FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

April 2, 2019

By Jim Christie

SAN FRANCISCO (Reuters) – A U.S. judge on Tuesday imposed new criminal probation terms on PG&E Corp aimed at reducing the risk that the bankrupt power producer’s equipment will spark more destructive wildfires in wooded areas of California.

U.S. District Court Judge William Alsup of the Northern District of California at a hearing barred PG&E from reissuing dividends so funds can be used to cut wildfire risk by paying for taking down trees and trimming branches that could come into contact with power lines.

The probation stems from PG&E’s felony conviction in a deadly 2010 natural gas pipeline blast in San Bruno, California, near San Francisco, that killed eight people and injured 58 others.

PG&E filed for bankruptcy protection on Jan. 29 in anticipation of liabilities from wildfires, including a catastrophic 2018 blaze, the Camp Fire. It killed 86 people in the deadliest and most destructive wildfire in California history.

At a Jan. 30 hearing, Alsup, who is overseeing the company’s probation, had said he would consider imposing additional probation terms in the aftermath of Camp Fire. San Francisco-based PG&E expects its equipment will be traced as a source of the blaze.

The probation process is separate from San Francisco-based PG&E’s bankruptcy.

Additional probation terms imposed by Alsup on Tuesday will require PG&E to meet goals in a wildfire mitigation plan it unveiled in February.

The goals include removing 375,000 dead, dying or hazardous trees from areas at high risk of wildfires in 2019, compared with 160,000 last year.

The judge said investor-owned PG&E will not be able to pay shareholders until it complies with his new probation terms.

PG&E in December 2017 suspended its quarterly cash dividend, citing uncertainty about liabilities from wildfires in October of that year that struck Northern California.

Before the suspension, however, PG&E paid $798 million in dividends in 2017 and $925 million in 2016, a period in which the company did a poor job of clearing areas around its power lines of hazardous trees, according to Alsup.

Money meant for shareholders should have been spent on efforts to reduce wildfire risks in recent years, Alsup said at Tuesday’s hearing.

“PG&E has started way more than its share of these fires,” Alsup said.

“I want to see the people of California safe,” the judge added.

Lawyers for PG&E did not contest the new terms.

Alsup said he was still considering his proposal from January to require PG&E to shut down power lines during high winds to prevent tree branches from making contact and sparking fires.

(Reporting by Jim Christie; editing by Nick Zieminski and Lisa Shumaker)

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