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Governor Gavin Newsom (Photo: Kevin Sanders for California Globe)

Governor Newsom Meets PG&E Executives Face To Face Following State Takeover Threat

PG&E will have until the end of June to get out of bankruptcy before state action

By Evan Symon, November 7, 2019 5:53 am

Governor Gavin Newsom. (Kevin Sanders for California Globe)

After only four days following Governor Gavin Newsom’s threat to take over PG&E utilities, PG&E CEO Bill Johnson came to Sacramento to discuss the growing issues of the company.

Johnson, as well as Chief Financial Officer Jason Wells and Chair of the Board Nora Brownell, met the Governor at a private meeting in the State Capitol.

Both PG&E staff and those working for the Governor confirmed that the main issue being discussed was the increasing number of planned power outages PG&E has instituted in Northern California, the effect it had on the elderly and disabled who rely on power and businesses to remain open, the number of businesses, schools, and public buildings that had to close for days at a time, and the ever-present fire danger.

Governor Newsom also made it clear that, if PG&E failed to rectify or improve the issues at hand, California would step in and do whatever was necessary, including a possible takeover. A date was also given as a deadline to resolve the current bankruptcy: June 30, 2020. After June 30th, California would be ready to acquire the struggling utility.

PG&E’s bankruptcy throughout 2019 has been a back and forth of control of the company with investors and creditors getting into a heated battle over control of the company. While both plans are currently being discussed in a San Francisco court, local residents and cities such as San Jose are looking into their own plans of booting out PG&E in favor of a more local power provider, with some places calling on making it a public or non-profit utility, or even suggesting to break it up.

With so many things going on, which also includes around $30 billion in potential damages from PG&E started fires such as the deadly Camp Fire in 2018, PG&E have dug in their heels on what they’ve been doing, while also noting that they have come up short on many things recently.

PG&E CEO Bill Johnson (Bloomberg)

Johnson defended PG&E to Newsom, pointing out that if the power had not gone off, numerous other forest fires would have started due to conditions in the area. His response was safety to the accusations of causing human misery.

“I came to California with one basic purpose: Let’s make sure we don’t kill anybody at our operations,” said Johnson on Tuesday. “I think we achieved that this year. I understand the hardship, I apologize for it, but for me, safety has to come first. I know there were hardships involved. But if you look at what happened over the last couple of years with catastrophic wildfires, we actually prevented that for the most part this year.”

Daniel Zingale (Twitter)

Johnson also said that a takeover or a switch to a local or non-profit company wouldn’t be the best option, due to the logistics of dozens of new power companies across the state and rural areas being charged more.

“I think the way it is structured now is the best idea for the majority of customers,” stated Johnson.

After the meeting it was clear to both parties want PG&E to get out of bankruptcy as soon as possible. But it was also clear that the California governor wants massive change at PG&E.

“It will be very different and qualitatively better than what we have known as PG&E,” explained Newsom’s Senior Adviser on Strategy and Communications Daniel Zingale. “It will be a new model with a new way of governance and a new way of prioritizing safety, ratepayer’s interests and profit in a way that PG&E, as we know it, has not done.”

With just over seven months to the takeover deadline, along with persistent issues such as wildfires and planned blackouts, the meeting with the Governor on Tuesday shows that it will be a very busy half a year for PG&E.

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Evan Symon
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