PG&E board must be ousted amid wildfire woes: big investor
Big investor says entire PG&E must be fired after years of fatal disasters
PG&E’s entire board of directors should be ousted and replaced in the wake of what a big investor describes as a series of failures and blunders that have caused fatal disasters that stretch back nearly a decade, according to a regulatory filing on Thursday.
Among the catastrophes that investor Blue Mountain Capital Management cited: a fatal explosion in San Bruno in 2010, falsification of gas pipeline records over several years from 2012 through 2017, a lethal series of infernos in the North Bay Wine Country and nearby regions in October 2017 and a deadly wildfire in Butte County that essentially destroyed the town of Paradise in November 2018.
“The current PG&E board has not only failed the company and its shareholders, it has failed its customers, it has failed its employees and, it has failed the people of California,” Blue Mountain stated in an open letter to PG&E’s shareholders.
The series of failures presided over by the board of directors, according to Blue Mountain Capital, has severely harmed PG&E.
“The company has lost the public’s trust, and it has severely damaged its relationship with regulators and elected officials,” Blue Mountain Capital stated.
The investment firm noted that roughly half of the current directors were on the board before and after a fatal explosion that PG&E caused in September 2010 — nearly a decade ago — that killed eight and destroyed a San Bruno neighborhood.
In 2015, the state Public Utilities Commission imposed a $1.6 billion penalty on PG&E for causing the explosion, the largest financial punishment ever levied on an American utility.
In 2016, PG&E became a felon when a federal jury convicted the company of crimes it committed before and after the San Bruno explosion.
Blue Mountain became an activist shareholder after it became apparent that PG&E intended to file for a Chapter 11 bankruptcy. By some estimates, PG&E’s mountain of debts and wildfire-related liabilities could total $30 billion.
Blue Mountain believes PG&E actually isn’t insolvent and that state lawmakers, Gov. Gavin Newsom and the PUC should work to seek solutions besides bankruptcy. Blue Mountain’s approach includes what some critics would describe as a bailout of PG&E by state taxpayers and the company’s customers.
“We urge you to exercise your rights and duties as owners” and participate in an election that could result in a completely new board of directors, Blue Mountain stated in its letter. “It is time for shareholders to step up.”
