 Thank you all for joining us this evening, and thank you to all of you for joining us this evening, and thank you to all of you for joining us this evening. My name is Alyssa Stone. I'm the Senior Director of Programs and Community Engagement here at the Center's Institute. I'm very excited to have you all join us for this special talk with author and journalist, Katherine Blunt of the Wall Street Journal. Please join me in a warm welcome with Katherine. Wonderful to welcome you all, and for our members and returning guests, welcome back. Mechanics Institute was founded in 1854. We are the historical landmark cultural center, gorgeous multi-story library, world-renowned chess program, and events center like we're doing this evening. We have programs that range from cinema and film series, chess classes and tournaments, author talks, writers groups, book groups, reference classes, and many, many more things like concerts and special events. I hope that you'll check out more of our Mechanics Institute programming by visiting hmi-library.org and seeing all the wonderful things we have going on. For example, we have the start of our October cinema lit theme. It's Shades of Gothic, very October themed. This Friday we have our first film of our October series with our film career, Matthew Kennedy. We also have events coming up next week, like our Cameron literary reader fall launch party on October 12th, so I hope you'll come check that out as well. Again, please visit hmi-library.org to learn more about the events that we've got going on all throughout the year. It's my pleasure to introduce Catherine Blunt by sharing a little bit about Catherine, and then I will have a handful of questions. Catherine will do a reading from the book, and towards the end we will open up for audience Q&A. We will bring a microphone around for you to ask your questions, and we love questions and not so much comments. Please be thinking about your questions throughout, and we will take as many questions as we can for the end of our discussion this evening. Catherine Blunt is a reporter for the Wall Street Journal and author of California Burnham, The Fall of Pacific Gas and Electric and What It Needs for America's Poor Grid. Catherine has written about utilities and renewable energy for the journal since 2018. Her coverage of PG&E, reported in close collaboration with two colleagues, was a finalist for the 2020 Tulip Surprise for National Reported and earned a Gerald Lowe Award, the highest honor in business journalism. This series also won a 2019 Thomas L. Stokes Award for Energy and Environmental Writing, as well as a Silver, Bartlett and Steele Award for the Donald W. Reynolds National Center for Business Journalism. Prior to joining the journal, Catherine was a business reporter at the Houston Chronicle and reported on a variety of topics, including the Lakewood, Church, and local scene built. Catherine also covered transportation from the San Antonio Express News and investigated why the first public private toll road in Texas, as well as many others financed prior to the recession went bankrupt. Catherine lives and works in San Francisco and I'm very pleased to welcome Catherine for our talk tonight. It's hard to say exactly when PG&E Corporation began its fall, like the erosion of any great institution that happened slowly and then all at once, as the way it passed the stakes became too much to bear. You could have seen the extent of the consequences when California's largest powerfully utility, a regulated monopoly with built-in age groups, caused a series of wildfires that killed more than 100 people and raised hundreds of thousands of acres of vineyard forest. The abject devastation revealed the company's systemic problems, chronic mismanagement, criminal neglect, existential risk. Its future had never looked so uncertain. None felt an uncertainty more than the victims of the company's negligence. In California, utilities barely cost property damage and other liabilities if their power lines caused fires. The extent of the damage pushed PG&E to see bankruptcy protection. It owed billions of dollars to those whose homes and families had been in the path of destruction. He makes it a tough number now, but Hedge finds it too difficult on the company's distress laying claims to most of the cash I've left. So PG&E decided to compensate victims with shares in the company itself. Because of that decision, PG&E's former chief executive, and unpoppable utility veteran, Bill Johnson, found himself face-to-face with a fire victim in a fluorescent lit hearing in the California Public Utilities Commission. It was February 25, 2020, and an unusually warm one today in San Francisco. The hearing was one of several the agency would hold as its staff considered the implications of PG&E's bankruptcy case. A federal proceeding that also required involvement of state regulators. Johnson, who had been hired to lift PG&E out of the depths of crisis, appeared to build questions about the company's checkered safety record and plan of realization. Part of which involved funding and trust with equal parts cash and stock that would be slowly liquidated to pay fire victims over time. An hour of interrogation felt like three. The question was plotting and so it. Then the victim, Will Abrams, spoke up. Abrams, a management consultant with square glasses and small silver coupes in each year, had spent months pouring over thousands of pages of legalese, disappearing between little league games and school functions to teach himself the language of PG&E. He was an interloper, among the lawyers who had come to the page when Terry gave Johnson about the technicalities of restructuring. When it was his turn, he signaled that his questions would be different. Johnson, a former Penn State offensive line and who, in his mid-60s, still lived apart, hunched over the data since Abrams explained what he had to show up. PG&E dropped thousands of California's, few of whom had the inclination to battle a utility in the throes of bankruptcy. Abrams had the uncommon resolve of a lone crusader. He had taken up the fight not just for himself, but for all who would soon hold shares of the company through the throes. He offered Johnson a metaphor. A man burns down someone's house and has only enough money to cover half the rebuilding costs. So he offers an investment opportunity, right with risks, to cover the other path. Doesn't strike me as really fair, Abrams said. Is that fair? Johnson responded carefully. Fairness is often the eye of the beholder, he said. For Abrams, the irony was just too bitter. He had lost nearly everything late one October 9, 2017, when a wildfire raced out a wooded canyon toward his neighborhood north of Santa Rosa in the California wine country. He awoke with his family in the early hours of the morning to a house building smoke. More than two years later, his young son was still in therapy for panic attacks. His family was still in a rental house. PG&E's bankruptcy had cut them in limbo. The fire that affected their lives was one of 18 that ravaged northern California that fall as yell force winds and tree limbs battered PG&E's aging power lines, the consequence of branches throwing too close to live wires. The lines sparked out of contact, giving birth to infernoes that killed 22 people. The winds returned the following fall to shake a power line with foothills of the sea on Nevada. Sparks blew this part of a brook. Within hours, the deadliest wildfire in California history had leveled near my town's paradise. 84 people burned to death. When Johnson met Abrams in the hearing room in San Francisco, he had been CPO for 10 months. Enough time to grow accustomed to the hostility that permeated less than any conversation about PG&E. He tried to diffuse it with dispassion, staying calm and collected and staying knowledge of the company's past failures and explained its plans to rectify them. He took the same approach with Abrams, who struggled to keep his emotion in check as he asked why his victims should have to shoulder the risks that endangered the future of PG&E itself. The company's share price was sliding to a near record low, having fallen more than 75% from its peak as investors realized that wildfires were not only hugely expensive, but also potentially inevitable. Johnson, as a matter of fact, was a complex situation, he said, made more so by the number of players involved, attorneys, investors, politicians, judges, and two federal courts. Abrams' side, compared to faculty's notes, what can you do as an executive to ensure that these issues of victims are bringing up that dramatically affect their lives or at the forefront of how PG&E moves forward with a plan of reorganization, he asked. Johnson, whose soft voice offset his poking finger, raised a finger, brought a furrow to pine ground and glasses. He told Abrams that he had visited the paradise five times after it was destroyed. Once, he said, he toured the area by bus to the company's board of directors, mostly Neoprine and Sierra's unfamiliar with the rural instances of northern California. During the ride, local officials played a recording of a 911 call from the Heifer family, grandmother, mother, and daughter. The women had huddled together and bound to have pleaded for help as the flames approached. They began to scream. The line went silent. The local sheriff showed a photo of their remains. You think I am unaffected by this? By the victims in this treatment, you are wrong, Johnson said. I'm going to do everything I can to make this right. If it was an earnest promise, it was also a tired one. Each of Johnson's predecessors had pledged to do the same after a series of crises had defined the past two decades for PG&E. None had succeeded. Johnson was severed in PG&E through a second bankruptcy in 15 years. The reasons for the round trip were inextricably tangled. A series of executives had sought to please investors and politicians often at the expense of customers. By the time the company confronted the risks of its aging electric grid, the problems were staggering. Protracted throughout exacerbated by climate change had decimated its service territory. A heavily wooded region roughly the size of New England. One spark hits out a whole forest on fire. California lawmakers and regulators also failed to hold PG&E in Congress, even as wildfire lists spread. They treated the company as a tool in their quest to create the long-term effects of climate change with ambitious renewable energy mandates. In doing so, they failed to recognize the changing climate and have made PG&E power lines an immediate threat to the city. PG&E's failure isn't just a California story. It is, in many ways, a harbinger of challenges to Congress. Climate change exacerbates the vulnerability of the grid. Built decades ago to serve a different era of electricity demand. Aging power lines across the West put greater risks because drought parts for us become more prone to catastrophic wildfires. And in the East and South, more destructive storms threaten to leave millions of people in the dorm for days. In one way or another, all of the nation's investors of utilities are challenged to satisfy shareholders while making their infrastructure safer and more resilient. The very nature of the business creates tension between private interests and the public good. And PG&E is far from the only one that is struggle to strike for imbalance. Johnson, Newton, PG&E, and to California have been tasked with fixing what had broken, but he didn't answer to himself. The many people who have made a marionette of the companies don't hold the strength as it worked to complete its most complex restructuring net. Two months after meeting Abrams, Johnson and I were stepped down as soon as the bankruptcy plan was approved. Abrams, meanwhile, had nowhere else to go. Thank you. Having just finished the book, I can speak highly enough about the writing. It's an extraordinary narrative of a tragic situation, and I highly encourage folks if you haven't picked up the book yet, please do so. It's a beautifully written tale of an extraordinarily sad and scary situation. Thank you. Thank you. I appreciate that. I also, I don't know if you'll notice, I did try to match a little bit. We love a team here at the United States Institute. A little bit of levity for an otherwise daunting topic. Before we dive too deeply into the history and story of PG&E, its past and its present and future, I would love for you to tell us a little bit about how you got into journalism. How did you make your way into business and utility writing and end up reporting on California energy specifically? So I wanted to be a journalist. I was very young. I found it early in high school with the recommendation of a teacher who said it might suit my skill set. So, and it was probably when I was in college, I realized you can do quite a bit to set yourself apart in this industry of recovering business. It's not something everybody wants to do or necessarily has the inclination to do. But I think it's so important in business, so many different businesses, tasks of business, in fact, it's so much of what we do on a day-to-day. I mean, I would already be leading some ways more so than politics or anything else. And so, I was working with Houston when I was hired by the Wall Street Journal to as part of their energy team, specifically, I was asked to cover the utilities power. That was November 5th, 2018. And three days later, it can't fire in Northern California. Again, it didn't destroy the town of Paradise. And within a matter of weeks, it became clear that it was very much caused by a huge power line, specifically a century-old high voltage transition line. And that became the story. I worked, I was, first of all, that was extremely daunting. Oh, I should say that when I joined the Journal, and it was, I didn't know really anything about it. And so, I had to learn extremely quickly. I did so with the help of two very talented colleagues who had quite a bit of experience covering utilities and covering power. They were very generous with their knowledge and worked together to report a series of stories about not just the circumstances that led to the can't fire, but really the circumstances that led to this sort of egocentric crisis for this company, close focus on the last 20 years in particular. And I'm very proud of the work that we did together, and I would not be in this position to work for that and that opportunity and just kind of a strange nature of the time. What was it like to start a new position? I'm sure we've all been in that position where we start a new job and literally throw the first into the fire a handful of days after you started. How were you first introduced to this story? What was that assignment called like? Oh, I mean, it was terrifying. It was also exhilarating because it was just such an important story and working with the team that I had, I mean, we were so focused on it and I was so thankful and it was really kind of my first exposure to what the way the walls were going to work. It was just a really thoughtful approach to stories and editing, and I was really grateful for that, but it really took a lot of work and utility space to start. It was complicated and, you know, I did a lot to get up to sleep myself, but again, I mean, the two colors I was working with. Without that, it would have taken me much longer to arrive at this place. The history of PG&E is fascinating, particularly its longevity and how it merged and absorbed other companies. Could you help us understand how the PG&E that we are familiar with today came to be? Absolutely. It's one of my, this research was some of my favorite. So, when you think about the transmission line that started the Transfire, it's a remote transmission line carrying power from the oldest hydroelectric power nonsense in California to Utah. And the transmission tower that broke, what happened was, you think about it, you know, tall steel structure of arms and small pieces of fiber to hold the wires aloft, a hook that was holding up a wire, and this one was almost exactly 100 years old. It was originally a structure. It was sold in, like, the 1910s. It broke nearly half. The wires went against the tall metal structure. It sparkled several times the dry brush below. And within about an hour, the power was entirely under control. And so, you think about, well, what is that original metal structure? Right? I mean, if you build that, it wasn't PG&E. It was actually the only competitor the PG&E's ever had, a company called Great Western Tower. And that company started when some early and pioneering recognize that the sheer amount of fiber power in Sierra would be, I mean, a great thing. Right? It's a company that started to harness that and to build a series of powerhouses and transmission systems to serve the burgeoning population of San Francisco. And around the time that Great Western was building this transmission system, PG&E was making it worse in San Francisco as well. They set back with the earthquake in the early 1900s and PG&E did a lot of rebuilding after that. And by the time it did, I think Great Western was up the gate. And it was, I think, completed for almost two decades, really. And it was tough because they were trying to keep their service rates really low, also providing quality service. And that's kind of tough in the utility business that the prevailing wisdom was raise the capital in terms of business, why would you be able to put it in assets? Right? And then it was kind of a new generation of leadership around 1935 decided it was finding time to merge. You know, there's been discussions for a while. And with that, we get the PG&E today. I mean, massive, growing California service territory. But also with that, PG&E inherited assets that it really knew nothing about. Did you build that transition system in Sierra? And I mean, over time, reference get lost, institutional knowledge get lost. And by the time when campfire happened, the company really had very little knowledge about the parts of the tower, the origin of the tower, when it was installed. But again, I mean, that hook had been in place since Great Western hung it in the 19th times. And it was, I mean, it's so convenient to consider what the time of use of a little target and the destruction that can cost. And it really is a tiny hook relative to this. I mean, it's the size of my hand, right? And it had worn down from this little bit of friction and swinging, right? Everything I learned, I learned from half the hook. But it boggles the mind to try to even put it into the mountain, how something so small and so consequential could be left unchecked for so long. And just wear down over time. Again, it's like the hooks are this big and they are tasked literally with upholding the power of the entire state and region. What was that like to realize these teeny tiny things were so important? What was your kind of reaction to that? Yeah, I mean, in the early days when we were just kind of wrapping our arms around the spiders, the destruction, how did you approach the story that I was like, my end of thought was this, it caused us to be so complicated, right? I mean, clearly something very complex happens and it's, that's not true. I mean, as more details come out and investigations are true, this hook that was written, the width of a fist broke almost exactly a half because it didn't hang from a plate. Dropping back and forth with various arms over the course of 100 years until it was almost worn through, almost completely, and then it broke and then dropped the wire and that's it. And what was more striking was just kind of coming to understand how that can go over for so long because we wear on hook and invisible for a very long time. It smells, right? It doesn't just break over time. And over time, the various reasons that we'll get into keeping these scaled back, there's a frequency of the inspections of this transmission system. Basically, it was affecting the system of my helicopter with people who drive by very quickly or fly by very quickly. I mean, someone said sort of Tony Chica, an engineer who was interviewed as part of the the few county DA's investigations of like, that's not a good inspection of the fly by, just to make sure that the tower is standing up right. And it's, if you can't see, tiny hooks the width of the fist from a helicopter that's speeding along any given transmission line. It was a really sort of a big problem. It had done a lot to scale back the types of infection methods it was doing. The story of it's keeping climbing these towers the best way to get a good look at these small pieces of hardware. Today, you can use drones and other things but they hadn't climbed those towers in many years. You mentioned a moment ago about the record keeping aspect of this whole story. And I'm hoping that you can help us understand more about how such important records have been lost. What records exist now and what the company has been doing to try to backfill and replicate or recreate important records? Yeah, I mean, records are central to the operations, right? I mean, it just contains all the information that they need to decision making. The thing is, I mean, a hundred-year-old business, think of how much paper has been retained over the course of decades. It can be legitimate and challenging to digitize and organize and to, you know, to struggle at the central end system. And Fugini, like many utilities, many utilities have struggled with this over the course of many years and has tried various things. But, you know, the whole integration process that comes with that is very challenging. And today, just to kind of flash forward, there's, I mean, some people are thinking utilities and using AI and other things to try to fill gaps and stuff like that, but this has not been Fugini's experience and when they were asked to produce records on the tower that failed, results were going to be campfire very, very little to get. I mean, it was kind of an educated guess as to what the material was based on what was probably used in fact in the day that just didn't have any original records anymore. This is just an electric system problem. I'm sure many people on the square room recall the San Bruno explosion in 2010 that killed eight people destroying a part of the neighborhood. And in the wake of that, I mean, it turned out that the company didn't, that the records of the company, essentially had on the section that exploded weren't completely accurate. They said that it was a seamless pipe. It did in fact have a seam, the seam rupture and results in the explosion. And in the wake of that, regulators require them to basically sit through all of their records and determine whether other pipelines that can sit similar risks. And it results in a company hauling documents hauling the state to Cal Palace for days. And it's because records are stored in various places. I mean, they're stored in hard copy. They're stored in the life of a chronic leak. They're in file cabinets. They're in higher non-facilities. It's just a gargantuan amount of information. And no one's really totally figured out how to review it in a good systemic way even though improvements have been made. Another organization that is coming up on 170 years, I understand the gargantuan task of trying to track information. I can't, you know, in our business it's not tasked with the power and gas and electric utilities that keep the lights on and keep that afloat with it. Could you help us understand just how that infrastructure actually works? As a novice power understander myself, you know, it's kind of tricky, I think, for us to understand how power actually comes to these light switches. How is that happening for PG? Yeah, yeah. A simple metaphor is the assistance of roads. So you have your power plant whatever it might be, whether it's wind, solar, gas, hydrologic and big high voltage transmission lines pick up that power from the generating station and these higher voltage lines are like highways. And then those high voltage substations which are set down to lower voltage and distributed to all the businesses through networks of lower voltage lines and it came to like frozen streets. And so we're talking a lot about transmission because the California history but really most fires at night when trees, branches are free fall or flying to teaching lower voltage lines distribution lines and that's been something that the company's really been trying to get ahead of the more clear education of things like that but it can be really hard because when we stick up in the fall you know that Eric Branch didn't apply it suddenly to me and he tangled in the conductor so that's been that was really the primary cause of the base data 2017 wildfires in one country it was mostly the lower voltage lines so we're finding those kind of collective disaster and it seems like a lot of the improvements or maintenance that's happening now is a result of some of these tragic fires and the lawsuits that came into play would you help us understand more about the lawsuits that teaching has experienced and is currently experiencing the bankruptcy proceedings that it's been going through and how that has propelled the work towards clearing and trimming trees or updating a different receptor so this is a bit unique to California California utilities are liable for any damages resulting from wildfires being handed by their equipment regardless of how many we've needed so that our life could be sustained or it could be a hundred years old and it doesn't matter and so in 2017 in one case when we were teaching we used equipment and we had 20 major fires massive property destruction collectively killed more than a hundred people and the company estimated to be 30 billion dollars in line with the early costs and so we did a couple of months with the campfire the company saw things as a connection and that was really good and consequential of course like for the prep for the state for the economic perspective as well as victims who were suing these damages because there was so much influence on compensated and as I probably picked up on it in the prologue that I read the company also really didn't have enough money to satisfy the full amount of compensation partially stocked from the director to our trust so the liability contract is interesting very consequential and the bankruptcy still has consequences people who didn't emerge financially healthier and just kind of remarkable given the purpose of the restructuring process and that still has consequences the way the company's able to raise money in any sense throughout the book you kind of dance forward and backwards through time and there's a weaving in personal narratives and stories particularly one individual who pops up in the prologue as well with your paintings how did you determine which fire survivor stories to include and what was that process of being with people how did you find them and incorporate their stories yeah absolutely in general and including any person or story in the book I mean so many people in the public the stories had to be represented a broader even in the help the leaders kind of understand something more significant about this story versus a very vocal part of this process early on and he really was galvanized by these disasters and wanted to make himself heard even as somebody who was really unfamiliar with the kind of specific regulatory legal processes the teaching was going through and I find this story compelling because he first of all he was very unusual I mean this was very unusual to see an individual so determined and so consistently showing up at you know things regular frequency maybe some bankruptcy and the thing about it is he's kind of saying whatever fire victim wants to say right this is not fair we don't appreciate the way this is going this is really frankly it's not the faces here that aren't having to address and really kind of in every juncture he's dismissed right he's written off and ultimately he doesn't succeed and I've heard from a lot of readers who said no fault we thought he was going to succeed and he didn't you know and but that's that's the point you know it's like I mean victims were very much I mean this is I feel strongly about this I mean victims were very much got the short end of this second process and I don't think that victims concerns were adequately represented throughout any of these processes it was very much trying and ultimately you know I mean he doesn't succeed that's the broader point that is this I was very much in the same boat where I wanted him to have he literally had many days in court but he never succeeded in that way that we think of and that reminded me of how the story reads almost like a film script it's fantastical right in its tragedy and the beginning of the story actually includes a literal cast of characters it's like a cast list um what do you think people don't understand about this story that makes it seem fictional and yet it affects so many people so deeply every single day yeah I mean in our conversation we've been so focused on PG and internal mismanagement and there's been a lot over the years for sure but one my great hope in writing this was to add nuance to this story because it's not just the PG I mean there's a great deal of regulatory issues and decisions and the CPC there's a great deal of culpability and all of this and then there's kind of like a political overlay as well in the politics of California I'm very much in the decision making over two decades and um I mean and then of course later on top of that changing climate the risk profile of Northern California changed very quickly and while there was evidence for many years that Northern California was becoming more prone to wildfire and that risk was increasing after huge long periods of drought millions of debt trees and arguably more should have been done earlier this did happen quickly and um so there's a it's very very difficult to point fingers at any one individual or any institution involved in this um it's a very complex story and I hope that in you know reading this narrative you kind of understand how these pieces coalesce to create this great challenge that we all face here in California today okay the politics part of it is fascinating um I'm sure many Californians of course recall that we call it pretty much which at the time you know I remember that stack of candidates two inches thick and sort of laughing with my friends um but it wasn't a joke it was intrinsically tied to this tragedy of you know it's um recall uh could you help us kind of plot out that political arc Reganus, Schwarzenegger, Brown they've all tried to write this PG&E shifts their voices have been very valid in this conversation around these fire tragedies what is what is the political mechanism to work with PG&E to force PG&E um to change their way of doing it California energy crisis how many people are here for that writing that chapter keeps several years off of my life quite easily okay so um anyway the California energy crisis basically resulted when California was among the first states to try to deregulate the electricity sector which very much a misnomer the utilities are always in the subject regulation but the idea was you hide off generation whoever is going to produce power that's going to be given to the private market different companies you can heed to try to sell power for the lowest cost and which meant a company like PG&E a utility company would no longer own the power plants or whatever maybe and um worked well for a while but the market structure was um vulnerable to manipulation because it and Ron and others did that uh and drove up artificially drove up power prices and um it made it basically or you know pulling our market and it and there was a prospect of um the the grid is tolerated in a way that uh demand has to be equivalent to supply at all times or I'll see like this total system break down so there was a there was a risk of demand receiving supply rolling blackouts the entire world was watching um and it ultimately did lead to the recall of Gray Davis and in the intervening years I mean uh Schwarzenegger uh for one he was a real pioneer in this but California began setting more ambitious on the S targets renewable energy targets and um so PG&E wouldn't have to go out and contract for when solar power um all of the California utilities were kind of uh among the first movers in this market and really helped to create economies of scale we know today as it relates to renewables which is a really good thing but a lot of their resources were on that side and must so on the operational risk side um and then so flash forward to Gavin Newsom coming into office very shortly before PG&E filed for for bankruptcy in the position in which I mean this bankruptcy is so so entrepreneurial because it it it really honored a lot to a lot of different areas of policy and um so they had to basically deal with this and try to figure out how to get the utility out of bankruptcy as possible without looking like you failed out this company but obviously very politically unpopular and of course during this time um as everyone is aware the public safety power shut off um made a very dramatic appearance in Northern California in 2019 with millions of people without power for days and Newsom's curious right I mean it was like Gray Davis had been recalled over some hours long rolling blackouts for like a short couple short stands in time in the early 2000s and I got millions of people out for like 40s and then 3 days in October 2019 it was an absolute mess and um so that absolutely colored kind of like overall approach to this uh but it's it's it's hard to say you can't you truly can't have a company like PG&E for bankruptcy for very long and jeopardizes a lot but in trying to expedite the process there were some interesting deals made but she's put it that way and like it really didn't actually vote off the victims to not help the process play out of time on it might have ordinarily That brings us to a question of what we as individual citizens can do what is our role in this we're so beholden to the companies we don't have a lot of options in the state of California um besides our voices what what are some of the things that we can do on behalf of ourselves as individuals on behalf of our communities to ensure that we are in a safe uh situation that we're trying to protect ourselves well of course I mean as it relates to wildfires and everyone here similarly I'm sure with the idea of defense of the space that it may seem to try to protect your individual property but as it relates to um a company like PG&E one thing that enthuses me about relying on this space is trying to help people understand the system better it's really not something we've had to think about sort of right and we've been privileged as a country generally speaking to kind of take safety and reliability for granted more or less in most cases and now we're in a situation in which um this is the system as we have a less safe for a variety of different reasons and we're increasing how avoiding a position in which um uh reliability is coming to expensive safety starting certain seasons in which PG says it cannot operate the system safely when a winch pick up or you know there's um the company in recent years is deploying the power line settings in which the line trips off and hits it to reduce the risk of sparks but that does me more frequent outages and um the reason why it enthuses me to try to just help people understand this better is because the regulatory process you can participate in it is easy it's not necessarily easy to do I mean maybe make an appearance or figure out how to make public comments online but the commission does solicit feedback from everybody and you can't kind of get up to speed on different proceedings one proceeding in particular that's ongoing right now is um PG and you start to raise breaks right again I mean this we know it's happened all the time and we're in tier very high so being the requested increase rates they want very 10 miles of power lines because the lines are underground and you can't start a wildfire this is very expensive and so what's going on commission as we speak is a debate over whether they uh restricting one of our lines the company can vary in coming years in favor of covered conductor insulated so that if something hits it it reduces the risk of sparks that doesn't eliminate like underground wood and the argument is this covered conductor should it go because underground is just too expensive and we live in a very inflationary environment rates are already very high you can only ask great pairs to bear so much companies counterargument is over the long term if you think that brings out because we will continue to provide a critical service this is the most cost effective way to go because we won't have to continue to trim trees and do all this maintenance easy enough to understand right and um there's a place as the commissioners have delivered and compared to the final decision people can weigh in and you can go and you can submit comments I was just reading them this morning there's a lot of people who have weighed in and um and so there's um for better or for worse there's a lot of different oversight bodies that um have some jurisdiction over a company like each of these ways in which your voice can be used to do so you've been writing more recently about some of the other traffic wildfires that are occurring um they are not just happening in California of course we are familiar with what has just occurred in Maui um in Hawaii how is this story operating across the space um and what's different in other places than here where are there places around the country that are getting in right with power delivery so we we don't know um we know that power line ignited fire in Maui Hawaiian Electric says that a different fire ultimately destroyed the town of of uh what kind of but regardless the companies under and on this scrutiny and how it turned into the system um the fire program uh of course of course in the California is obviously a tragedy but I mean regardless of um kind of the results of the investigations looking into what this company said about fire risk over the years uh there are some pretty chilling parallels to Virginia um in 2019 the company said that they've had you know was I've been watching California's experience and wanted to do more to address wildfire risk it took several years for them to come up with a plan to do so didn't file it with the commission until last year and the company still hasn't started on most of the work that they've proposed to mitigate fire risk and um you know just recently I had the chance to view it's what it calls a wildfire mitigation plan and it's nothing like what the California utilities file here it very much underestimates the risk which I mean PG&E underestimated the risk as well until disaster kind of um forced it to get front completely circumstances that haven't fully evaluated and I think that's really truly applying electric as well I mean they um the utility industry historically has been very backers looking and making the past uh experience and performance is putting them a little bit in the future but in the environment that are changing kind of like we're seeing that relationship is breaking down and um some of the most forward-looking utilities have been doing some really robust analysis to try to understand what climate change means to them um ConEd in New York started doing this at the hurricane Sandy but uh generally speaking I mean it's a reactive industry it often takes a disaster to kind of reveal the extent of the risks um that's not just true about the utility industry but it is um it's very consequential that we mentioned that in this context right it's really a disaster is whether the gas are are terrible I mean whether it be wildfires or like prolonged damages that um challenge the possibility to live where we are really really relying on electricity not just for the normal things you know charging our phones going about our day but there's um there's so many people who rely on it for medical reasons this is very critical stuff I have one more question for Katherine and then I will come around with the microphone for audience today um I prepped Katherine with this a little bit yesterday um I'm sure you've been thinking about this um I'm curious what's something that you've always wished people would ask about or understand about this situation what's something that you are not asking about this that you have to share um a bit of a walking answer to the question but my favorite the most stimulating part of this process for me in writing about in writing this book this is so easy about teaching right it's a twice convicted done convicted on felony charges of not maintaining pipeline systems under San Bruno and put a guilty to 84 pounds of involuntary manslaughter for each death in the campfire um thinking of one of the few uh US corporations that would be in the picture of MEPA almost like charges right I mean it's really remarkable but what is most fascinating to me is like what does corporate liability mean right and when you delve into the kind of decision making that underline these charges it's a lot of really well-meaning people doing the best they can under the circumstances like even though there is the determination of criminal intent no one intended for any of this right and um and I think that teaching is a as a corporation is very widely villainized like people there like if you mean no harm and like when in the moment the tiny decisions that created these disasters were like they were made in good faith and for the most part and um it's kind of extraordinary to kind of swear these ideas of a lot of well-meaning people doing the best they can with these terrible disasters but it is a case and you know I'm sure everyone who's you know worked there during this period of time just has a lot of progress they didn't know if they didn't know and there's not to excuse the company with us to say it's a really interesting idea to consider in light of all of this I'll be happy to come around with the microphone now do you have questions here and then we'll turn to you all I understand that you know especially after the San Bruno to address their questions it's like including a lot of fault-making and turnings that up here is going to look at this management and it's the problem is I'm really surprised that their company didn't have people who were like waving their flags and saying watch out here and how does this get on their butts that's a great question so it's true I got to San Bruno they did a ton of risk analysis on the gas side they brought in an executive from a Boston company actually or utility company started in Boston and he actually did quite a bit of sort of break the shift he did a pretty good job at kind of trying to address some of the big problem areas and they could gas division safer and they brought in void register I think it was to do some really thorough assessment of like risks and then grade them and then ultimately like voids determined they were the best class operator and this executive suggested to his counterparts in the electric division that they break voids and to do similar analysis they said it's not necessary fine we're good over here if you guys have any problems on the gas side I mean silo sort of divisions and operations are common across large corporations but this was I'm very arguably this opportunity I think two quick questions one I think I was up on your last comment about a liability corporate liability I'm just more curious about the company's insurance and reinsurance this is there could have been barriers like AI and major carriers that have been able to provide liability coverage so we're just curious about the livid market and why they had inadequate liability coverage and the second question is more selfish work from Southern California and I'm wondering which you think about Southern California Edison based on some of these issues yeah so he has the story of carrying returns for this but what is remarkable is that any insurance has really been kind of calibrated to the store of wildfire investors in Northern California we haven't been here constructive because in the last decade there's been tens of billions of views of that as a result of drought so the consequence of an insurance failure has become so much higher and one of the key issues in the way that the camp buyers have said this is absolutely going to exhaust our insurance coverage it's just going to be so in excess of what we're able to ensure basically and of course in the wake of all of this teaching time of our time obtaining insurance and then the second question about SAE this is also what we were talking earlier about the culpability of the California government utility commission in 2007 San Diego Gas and Electric power lines invented the witchfire massively destructive very deadly and it kind of leads the commission into here and prompted the ask if they needed to do more to push utilities to address fire risk and be accountable on that PG&E are you successfully that it shouldn't be held to the same standard as San Diego Gas and Electric and Arizona California Edison so PG&E seals really required the two southern utilities to file formal wildfire risk mitigation plans and be accountable on a certain set of metrics PG&E was not held to that same standard until I think 2019 and so this was 2012 so the zoning California utilities have been required by regulations to address fire risk for longer than PG&E and as a result they're arguably pretty far ahead in terms of what they've been able to put in place Question Do you have a valuation of deregulation being one of the major capitalists that created PG&E's downfall? I remember in the 80s two years ago I didn't understand what was going on but when deregulation was happening in Canada to Los Angeles and DWP did not want to deregulate anything were any other utilities successful depending on deregulation and are they better? This is certainly an interesting question generally speaking there are deregulated markets in the United States and California and Texas much of the East Coast and parts of the Midwest but not really kind of like the other Western areas that still plates some of the utilities own generation assets in my view the significance of deregulation for PG&E was not so much in the competitive power market but the fact that the initial construct of the market made it so that the utilities stood on its own and this was totally constructed early design and the back of PG&E was the only one of the three large California utilities to seek things was really consequential and the main issue with that was when it emerged in 2004 it was really the company had been one of the few US utilities to ever seek and the leadership that came in in the wake of that was very intent on delivering to shareholders and reestablishing the company's goodwill on Wall Street and so at this temperature the utilities make money in a somewhat unusual way they make a regulated rate of return on large capital and investments in the system to not make money on day-to-day operations and maintenance expenses like inspecting small transmission and other things like that and in this period in the immediate aftermath of the bankruptcy there was a lot of cost cutting on the operations and maintenance side to free up money to invest this capital and that was determined in the aftermath of San Bruno when auditors went to kind of look at the way the company had been spending money one huge problem was that they didn't really scale back inspections and maintenance of the system in particular and I mean disaster and soon you can't draw a straight line but it doesn't look good like right after a big disaster like that and it kind of continued over the course of the 20 years kind of after a key milestone to the company's progression and had scale back operations and maintenance expenses on the electric distribution and transmission side as well and so that in my view the cost deregulation was significant in that way not to get too wonky about it but it's an interesting question to raise it's like as California pursued its renewable energy targets potentially it didn't matter PG&E and the other utilities built the facilities instead of contracting for the power because they built them it's just a philosophical question but we can talk to you after about everyone talking more about too deregulation I said I wouldn't ask any questions and I told you I asked you to so I may forward twice in a year I left when the first fire started and I came back in response to I was attracted back based on the way that they were handling their setting I was passing by this again let's say you're exploding right now with CCA so I am sorry but I would like to ask a question I could read the other section of your which I found perhaps the most interesting of it as competition diminished John Eschelman foresaw the regulator stepping in to set not only fair and reasonable prices for service but also rates of return on investments in new gas and electric vehicles to protect customers from price swings and all the guaranteed profits for shareholders allowing the utility to raise more capital quote in short we say to these agencies government will only allow you what you ought to take Eschelman once said and when we have said this we have placed government in the position of determining the option to ensure and assume of the energy industry one another who knows best I see here a classic contest between what Bill would have described as autocratic versus democratic impulses who knows best should it cost control or should quality this is central to the conundrum the patient is facing right now and it's to be with regulators over what is the best use of capital long term and it's a great question because so many times a utility will approach a regulator with a plan and a proof review will determine that it's still enough proof at all right there's been many many pieces of this over the years but I mean what's being raised currently what you see is a very legitimate question about best the best way to reduce by risk and the most efficient way to spend money PG&E is already going hard with the regulator it does not know best PG&E knows best PG&E has done the analysis of course there's a great many parties that intervene in these kinds of things they say well we've done the analysis we know best and we are fine with that and so should it cost control or should quality control I would argue that quality should control and I think that we are moving into a period in which electricity is simply going to cost more because we need it for different reasons we should increase the capacity we need to maintain the century old system but you can't just sort of say that and drop the mic right there's a lot of very very legitimate pressures that people living in California base and people living across the country base and so I think that the role of the regulator is very important there are times in which the regulator is probably incorrect but that doesn't make the role of us legitimate or valid it's a hard one to answer for sure so thank you for it I know we have a few more questions and I want to get to as many as possible I also do of course want to highlight that we have Catherine Blunt's book California Burning for Sale here in the back and as has been shared it is an exceptional read and I highly encourage y'all to pick up the book and Catherine will be signing book copies purchased tonight and I want to come to this question here and then here and then I saw a hand here and I'm going to try my very best to get everybody's questions I live in San Jose and I do the experience of the 2017 fire and since the 2017 fire we've been coming up on the territory here shortly the rebuilding and whatnot that has been happening in San Jose what I wanted to talk to you about tonight is the article that I read I believe it was last week or in the last couple weeks that you have written regarding the vegetation management program being scrapped by PG and living in some county and seeing what is happening with this vegetation management I would like to get more information from you as possible as to when this will be scrapped the third party people that are being hired to literally cut down thousands of healthy trees I'm personally experiencing battling with them right now and these people are not arborists they come out, they present themselves as arborists if they can't even identify the tree, the species of tree that they might not know so with that being said where would we stand with this vegetation management program so in the wake of the fires, PG&E created a special program that it called the Kansas Vegetation Management and the idea was that instead of clearing trees which have a four-foot clearance in our lines it would be 12 feet and it was generally speaking that goes beyond regulatory requirements and PG&E for a long time really taught it as this big important program that would reduce a lot of risk it was also very expensive for them and last year they decided to do away with that special program with the active clearance it will still do what they call routine vegetation management which is that four foot clearance to an extent they have to I mean there's legitimate criticisms of process by which they go back to that with the contractors or lack of knowledge I understand what you're saying but what's remarkable is through this special program the company cleared the trees and then they said that it only had the effect of reducing wildfire risk by 7% which is I find that to be stunning personally and I look forward to seeing more robust analysis of what that was so the special tree trimming program is no longer the routine will continue by regulatory requirement that they have struggled to improve into a church quality control and other things that you base thanks so much it's such a complicated topic and I think you're walking through why we need journalists to be tackling these very hard issues every now and then like every few decades San Francisco brings up the idea of a public option like to make PG totally own company and I'm not going to pretend to understand everything about it but the general idea though like there's a lot of like if San Francisco bought all of the infrastructure my one understanding is that then the rest like Santa Rosa area then they would I mean wouldn't we subsidize those areas we give them money so that this whole system can work so I guess just in general the question is you know and I think there's union issues as well the union would be diminished so I don't know I'm just curious about your thoughts on the option of making PG need a public or your own company yeah this is certainly interesting bring up all the relevant points which PG did very existed to this because San Francisco it's central to the larger system and I the population density of the Bay Area generally is what supports the rest of the system in terms of even the true gravity base for supporting the rest of the system plus population dense areas I think losing San Francisco itself wouldn't be enormously problematic if the San Francisco itself is really quite small relative to the rest of the Bay Area but it's such a precedent which other municipalities could try to defect in similar ways Sacramento did this in part of the century but it was a 20 year fight and think about San Francisco trying to perform its own municipal utility I mean it's an interesting effort it's going to back up a little bit because it is quite emotional the risk in San Francisco is not very high nor we're fortunate in that way and then the other thing too is that PG&E over the years has really spent both this time and effort ensuring the reliability of the system for San Francisco because it's been so central for business and other things so it's not perfect but like we're fairly lucky in San Francisco and that I mean there's not a lot of fire risk the system is reliable we don't have to use a lot of power and there's only the most parts of countries like this and so it is to me it's always striking as an emotional argument for PG&E I think regardless of the kind of the philosophy of non-defection it practically will be very hard I mean it would be a litigious process for sure I mean that being told there's all kinds of ways to block that and even like in the throws of bankruptcy being offered $5 billion or whatever was for the asset there would be companies like the likes to start going down that path and have other companies try to hide off as well I know we've got a couple more questions that I've seen and then we'll start to wrap up and again I encourage y'all to pick up California Burning for Catherine to sign and continue the conversation a couple more questions well this gentleman had essentially hijacked my question which I brought up to you in the band Diane Feinstein's death brings up the years that Bill Brogan publisher of the Bay Guardian spent ranting at first specifically for reasons unknown about public power and bringing up the aspect of PG&E's original intent as newly administered administrative quality over the water and power coming in from that channel it sounds unusual I have never thought of public power or a power utility as merely an administrator he brought that up repeatedly she always pushed back as he would report what are the possibilities for that does that exist anywhere else where a utility actually just administers publicly open power and is that versus San Francisco buying infrastructure which as we see from San Francisco's administration is dubious at best not administering it but having a utility that is genuinely public land in terms of just like their role as an administrator I don't quite know what that means I'm having difficulty trying to envision that but there are places in which the utility is publicly owned well there's the two ultimate structures from the investor and utility and the utility can do second power or LA this isn't quite public ownership to say there's also in rural areas there are cooperatives and so have investors and both models solve some problems that's been challenged in years but introduce other challenges as well one thing that is difficult in California in particular is the liability construct that the utility is liable for all standards the utility requires the power line to go in and require no matter what you do there's going to be something that happens and if God forbid there's another multi-billion dollar disaster that's going to be your taxpayer problem the liability construct is that when the utility accrues these kinds of massive liabilities you can argue that customers ultimately take order one way or the other but they can't actually pass that through in race so that's a shareholder issue why you saw the agency bankruptcy that's sort of some level of protection in the environment that we have but I welcome the chance to discuss this one thank you very much gentlemen there's one thing that invests you especially in festivals you've definitely been there I know that I live in a rural county but also in a different sense I was involved in giving people advice back in the 90s back at the point by a wildfire and I couldn't make it in business as a business because people were listening and the reason for that basically was that people were moving from revenues of fuel out of rural areas I said so I decided to invite one of the moving to a kind of city a grand landscape and all these kinds of things but if you design a property and it survives in the fire your career will be made and that happened three years later it was a wildfire everything was burned down lost their lives the home that I designed so my career took off now, I'm not trying to be not convenient about this but the systematic issues of me as a human being and of humans as a whole with hubris that we think that we can go out of this area out to the rural area and have a airline spring down to our home it's kind of crazy whereas in every environment there's now plenty of options for many to use all airlines in England so it's kind of a systematic question and a valid one against ourselves as human beings in one little country and of course the two therapies that continue in the same time what do you think about the rural or the rest of the world and how do you think about the deal with that it's a very challenging question especially in California I mean it's certainly there's a great deal of appeal in living in the wild but the other thing is that for people who want to live in California that's where the cost of living is lower than it is in a lot of regional and metropolitan areas and there's a lot of discussion about how to destroy any question that shouldn't be built and that's an extremely emotional job for people to make their lives in these places to be able to afford to live and provide their families to say no to those but that there's also some very practical realities that we're breathing in on any time we're talking here about utility cost wildfires utility to not cause the majority of wildfires in California there's a fraction there's also lighting, all kinds of other things campfires, fire extinguishers it could be anything it doesn't necessarily have to be a utility per se it's dangerous when you come with living in these communities there's a lot of cravings a little bit of a term but the utility will kind of be like wildfire insurance or Muslims or the damages of people choosing to live in very, very remote places in which it probably doesn't make sense to serve economically from a safety standpoint so you're beginning to see more conversations about micro grids that have some protein that will separate from the rest of the system they're first to enter reducing risk or earlier than that we haven't made a lot of progress there's been questions about who pays for that, what does that mean but PGN doesn't have to program to place for that and is interested in getting certain parts of the system on so to speak and then there's PGN's argument too that for some places it doesn't make sense how am I running several dozens of miles through the forest just to serve my place without my underground and so yeah there's a lot of big questions about culpability, responsibility risk, risk acceptance and also just questions of equity quality and who has the right to say no and yes there's not an easy answer to that question at all thank you all so much for such an engaged conversation I mean we could go on and on I have three or four pages of questions and your questions have been interesting and unique and obviously this is a situation that deeply impacts all of us right there's not a single person in the entire state of California that this story has not touched so I'm very sadly and tragically and so Kevin thank you so much for your deeply researched writing for a brilliant day-to-day novel correct day-to-day book and hopefully the first of many and for your continued research and journalism and reporting on such an important story please join me in thanking our friend and program of mechanics institute and how great they are