PCG PG&E Corporation

By Katherine Blunt 

PG&E Corp. has permanently retired the high-voltage power line that sparked the deadliest wildfire in California's history after detailed inspections of its electric system revealed serious problems on that transmission line and others.

The company said Wednesday the inspections uncovered the need to make thousands of repairs to its equipment. It said it already has addressed the highest-priority safety risks with full repairs or spot fixes, and will develop a plan to complete the remainder in the coming months.

"We understand and recognize the serious concerns raised about our infrastructure," said Sumeet Singh, vice president ofPG&E's community wildfire-safety program. "We acknowledge that while we've made progress, we have more work to do."

PG&E began a massive push to inspect the bulk of its electric system late last year, after a section of its Caribou-Palermo transmission line malfunctioned in November and triggered the Camp Fire, which killed 85 people and destroyed the town of Paradise.

A Wall Street Journal investigation in February found that PG&E for years delayed maintenance work on towers and conductors on the century-old line. The work was never completed before the Camp Fire.

The line has been shut off since December, when the company discovered extensive safety problems after climbing the towers. PG&E had previously warned it might never re-energize the line again.

California fire investigators officially concluded in May that the line was the cause of the Camp Fire. The company had earlier disclosed it was the likely culprit.

PG&E rushed to complete inspections on its electric system ahead of California wildfire season, which began this month. The inspections involved 50,000 transmission towers, 700,000 distribution poles and 222 substations connecting thousands of miles of wires.

The company shared its inspection results with the California Public Utilities Commission earlier this week. It said it would make the status of the needed repairs, organized by city and county, publicly available by July 15.

Through the inspections, the company also discovered that 10 transmission towers within the Golden Gate National Recreation Area were at high risk of failure. A June 5 letter from PG&E's vice president of electric operations reviewed by the Journal said the towers are in "critical condition with noticeable material loss and ground erosion" and require round-the-clock monitoring.

The company estimated it would take more than a year to replace towers on a line in the area and make permanent repairs. It is now assessing whether the line will need additional work.

The inspections were part of PG&E's wildfire-mitigation plan, which involves trimming hundreds of thousands of trees away from its power lines and installing technology to monitor fire risk throughout its electric system. Mr. Singh said the company anticipates the improvements to cost as much as $2.3 billion.

PG&E sought bankruptcy protection in January following a series of deadly wildfires in 2017 and 2018. State fire investigators have tied its equipment to 19 of those fires, including the Camp Fire, and the company has estimated it could face more than $30 billion in related liability costs.

The company earlier this week agreed to pay $1 billion to compensate more than a dozen California cities, counties and agencies for losses resulting from deadly wildfires sparked by its equipment, marking the first major settlement since it sought bankruptcy protection.

At the request of the CPUC, PG&E said it has hired a consulting firm to investigate the cause of the safety problems on the Caribou-Palermo line. It is now formulating more-stringent inspection and maintenance plans to address longer-term concerns about the safety of its power lines.

PG&E's disclosure Wednesday came as aides to California Gov. Gavin Newsom met with state lawmakers to discuss measures to financially assist the state's utilities, according to people familiar with the matter.

California's investor-owned utilities have seen their credit ratings drop due to concerns that they could face billions in liability costs from wildfires. Political leaders are debating provisions such as the creation of a wildfire fund to help with those costs, as well as measures to help utilities spread out some of the costs over time. In California, if a utility's equipment sparks a fire, it is potentially liable for the resulting property damage.

Mr. Newsom has set next month as a deadline to pass legislation to address the problem, noting the urgency caused by PG&E's bankruptcy. But he has conceded that finding political consensus on the issue of rescuing the troubled company may be challenging.

--Alejandro Lazo contributed to this article.

Write to Katherine Blunt at Katherine.Blunt@wsj.com

(END) Dow Jones Newswires

June 19, 2019 19:43 ET (23:43 GMT)

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