By Jim Christie
SAN FRANCISCO (Reuters) – A U.S. choose mentioned on Tuesday that PG&E Corp can not resume dividends and should use the cash to scale back wildfire threat in California, stopping wanting extra expensive measures he proposed earlier this yr.
The brand new felony probation phrases for PG&E are modest in contrast with ones the choose had in thoughts in January and that PG&E mentioned may have value upwards of $150 billion.
The phrases will, nevertheless, maintain PG&E underneath the supervision of Decide William Alsup of the U.S. District Court docket for the Northern District of California and maintain the corporate, which is also in Chapter 11 chapter, to its goal for clearing areas round its energy traces of some 375,000 timber this yr.
PG&E’s probation stems from its felony conviction after a lethal 2010 pipeline blast in San Bruno, California, close to San Francisco, that killed eight individuals and injured 58 others.
PG&E filed for chapter safety on Jan. 29 in anticipation of liabilities from wildfires, together with a catastrophic 2018 blaze, the Camp Fireplace. It killed 86 individuals within the deadliest and most harmful wildfire in California historical past.
At a January listening to, Alsup, who’s overseeing PG&E’s probation, mentioned he felt compelled to suggest further probation phrases within the aftermath of Camp Fireplace. San Francisco-based PG&E expects its gear shall be discovered to have brought on the blaze.
The probation course of is separate from San Francisco-based PG&E’s chapter.
As the corporate faces $30 billion in wildfire liabilities and chapter proceedings, the vitality firm is predicted to call as its new chief govt Invoice Johnson, a supply mentioned on Tuesday. Johnson has been the CEO of the Tennessee Valley Authority since 2013 and is retiring on Friday.
Further probation phrases imposed by Alsup on Tuesday would require PG&E to fulfill objectives in a wildfire mitigation plan it unveiled in February.
The objectives embrace eradicating 375,000 lifeless, dying or hazardous timber from areas at excessive threat of wildfires in 2019, in contrast with 160,000 final yr.
The choose mentioned PG&E won’t be able to pay shareholders till it complies together with his new probation phrases.
Shares fell 2% on Tuesday to shut at $17.66 on the New York Inventory Trade and are down 63% since November 2018 attributable to issues in regards to the firm’s chapter and wildfire liabilities. The shares traded as little as $5.07 in January.
PG&E in December 2017 suspended its quarterly money dividend, citing uncertainty about liabilities from wildfires in October of that yr that struck Northern California.
PG&E paid $798 million in dividends in 2017 and $925 million in 2016, a interval during which the corporate did a poor job of clearing areas round its energy traces of hazardous timber, in accordance with Alsup.
Cash meant for shareholders ought to have been spent on efforts to scale back wildfire dangers lately, Alsup mentioned at Tuesday’s listening to.
“PG&E has began far more than its share of those fires,” Alsup mentioned.
“I need to see the individuals of California secure,” the choose added.
Attorneys for PG&E didn’t contest the brand new phrases, which the corporate considers extra possible than phrases Alsup proposed in January.
To adjust to the phrases Alsup proposed in January, PG&E mentioned it must take away 100 million timber. The corporate added that shutting energy traces throughout excessive winds as Alsup proposed wouldn’t be possible as a result of the traces traverse rural areas to service cities and suburbs.
Idling traces may additionally have an effect on the facility grid in different states, PG&E mentioned.
Alsup on Tuesday mentioned he was nonetheless contemplating his proposal to require PG&E to close down energy traces throughout windy climate to stop tree branches from making contact and sparking fires.