Sacramento, Calif. December 19, 2019 – Assemblymember Chris Holden (AD-41) expressed his disappointment with PG&E’s Bankruptcy plan in a letter to PG&E Chief Executive Officer, William D. Johnson.
“I am disappointed that the Utility has failed to understand or accept the gravity of the issues before them as they seek to emerge from bankruptcy,” said Assemblymember Chris Holden in his letter. “I call upon the Utility to immediately revisit, strengthen, and reconcile the Utility’s plan of reorganization to meet the requirements of AB 1054.”
Below is the full text of the letter:
“December 17, 2019
William D. Johnson
Chief Executive Officer
77 Beale Street
San Francisco, CA 94177
RE: December 6, 2019 Draft Amended Plan of Reorganization for PG&E Corporation and Pacific Gas and Electric Company (Utility)
Dear Mr. Johnson:
I am disappointed that the Utility has failed to understand or accept the gravity of the issues before them as they seek to emerge from bankruptcy. Although I am pleased to finally see you making some progress on the fair treatment of victims, it appears to me that the Utility does not take the terms of AB 1054 seriously. I want to echo the concerns expressed by Governor Newsom in his December 13th letter and call upon the Utility to immediately revisit, strengthen, and reconcile the Utility’s plan of reorganization to meet the requirements of AB 1054. The Legislature echoed those requirements when we adopted ACR 78.
These measures clearly established, in state law, the expectations of the Utility as it attempts to exit bankruptcy. They are not negotiable or subject to modification. Nor will we look the other way to facilitate a quick exit from bankruptcy for the Utility at the expense of these mandates. The Utility should not assume or expect a loose or cavalier approach to our analysis of your reorganization plan. But I infer from your plan that this is exactly what has occurred.
The Utility must address, revise, and improve board composition selection and qualification requirements, safety performance and metrics, and financing mechanisms to meet the terms of AB 1054 and ACR 78 should it intend to preserve its capital market structure. Since the passage of these measures by the Legislature, as the author and the chair of the Assembly Utilities and Energy Committee, I have been under no pressure to relax the mandates. In fact I hear the opposite from colleagues and constituents on a daily basis.
All issues are critical but I want to specifically address the governance and structural issues associated with your exit plan. First, ACR 78 established a very clear expectation that the board would be reconstituted “with a majority of Californians who have experience as regulators, safety experts, and clean energy leaders, and that any new board member should be resolved to change the culture of the company.” However, this issue has not been sufficiently addressed to date. Additionally, if the Utility expects us to entrust the Utility to thoroughly and comprehensively address the safety issues which continue to plague its customers, the Utility must provide us with the assurance that if it fails in its safety requirements, it will provide the state with remedies to assure that the state can expeditiously step in and protect the interests of California. If we are to believe your commitment to safety, this agreement is an easy one for you to make.
From the beginning of this bankruptcy the process and discussions have been too influenced by issues related to control of the Utility with too many concerned about their own positions and stakes in the outcome rather than the fiduciary obligation to the broader interests of the corporation and to safe and reliable service for ratepayers. If the Utility does not desire to step up and take full advantage of the opportunity to retain its structure with the requests that we have made, there is extensive legal authority for the State to address the needs of ratepayers and victims through other structures if circumstances warrant and as chair the Committee, I will lead those discussions.
I look forward to seeing a revised Plan in the immediate future and remain available to work with the Utility on this effort.
CHRIS HOLDEN, Chair
Assembly Utilities and Energy Committee”