In the morning of November 8, as scores of people were being burned alive and thousands more were frantically fleeing a ridge overstuffed with traffic, PG&E decided to compose a tweet. It was sent out at 3:14 p.m. and informed residents not of the fire and its path but the reasons why PG&E had decided not to turn off the power. Four months later, in the dust of ashes, the tweet not only sounded cold-hearted but read like the first act in the utility’s effort to cover its tracks. “PG&E has determined that it will not proceed with plans today for a Public Safety Power Shutoff in portions of 8 Northern CA counties, as weather conditions did not warrant this safety measure,” the tweet stated. “We want to thank our customers for their understanding.”
By early March, PG&E was conceding that one of its aging metal towers, which stood 100 feet tall in the canyon 25 miles beyond Paradise, was so decrepit that a live wire had broken free of its grasp on the early morning of November 8. This was the spark that birthed the deadliest wildfire in California history. That the culprit was the nation’s biggest utility – its service area stretching 70,000 square miles from Bakersfield to the Oregon border, with 100,000 miles of distribution lines and 16 million customers – meant that whatever punishment came to it would reverberate far and wide. It was no small corporate disgrace when the monopoly, whose grab reached back more than a century and scarcely knew comeuppance, filed for bankruptcy a few months after the fire. The utility now found itself in multiple courtrooms trying to stave off $30 billion in liabilities for the devastation of Paradise and a series of earlier catastrophic fires it had caused.
In 2015, court records showed, PG&E’s equipment ignited 435 fires, including a blaze traced to a single spindly gray pine that the utility had failed to remove. The tree leaned over and touched a high-voltage power line, sparking a wildfire that burned across Calaveras County, scorching 70,868 acres, destroying 549 homes, and killing two people. In 2016, the same year PG&E neglected to cut down 4,000 to 6,000 trees identified as “hazards,” the utility recorded 362 wildfires of varying sizes. Then in a single month in 2017, the utility’s repeated failures to manage danger — risks common to freighting power across great swaths of rugged terrain to deliver light and gas — caused death and destruction on a scale that had seemed unimaginable. On or around the night of October 8, nearly a dozen fires broke out in Napa, Sonoma, Mendocino, Solano, Lake, Butte, Calaveras, Nevada, and Yuba counties. The flames kept raging until they killed 22 people, destroyed almost 4,000 houses and businesses, and consumed nearly 200,000 acres. The so-called North Bay Fires would set a record for ravage that would hold exactly 11 months.
Now PG&E’s legal team, led by a $1,100-an-hour Manhattan attorney named Kevin Orsini, gathered in a U.S. District courtroom in downtown San Francisco, awaiting another rap on the knuckles from federal Judge William Alsup. The 73-year-old Mississippian, who had gone to Harvard Law and clerked for Supreme Court Justice William O. Douglas before a career in private practice and the Justice Department led to the bench, was presiding over an unusual hearing. PG&E had been deemed a corporate felon for its role in the deaths of eight people who were killed in 2010 when a company gas line blew up a neighborhood in San Bruno. As part of its ongoing probation, PG&E vowed not to commit another federal, state, or local crime. What to deem the 109 additional dead bodies – victims of wildfires ignited by the utility over the past four years – if not evidence of more crimes?
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“There is one very clear-cut pattern here: that PG&E is starting these fires,” Judge Alsup said. “The drought did not start the fire. Global warming did not start the fire. PG&E started it. What do we do? Does the judge just turn a blind eye and say, ‘PG&E, continue your business as usual. Kill more people by starting more fires’?”
“We have an inherently dangerous product is the fact,” conceded Orsini, a partner at Cravath, Swaine & Moore, one of the nation’s most prestigious law firms. “We have electricity running through high-power lines in areas that are incredibly susceptible to wildfire conditions.”
“Do you know how much of California burned down last year?” Alsup asked. “1.6 percent burned down last year. 1.6 percent. The year before, it was 1.3 percent. That’s almost 3 percent of California burned up in two years. This is an emergency.”
“PG&E understands and accepts that it has a credibility problem,” Orsini replied. “Which is why I couldn’t stand up here and say to Your Honor, ‘Trust us. We’ve got it.’ ”
In state courtrooms across Northern California, litigators from three law firms were representing close to 1,000 survivors who had lost family members or houses or both in the 2017 and 2018 wildfires. In their filings, attorneys traced the historic blazes to a culture of mismanagement, corruption, and cover-up that had taken hold inside PG&E decades before. A pattern of venality, they argued, began in the company’s early years and became more recalcitrant in the 1980s and 1990s, when PG&E, with the connivance of the California Public Utilities Commission, its watchdog, made a decision to place profits and bonuses to top executives – and dividends to shareholders – over safety.
“We have an inherently dangerous product is the fact,” conceded Orsini, a partner at Cravath, Swaine & Moore, one of the nation’s most prestigious law firms. “We have electricity running through high-power lines in areas that are incredibly susceptible to wildfire conditions.”
“Do you know how much of California burned down last year?” Alsup asked. “1.6 percent burned down last year. 1.6 percent. The year before, it was 1.3 percent. That’s almost 3 percent of California burned up in two years. This is an emergency.”
“PG&E understands and accepts that it has a credibility problem,” Orsini replied. “Which is why I couldn’t stand up here and say to Your Honor, ‘Trust us. We’ve got it.’ ”
In state courtrooms across Northern California, litigators from three law firms were representing close to 1,000 survivors who had lost family members or houses or both in the 2017 and 2018 wildfires. In their filings, attorneys traced the historic blazes to a culture of mismanagement, corruption, and cover-up that had taken hold inside PG&E decades before. A pattern of venality, they argued, began in the company’s early years and became more recalcitrant in the 1980s and 1990s, when PG&E, with the connivance of the California Public Utilities Commission, its watchdog, made a decision to place profits and bonuses to top executives – and dividends to shareholders – over safety.
There was the gas main that exploded in downtown San Francisco in 1981, forcing 30,000 people to evacuate as PG&E took nine hours to shut off the valve by hand. There was the gas line that exploded in Santa Rosa in 1991 and killed two people. There was the Rough and Ready Fire in Nevada County in 1994 caused by PG&E’s failure to prune back vegetation surrounding its power lines, destroying 12 homes and a historic schoolhouse. The utility had diverted $495 million from its tree-trimming budget to increase corporate profits. It was found guilty of 739 counts of criminal negligence and required to pay $24 million in penalties.
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There was the 1999 Pendola Fire that burned for 11 days and scorched more than 3,800 acres in the Tahoe national forest, requiring PG&E to settle with the U.S. Forest Service for $14.7 million. There was the Fred’s Fire, the Sims Fire, the Power Fire, each one in 2004, that together burned more than 22,000 acres of national forests and forced the utility to reach into its pocket for $75 million more in settlements. And there was the PG&E gas leak in a Rancho Cordova neighborhood in 2008 that exploded and killed one person and injured several others. The investigation found that PG&E had installed a pipe prone to cracks and failed to dispatch a properly trained crew to fix the leak.
“When you connect the dots, you see a culture of arrogance in which the most important thing is the bottom line,” Frank Pitre, an attorney representing dozens of victims, told me. “Time and again, PG&E delays the necessary fixes, callously disregards the safety of California communities, and finds creative ways to not comply with the law. Billions of dollars that should have been invested in infrastructure instead went to pay an 8 percent return to its investors. That is their gold standard.” It was fiction that the California Public Utilities Commission exercised any watchdog role over PG&E, he said. “They don’t have the resources, they don’t have the trained personnel or mindset, to monitor and audit PG&E’s compliance with safety regulations. PG&E can literally get away with murder.”
To fully understand the culture at PG&E, according to Pitre, one needed to go back a decade to the tragedy that struck not the forests of California but a suburban neighborhood on a hillside overlooking the San Francisco Bay. “That’s where you’ll find the fingerprints,” he said. “That’s where you’ll find the DNA.”
On the evening of September 9, 2010, where Earl Avenue intersected with Glenview Drive in the community of San Bruno, a PG&E pipeline ferrying natural gas exploded. The blast knocked houses off foundations and instantly killed several residents. A giant fireball leaped out of the crater and began chasing other residents as they ran from their houses to a safe spot up the hill. The fireball split into two towering columns that hovered above them, roaring and vibrating. The broiler effect stole oxygen from their lungs and movement from their feet. They staggered up the hill and watched the rest of their houses go up in flames. Many did not realize until hours later that heat alone could singe their hair and cook their skin. Eight residents of the Crestmoor subdivision perished, dozens more suffered burns, and 38 houses were destroyed.
Two decades before the blast, the same line had sprung a leak 9 miles away. It took PG&E months to discover these cracks. Fixing the line then became a top priority for the utility, at least on paper. In 2007, PG&E listed the line as posing a “high risk” because of its “likelihood of failure” in an urban area. That same year, PG&E won approval from the state’s public utilities commission to spend $5 million of ratepayer money to replace a section of the pipe. The money was collected from customers, but the work was never done. Three years later, PG&E won a second approval from the utilities commission to spend another $5 million in ratepayer money to fix the pipe. The money was collected from customers once again, but the work was never done.
Only after the San Bruno tragedy did the commission perform its duties sufficiently to discover that PG&E had diverted $100 million in gas and safety operation funds to “non-safety” spending. This included millions of dollars in pay raises for its executives. “Opportunities were missed that could have and should have prevented this tragedy,” Deborah Hersman, chairwoman of the National Transportation Safety Board, said at the conclusion of its yearlong inquiry. “It was not a question of if this pipe would burst, but when.”
This was the same line of reasoning Judge Alsup was now throwing in the face of PG&E’s team of attorneys. Alsup ruled that the utility had violated the terms of a probation imposed after being convicted of six crimes in the San Bruno case. He then ordered its directors and top executives to board a bus and ride the Skyway and glimpse the gutting of Paradise, if not as an act of contrition then at least to remind themselves of their duties before the new fire season arrived. “The emergency will be on us, and will we see another headline, ‘PG&E Has Done It Again. They’ve Burned Down Another Town’? ” he asked.
“When you connect the dots, you see a culture of arrogance in which the most important thing is the bottom line,” Frank Pitre, an attorney representing dozens of victims, told me. “Time and again, PG&E delays the necessary fixes, callously disregards the safety of California communities, and finds creative ways to not comply with the law. Billions of dollars that should have been invested in infrastructure instead went to pay an 8 percent return to its investors. That is their gold standard.” It was fiction that the California Public Utilities Commission exercised any watchdog role over PG&E, he said. “They don’t have the resources, they don’t have the trained personnel or mindset, to monitor and audit PG&E’s compliance with safety regulations. PG&E can literally get away with murder.”
To fully understand the culture at PG&E, according to Pitre, one needed to go back a decade to the tragedy that struck not the forests of California but a suburban neighborhood on a hillside overlooking the San Francisco Bay. “That’s where you’ll find the fingerprints,” he said. “That’s where you’ll find the DNA.”
On the evening of September 9, 2010, where Earl Avenue intersected with Glenview Drive in the community of San Bruno, a PG&E pipeline ferrying natural gas exploded. The blast knocked houses off foundations and instantly killed several residents. A giant fireball leaped out of the crater and began chasing other residents as they ran from their houses to a safe spot up the hill. The fireball split into two towering columns that hovered above them, roaring and vibrating. The broiler effect stole oxygen from their lungs and movement from their feet. They staggered up the hill and watched the rest of their houses go up in flames. Many did not realize until hours later that heat alone could singe their hair and cook their skin. Eight residents of the Crestmoor subdivision perished, dozens more suffered burns, and 38 houses were destroyed.
Two decades before the blast, the same line had sprung a leak 9 miles away. It took PG&E months to discover these cracks. Fixing the line then became a top priority for the utility, at least on paper. In 2007, PG&E listed the line as posing a “high risk” because of its “likelihood of failure” in an urban area. That same year, PG&E won approval from the state’s public utilities commission to spend $5 million of ratepayer money to replace a section of the pipe. The money was collected from customers, but the work was never done. Three years later, PG&E won a second approval from the utilities commission to spend another $5 million in ratepayer money to fix the pipe. The money was collected from customers once again, but the work was never done.
Only after the San Bruno tragedy did the commission perform its duties sufficiently to discover that PG&E had diverted $100 million in gas and safety operation funds to “non-safety” spending. This included millions of dollars in pay raises for its executives. “Opportunities were missed that could have and should have prevented this tragedy,” Deborah Hersman, chairwoman of the National Transportation Safety Board, said at the conclusion of its yearlong inquiry. “It was not a question of if this pipe would burst, but when.”
This was the same line of reasoning Judge Alsup was now throwing in the face of PG&E’s team of attorneys. Alsup ruled that the utility had violated the terms of a probation imposed after being convicted of six crimes in the San Bruno case. He then ordered its directors and top executives to board a bus and ride the Skyway and glimpse the gutting of Paradise, if not as an act of contrition then at least to remind themselves of their duties before the new fire season arrived. “The emergency will be on us, and will we see another headline, ‘PG&E Has Done It Again. They’ve Burned Down Another Town’? ” he asked.
This article is an excerpt that has been republished with permission - the original 12,000 word article was published by The California Sunday Magazine.
Mark Arax is a contributing writer to The California Sunday Magazine. His book, The Dreamt Land, was published in May. His last piece for the magazine, “A Kingdom From Dust,” was the winner of the James Beard Award for Feature Reporting in 2019.
Mark Arax is a contributing writer to The California Sunday Magazine. His book, The Dreamt Land, was published in May. His last piece for the magazine, “A Kingdom From Dust,” was the winner of the James Beard Award for Feature Reporting in 2019.