The California Public Utilities Commission on Thursday approved a proposal by Pacific Gas and Electric to divide its operations into five large service areas, a move that regulators hope will bolster safety and local responsiveness in the problem-plagued utility.
The CPUC made the regionalization effort a condition of its approval of PG&E’s bankruptcy plan in May 2020, following years of devastating wildfires. (See CPUC Approves PG&E Bankruptcy Plan.)
“The CPUC’s bankruptcy decision required regional restructuring so that PG&E would be more present in the community and better able to serve the diverse values and needs of its customers,” Commissioner Clifford Rechtschaffen said a statement following Thursday’s decision. “Regionalization is one of the many ways we are looking to see if PG&E has transformed itself into a safer, more reliable and more customer serving utility since emerging from bankruptcy two years ago.”
Since then, the company has held stakeholder meetings in the five regions to solicit input and report back to the CPUC. It also reached a multiparty settlement on the plan with the California Farm Bureau Federation, the California Large Energy Consumers Association and the Coalition of California Utility Employees, among others.
Commissioners accepted the settlement as part of the proposed decision approved Thursday.
“PG&E asserts its proposal would help the company refocus on core operations, safety, its customers and frontline employees,” the decision said. “PG&E asserts regionalization will also enhance its ability to meet its safety obligations.”
The company emerged from bankruptcy after paying billions of dollars to fire victims and insurers and pleading guilty to 84 counts of involuntary manslaughter in the November 2018 Camp Fire, which destroyed the town of Paradise and led PG&E to file for Chapter 11 reorganization in January 2019. (See PG&E Sentenced; Bankruptcy Plan Approved.)
Catastrophic fires blamed on PG&E equipment also occurred in 2015, 2017, 2019, 2020 and 2021, killing more than 100 people and leveling thousands of homes.
During a conference call in February 2021, then-new PG&E CEO Patti Poppe promised the utility would deliver a “regionalized hometown experience for the communities and customers we serve” by establishing a number of semiautonomous management units around the state.
PG&E’s territory will be divided into five regions: North Coast, North Valley/Sierra, Bay Area, South Bay/Central Coast and Central Valley. Regional executive officers will manage each region and report directly to Poppe. Each region will also have its own risk officer and safety officer.
A regionalization stakeholder group will monitor PG&E’s progress in implementing the plan and report to the CPUC.