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Continuing to Press PG&E on Its Safety Culture

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By CPUC President Michael Picker

During the four-and-a-half years I've served as president of the CPUC, the Commission has done a lot of work aimed at getting Pacific Gas & Electric Co., the state's largest utility, to be as vigilant about safety as it often proclaims that it is.

In 2015, the Commission imposed the largest fine ever leveled against an American utility, $1.6 billion, for the San Bruno gas pipeline explosion five years earlier that killed eight people, injured dozens more and destroyed or damaged some 100 homes.

As part of a comprehensive PG&E safety culture investigation we began that same year, North Star Consulting Group was brought in to conduct a top-to-bottom safety assessment of the utility. North Star found that PG&E does show - sometimes unevenly - a commitment to safety at all levels of the company. But as I commented at the time, the utility's many safety initiatives "do not yet add up to a consistent, robust and accountable corporate-wide safety program." We also directed PG&E to adopt recommendations included for improved safety culture that were included in the North Star assessment.

Of particular concern to me was that after San Bruno's record-breaking total of $2.5 billion in penalties, no company directors were removed, and no senior executives were held accountable.  But we are continuing to press the issue, particularly since PG&E equipment has been deemed responsible for starting some of the most destructive wildfires in the state's history.

At the Commission's voting meeting last week in Sacramento, we approved a decision building on earlier efforts and some of the management changes that have occurred at PG&E since it sought bankruptcy protection related to wildfire liabilities.

PG&E does now have new board members and a new CEO.  It is imperative that the individuals serving in these positions understand that the Commission will be monitoring the utility closely in the coming months and years.

Our most recent action requires PG&E to submit information about the board members and their qualifications.  Bringing in new leaders with impressive resumes is one thing; making sure they are appropriately qualified for the specific safety-driven requirements of the task at hand is something else.

In addition, we want to make sure that new directors are not so burdened down with other responsibilities that they fail to adequately dive into the governance of PG&E, which has also come under renewed CPUC scrutiny. The corporate governance of PG&E demands the full attention of qualified people, not the splintered attention of otherwise well-meaning executives whose time and commitments are divided.   

I have met with utility executives and board members over the years, and they all say the right things about being committed to safety. We need to look past those assurances, dig deeper, and find out who is making decisions, how qualified they are, and whether we have the right leadership at PG&E. Under the major wildfire legislation passed last year and signed into law by former Gov. Jerry Brown, Senate Bill 901, we are also extending that safety culture examination to the other investor owned utilities regulated by the CPUC.

Specifically, our latest decision requires PG&E and PG&E Corp. to provide the following information for each board member within the next 20 days: 

  • Any safety-specific education and training received, including any education or training relating to corporate safety culture or safety management programs, with dates, provider and any certifications.
  • All direct, supervisorial or management level safety‑specific work experience, including all experience with corporate safety culture or safety management programs, with dates, job title, and including both general job duties and safety-specific job duties.
  • All safety-specific board of director experience, including specific safety committees served on, dates of service, the scope of committee jurisdiction, and any experience relating to corporate safety culture or safety management programs.
  • All other previous and current board positions at other organizations, including dates, names of companies, and any special duties or offices.
  • All other current professional commitments, including employment, consulting or other contract work, and any significant and ongoing volunteer work. PG&E and its parent company are also required to provide non-confidential versions of the minutes of all board meetings and safety committee meetings to our Safety and Enforcement Division.

With hot and dry weather upon us, the Commission is acutely aware of the growing threat California faces from catastrophic wildfires. We need utility leaders with the right experience and backgrounds-executives and others who are at the very top of their games-to make sure an unwavering commitment to safety really is embedded into every level of the utilities we regulate.

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