Home>Articles>PG&E Faces A Possible State Takeover This Week As Gov. Newsom Prepares to Meet Utility Executives

Gov. Gavin Newsom. (Kevin Sanders for California Globe)
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PG&E Faces A Possible State Takeover This Week As Gov. Newsom Prepares to Meet Utility Executives

Takeover threat comes after responsibility for deadly wildfires and shutting down power to residents

By Evan Symon, November 4, 2019 7:08 pm

Governor Gavin Newsom will meet with PG&E executives, shareholders, and others affected by the wildfires and power outages this week in Sacramento. If a plan is not agreed to, Governor Newsom has threatened that the California State Government would take over the company.

PG&E has faced a restructuring for years. Within that time period the utility provider has gone bankrupt, caused numerous wildfires, has increasingly shut off power to residents as a form of wildfire protection, and has performed so much negligence that it has caused the deaths of dozens of people, most notably in the 2018 Camp Wildfire which killed 85 people in the town of Paradise.

Governor Newsom has publicly blamed PG&E for months, and has called on PG&E to take greater responsibility in their mistakes, including paying residents affected by blackouts. But on Friday the Governor moved on to announcing that the entire company could face a State takeover, something rarely threatened by Governors.

“While this week showed how California is leading the world in wildfire prevention and response, PG&E presented the opposite portrait. Long and widespread blackouts highlighted their culture of ineptitude – a behemoth that was slow to act and resistant to change,” Newsom said in a press statement on Friday. “For decades, PG&E failed to prioritize public safety. Their lack of safety investments left PG&E – and nearly half of Californians – with an antiquated electrical system that is vulnerable to weather events and not at all prepared for the more extreme weather associated with the climate change that has been predicted for the past several decades and is now here.”

“This cannot – and will not – be the new normal.”

Gov. Newsom also laid out a road map for PG&E to follow based on newly passed laws from both the Assembly and the Senate, while also noting that PG&E needs to get out of bankruptcy to fully implement improvements.

“Let me be clear,” said Newsom. “The creativity that so many people desire for PG&E to be a new company that prioritizes safety, understands the communities it serves, and is responsive to the needs of customers can only happen if we first get out of bankruptcy court. It is my hope that the stakeholders in PG&E will put parochial interests aside and reach a negotiated resolution so that we can create this new company and forever put the old PG&E behind us.”

However, the Governor also didn’t rule anything out, threatening a takeover of PG&E if nothing is decided. Newsom went so far as to appoint a team on the takeover matter.

Cabinet Secretary Ana Matosantos (PROMESA)

“If the parties fail to reach an agreement quickly to begin this process of transformation, the state will not hesitate to step in and restructure the utility,” warned Governor Newsom.

“To that end, I have tapped my Cabinet Secretary, Ana Matosantos, to serve as the state’s Energy Czar to lead a dedicated energy team with Ann Patterson, our lead attorney on the matter, Alice Reynolds, our lead energy and environmental policy expert, and Rachel Wagoner, our senior legislative strategist, spearheading the Administration’s energy efforts. They will work closely with other senior leadership in my office, outside legal, financial and energy advisers, and leadership across state government to game out every option and prepare a plan should the state need to intervene. All options are on the table.”

The meeting is to be held later this week in Sacramento. While PG&E has not publicly responded to the Governor’s statement, it is expected that an agreement will be reached.

Currently PG&E has until June 30th of next year to get out of bankruptcy caused by the number of lawsuits totaling $30 billion coming from the Camp Fire.

Evan Symon

Evan V. Symon is the Senior Editor for the California Globe. Prior to the Globe, he reported for the Pasadena Independent, the Cleveland Plain Dealer, and was head of the Personal Experiences section at Cracked. He can be reached at evan@californiaglobe.com.
Evan Symon
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One thought on “PG&E Faces A Possible State Takeover This Week As Gov. Newsom Prepares to Meet Utility Executives

  1. PG$E has been reliable in the past. What has changed? I’ll tell you what. Extreme regulation, environmental fascism, and unbridled development that PG$E is obligated to service. Much of that development in areas that are literally fuel depots for fires. The nappy hills of brush above LA or the pine and fir forests of Northern California being the examples
    PG&E is not the only one to blame. The political dictatorship that is California bears a lot of responsibility for their tax greed of allowing communities to be built in tinderboxes. There is a lot of blame to go around. New-scum is scapegoating/ pivoting/diverting the issue towards the utility. You think it is bad and expensive now, wait until the state takes over with itspolitical incompetence and public unions.

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