SACRAMENTO – Governor Gavin Newsom today redoubled his call for fundamental change to PG&E and laid out a path forward to ensure the overly broad application of Public Safety Power Shutoffs (PSPS) will never happen again.
After spending eight days on the road talking to Californians during the blackouts and wildfires and deploying state resources to help those impacted, the Governor outlined the state’s efforts to fight wildfires, protect vulnerable Californians and ensure that going forward, Californians have safe, affordable, reliable, and clean power.
In a Medium post and in taking questions at the Capitol from media, the Governor laid out the steps the parties in the PG&E bankruptcy must take to ensure safety investments and fundamental transformations can be made before the next fire season. His office also released a roadmap of how a transformed PG&E should operate.
To help the state game out every option and be prepared to intervene, the Governor is tapping his Cabinet Secretary Ana Matosantos to serve as Energy Czar along a with a dedicated team of advisors. Matosantos will continue to serve as Cabinet Secretary and play a leadership role in the budget process.
The Governor’s Medium post reads in full below:
This week, Californians stepped up and met the moment. In the face of fires and unprecedented blackouts, our state banded together – everyday Californians, local leaders, private businesses, philanthropy, unions and state government – to make sure that no Californian was left behind.
California’s incredible firefighting and emergency response personnel showed why our state is world-class when it comes to wildfire preparation and firefighting expertise. Faced with historic winds and extreme fire danger, CAL FIRE quickly extinguished more than 2,000 wildfires this week and contained a number of fast-moving blazes, like the Kincade and Tick fires, without widespread loss of life. The latest predictive technologies, prepositioned fire crews, new equipment, expedited vegetation management, and increased staffing all worked to keep Californians safe and minimize property damage. With our wildfire mitigation efforts that stopped wildfires before they started, and this immediate response to quickly put out the fires, thus far California has experienced a fire season that is below the average in the last five years in the number and severity of wildfires and the resulting damage.
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.
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 outdated infrastructure, lack of preparation and a failure to lead and be accountable to their customers and communities led PG&E to today’s overreliance on, and botched implementation of power shutoffs – failing customers and the state. Millions of Californians lost power for days at a time. Far too many households and businesses were without power for seven days straight.
This cannot – and will not – be the new normal. California demands better. PG&E customers deserve a utility that leads the nation – just like our state’s fire and emergency response personnel. California utilities must reflect our values by prioritizing public safety, affordability, renewable energy innovation, and climate change adaptation. Some of California’s utilities are leading the way. However, PG&E must fundamentally change – starting with a total transformation of its culture and governance. Most importantly, those changes must begin now, ahead of next year’s fire season.
The major wildfire safety bill that I signed into law earlier this year – AB 1054 – requires PG&E to make these fundamental changes. It forces PG&E to make massive investments in safety, ties executive compensation to the utility’s safety record and demands that every year the utility earn a safety certification from the state. And earlier this week, a newly energized California Public Utilities Commission took strong action by opening a major investigation into PG&E’s use of Public Safety Power Shutoffs (PSPS), and vowing a total reform of the rules and regulations governing power shutoffs.
But achieving a permanently transformed utility requires PG&E to exit bankruptcy as quickly as possible. The State of California is developing the blueprint for a transformed utility. Consistent with AB 1054, PG&E must incorporate that blueprint into its bankruptcy plan. To expedite the exit from bankruptcy and facilitate implementation of this transformation, I am convening current executives and shareholders of PG&E, wildfire victims, and PG&E’s other creditors in Sacramento next week in an effort to accelerate a consensual resolution to the bankruptcy cases that creates a new entity – one that better reflects our California values and will advance massive safety transformations beginning before next fire season.
Let me be clear – 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.
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.
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 advisors, 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.
Californians deserve world-class utilities that prioritize safety and affordability, entities that will lead the world in green innovation and zero-carbon growth. That will continue to be the priority of our state and my Administration.