate to go full unpaid shill for some massive corporation but PG&E seems to have a history of the government telling them they can't raise rates to pay for this stuff. [1] 2017 financials including years they had rate hike rejections in the article I quoted: http://s1.q4cdn.com/880135780/files/doc_financials/2017/Q4/PG-E-Corporation-Reports-Full-Year-and-Fourth-Quarter-2017-Results.pdf http://s1.q4cdn.com/880135780/files/doc_financials/2017/Q4/P... [2] https://www.sfgate.com/news/article/PG-E-rate-plan-would-cost-15-6-more-typically-3680344.php https://www.sfgate.com/news/article/PG-E-rate-plan-would-cos...
- rgbrenner 8y ago
  Those financials say they increased their net profits from under 900m in 2015 to 1.6B in 2017 (nearly a 10% net profit margin--that's after taxes, depreciation, etc). Don't you think they could use some of that money to perform the maintenance required? Instead they cut it: Operating and maintenance expenses: 2015: 7B 2016: 7.4B 2017: 6.3B It looks like their 700m in extra profits in 2017 came directly out of the maintenance fund. Thanks for the link, but this makes PG&E look even worse... since pg&e caused more fires in 2017 than the previous year, and 2018 is even worse than 2017.. now I really want to see what they spent in 2018.
  - x0x0 8y ago
    If you have no profits, CA is probably going to have to directly own the company. You won't be able to get cash from the stock market. At this point, that's the most likely outcome, but I can't imagine many people in the CA government actually want the responsibility.
rajacombinator 8y ago
Step 3: get bailed out by CA so that its moronic taxpayer and voter base get triply screwed. (This will be in a week or two.)
- masonic 8y ago
  Already happened, three months ago.

bleriot 8y ago

Par for the course for a company that “illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses” according to the state.

toomuchtodo 8y ago
Any chance California is going to claw that money back and execs face criminal charges?
- lisper 8y ago
  I'll give long odds against.
- gamblor956 8y ago
  Small chance for the former, but essentially no chance for the latter.
- Ar-Curunir 8y ago
  This is a neoliberal capitalist country we're talking about. There's no chance of either happening.
- masonic 8y ago
  back?. The party just gave them a huge bailout bill last session.
  - masonic 8y ago
    Downvoters: see https://www.mercurynews.com/2018/09/21/brown-signs-bill-allowing-utilities-to-pass-costs-of-wildfire-lawsuits-onto-consumers/ https://www.mercurynews.com/2018/09/21/brown-signs-bill-allo...
  - masonic 8y ago
    Specifically, see https://www.mercurynews.com/2018/09/21/brown-signs-bill-allowing-utilities-to-pass-costs-of-wildfire-lawsuits-onto-consumers/ https://www.mercurynews.com/2018/09/21/brown-signs-bill-allo...
- dragonwriter 8y ago
  Even if they would have tried to before, the bankruptcy would make that essentially impossible; any action the State would make would just be another bankruptcy claim, competing against other creditors, mostly wildfire victims, reducing the proportion of any claims that are actually paid out.

crushcrashcrush 8y ago

This is the US American way, and we're all fine with it.

blevin 8y ago

Knew someone who worked at PG&E. Her department's task was to support calculation of whether it was financially optimal to obey the law or risk paying fines, across PG&E's service footprint.

barbecue_sauce 8y ago
Isn't that just Risk Analysis?
- maxxxxx 8y ago
  It is but for laws to have some teeth it needs to be either illegal (maybe increase the fine hundredfold) to intentionally creating a situation that causes fines to be paid or the fines to need to be much higher.
  - tlynchpin 8y ago
    > fines to need to be much higher. louder for the people in the back muuuch higher.
  - Mikeb85 8y ago
    Forget fines, throw them in jail. Guarantee they'd shape up real quick.
- underwater 8y ago
  Wouldn't it be a criminal conspiracy?
  - barbecue_sauce 8y ago
    Probably depends on the reporting structure of the organization.
NelsonMinar 8y ago
How many people are dead because of that calculation?

pmikesell 8y ago

Let's not forget about the time they blew up San Bruno: https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion

x0x0 8y ago
The pipe was installed in 1956, before modern testing methods such as xrays. It worked for over 50 years. Per PG&E, they have 6,700 miles of gas distribution pipelines [1] like the ones in San Bruno. They have another 40k miles of other gas pipelines. Building perfectly safe systems in the face of enormous lengths of pipe -- ie there will be manufacturing defects -- and over 50 year service lives seems like a very difficult problem to address. Also, 2/3 of their gas pipelines were built before 1970 > A Chronicle investigation pointed out in October that two-thirds of PG&E's pipelines were built before 1970. That was a key year, in which regulations requiring better welding techniques were enacted. > Also, the vast majority of PG&E's old pipelines can't be inspected with the most modern technique - a device called a smart pig, which is bristling with sensors and is run through the interior of a pipe. PG&E has also been unable to find complete documentation confirming the safety of maximum pressure levels for about one-fourth of its transmission pipelines in and around urban areas. [2] Per the pdf [3], page 18, PG&E spent $834m capex and $4.9m opex over 4 years replacing 186 mi of pipeline. This averages out to $4.4m/mi, and much of it doesn't seem to have been in urban areas, which massively increases expense and public disapproval. So you can see the magnitude of the cost to replace the (2/3) of 6700 mi of pipeline built before 1970. Roughly (2/3) x 6700 x 4.4e6 = $19.6B. None of this means PG&E is spectacularly well run. But the $100m they apparently were supposed to spend on pipe replacements is barely a drop in the bucket of doing a system-wide pipe replacement that we perhaps ought to be doing. [1] https://www.pge.com/en_US/safety/how-the-system-works/natural-gas-system-overview/natural-gas-system-overview.page https://www.pge.com/en_US/safety/how-the-system-works/natura... [2] https://www.sfgate.com/news/article/PG-E-under-spent-on-pipeline-replacement-program-2371476.php https://www.sfgate.com/news/article/PG-E-under-spent-on-pipe... [3] http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=4594 http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=4594
- iso1337 8y ago

thomaskcr 8y ago

Part of my problem here is that PG&E has had rate hikes rejected by the government. When you back out the insanely profitable natural gas from their financials, their margins don't seem that great on the electrical side (if they are profitable at all, there's no breakdown of O&A/DAD). California can't reject rate hikes and then say "hey you didn't spend enough on safety!". For example > If history is any guide, PG&E probably won't get all the money. > While the utilities commission seldom rejects rate-hike requests outright, it typically gives utilities less than they want, sometimes much less. In its last general rate case, PG&E asked for a revenue increase of $4.2 billion, spread over three years. The commission approved $1.9 billion. In 2009, the company proposed spending $2.05 billion to fight blackouts on its electricity grid. The commission approved $366.6 million. I don't really see how this is entirely the company's fault. I hate to go full unpaid shill for some massive corporation but PG&E seems to have a history of the government telling them they can't raise rates to pay for this stuff. [1] 2017 financials including years they had rate hike rejections in the article I quoted: http://s1.q4cdn.com/880135780/files/doc_financials/2017/Q4/PG-E-Corporation-Reports-Full-Year-and-Fourth-Quarter-2017-Results.pdf http://s1.q4cdn.com/880135780/files/doc_financials/2017/Q4/P... [2] https://www.sfgate.com/news/article/PG-E-rate-plan-would-cost-15-6-more-typically-3680344.php https://www.sfgate.com/news/article/PG-E-rate-plan-would-cos...

rgbrenner 8y ago
Those financials say they increased their net profits from under 900m in 2015 to 1.6B in 2017 (nearly a 10% net profit margin--that's after taxes, depreciation, etc). Don't you think they could use some of that money to perform the maintenance required? Instead they cut it: Operating and maintenance expenses: 2015: 7B 2016: 7.4B 2017: 6.3B It looks like their 700m in extra profits in 2017 came directly out of the maintenance fund. Thanks for the link, but this makes PG&E look even worse... since pg&e caused more fires in 2017 than the previous year, and 2018 is even worse than 2017.. now I really want to see what they spent in 2018.
- x0x0 8y ago
  If you have no profits, CA is probably going to have to directly own the company. You won't be able to get cash from the stock market. At this point, that's the most likely outcome, but I can't imagine many people in the CA government actually want the responsibility.

rajacombinator 8y ago

Step 3: get bailed out by CA so that its moronic taxpayer and voter base get triply screwed. (This will be in a week or two.)

masonic 8y ago
Already happened, three months ago.