Good morning, California.
“If you weren’t surprised, you would surprise me. I think we had all maybe lazily accepted a narrative.”— Gov. Gavin Newsom, on whether he was surprised at the finding that PG&E was not responsible for the Tubbs Fire, which killed 22 people in Santa Rosa in 2017.
PG&E cleared of Santa Rosa fire
An ariel view of Coffey Park after the Tubbs Fire in Santa Rosa.
State fire investigators cleared Pacific Gas & Electric Co. of blame for the Oct.8, 2017, wine country fire that destroyed 4,651 homes and killed 22 people. The ignition point, they said, was a privately owned pole so weathered that it was supposed to be replaced.
- The property owner’s name was redacted from the report by the California Department of Forestry and Fire Prevention.
- But The San Francisco Chronicle identified her as Ann Zink, 91. In 2017, she told the Chronicle that she thought trees hitting wires during fierce winds started the blaze, though she was not at the home at the time.
The 80-page report quoted a witness as saying the power pole identified as the ignition point had been “wood-peckered so damned bad” that it looked like it was about to fall over. It would have been replaced the following spring.
Contributing causes included:
- Relatively warm temperatures.
- Low humidity and dry, overgrown brush and trees.
- Wind that might have hit 90 miles an hour.
The company still faces billions in liability from several other fires in 2017. Causes of the 2018 fires remain to be determined. PG&E has threatened to head into bankruptcy as early as next week.
Gov. Gavin Newsom said in a press conference that PG&E’s bankruptcy remains “an open-ended question, and that’s a question for them.”
Newsom: “My focus is on safe, reliable and affordable service. It’s about making sure that we have the backs of those victims, people who have lost the lives of their family members, people who have lost all that they hold dear and close, as it relates to personal possessions, and that they are made whole.”
Why people hate PG&E
Erin Brockovich speaks to fire victims Victor Porter and Beth Hoffman.
Mention Pacific Gas & Electric to Victor Porter, and the response is nothing like the bland non-opinion most Americans have of the companies that provide their electricity.
CALmatters’ Judy Lin quotes Porter, who fled for his life with his partner and their dog when the Camp Fire swept down on their their newly renovated mobile home in Paradise:
“They have to pay. They need to be accountable for what they’ve done here. They’ve ruined not just our lives, they’ve ruined a bunch of people who are worse off than we are.”
Investigators have not determined what ignited the Camp Fire that killed 86 people last year. But as the state’s largest utility prepares to file for Chapter 11 reorganization in bankruptcy court in apparent anticipation of a less forgiving Camp Fire verdict, Californians haven’t had much of an appetite for “innocent until proven guilty.”
PG&E incurs Wall Street’s wrath
A key PG&E shareholder has called for an ouster of the board.
Despite a report clearing it of causing the deadly 2017 Tubbs Fire that ravaged Santa Rosa, Pacific Gas & Electric Co.’s problems are far from over.
- Besides numerous lawsuits, California’s largest electric utility is incurring Wall Street’s wrath.
New York hedge fund BlueMountain Capital Management called on investors Thursday to oust the PG&E board at its annual shareholder meeting in May.
Blue Mountain: “The current PG&E board has not only failed the company and its shareholders, it has failed its customers, it has failed its employees and, it has failed the people of California.”
A day earlier, BlueMountain sent a letter to PG&E’s board imploring PG&E not to go into bankruptcy, a step the utility says it could take as early as next week:
“If you continue down this unwise path, you will—individually and collectively—be called upon to answer a number of uncomfortable questions. Beyond the obvious question of why you would force the Company into an unnecessary bankruptcy, you will also need to answer why you rushed the decision.”
BlueMountain owns 11 million of PG&E’s 519 million shares, a stake it took after the 2017 wine country fires but before the 2018 Camp Fire that turned most of Paradise to ash and killed 86 people.
- Moody’s Investor Services noted late Thursday that notwithstanding the Santa Rosa fire, PG&E still faces “extensive legal responsibilities for other wildfires.” Moody’s expects PG&E to file bankruptcy in the next few days.
FSB Core Strategies: Public Affairs. Ballot Campaigns. Legislative & Regulatory Fights
PG&E by the numbers
PG&E might file for bankruptcy again.
The last time PG&E went bankrupt in 2001, according to BlueMountain Capital Management:
- Customers were stuck with an estimated $6 billion to $8 billion in higher costs, $1,300 to $1,700 per customer.
- Legal and professional advisors were paid over $400 million.
- Seventeen senior executives received $84 million in bonuses.
A Republican defects as GOP falls lower still
Assemblyman Brian Maienschein, now a Democrat from San Diego.
Assembly Democrats welcomed with predictable hugs and praise San Diego Assemblyman Brian Maienschein’s decision to quit the Republican Party and join the Democratic Party, this after he eked out victory over a Democrat by a mere 607 votes in November. Republicans’ view reflected the deep divisions within the California GOP.
- Assembly Republican Leader Marie Waldron of Escondido denounced Maienschein as a “turncoat.”
- But Assemblyman Chad Mayes, a former Assembly Republican leader from Yucca Valley, called Maienschein “a good man with a principled heart. He’s a great legislator that represents his district well. I’m sure this decision did not come easy for him. He didn’t leave the Republican Party, the Party left him.”
CALmatters reporter Laurel Rosenhall was at the Capitol press conference where Maienschein, surrounded by Democrats, cited his reasons including his support for gay rights, abortion access, organized labor, gun control and immigration. And his dim view of President Donald Trump.
Maienschein: “Donald Trump has led the Republican Party to the extreme on issues that divide our country.”
After the 2018 election, Maienschein lost his position on the Assembly Health Committee and was relegated to a tiny windowless office generally reserved for lawmakers who have fallen into disfavor with their leaders. Look for him to get new digs and committee assignments more to his liking as Assembly Speaker Anthony Rendon welcomes him into the Democratic caucus.
- By the numbers: Democrats now hold 61 of 80 Assembly seats.
Commentary at CALmatters
More housing starts with a more sustainable labor force, Scott Littlehale writes.
Scott Littlehale, Committee to House the Bay Area: While the industry’s choices may well have been informed by the cost of decades of new regulatory burdens, an agenda focused exclusively on regulatory reform will only serve to compound the residential construction sector’s current labor shortage. The first step to building more housing is attracting and sustaining a labor force that knows how.
Paying attention? Take our quiz and see
Which former legislator registered as a lobbyist, and why was that a surprise? How big is Jerry Brown’s pension? How did Assembly Republican Leader Marie Waldron describe Brian Maienschein when he announced he was switching to the Democratic Party? Answer these questions and more by clicking here.
Please email or call with tips, suggestions and insights, [email protected]
See you Monday.