PG&E Corporation (NYSE:PCG) Q1 2018 Earnings Conference Call - Final Transcript

May 03, 2018 • 12:00 pm ET


PG&E Corporation (NYSE:PCG) Q1 2018 Earnings Conference Call - Final Transcript


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Geisha J. Williams

initiated and enhanced multi-year program to harden our system and increase its resiliency. We are also working with regulators and other stakeholders to enhance procedures in high fire-threat areas. On the legal front, we're addressing what we strongly believe is the inappropriate application of inverse condemnation to investor-owned utilities in the California courts. And finally, we continue to advocate with leaders and policymakers across the state on comprehensive legislative solutions.

I'll focus first on the legislative front, where a coalition of policymakers and other stakeholders are emphasizing the broader reforms needed to address issues such as forest management practices, wildland-urban interface, insurance availability and utility liability, among others. We think this is the right approach, because there is no simple fix. To that point, we were pleased to see the joint statement from Governor Brown and a bipartisan group of key legislative leaders, who in their words will be partnering on solutions this year that will make California more resilient against the impacts of natural disasters and climate change.

These leaders called out five key areas that address the issues our state is facing, including the need to update liability rules and regulations for utility services. It's important to have policies in place to provide a sustainable financial future for the state's energy companies, which is why we believe the legislature needs to end reform inverse condemnation. As a reminder, California is an outlier in applying inverse condemnation liability to events caused by investor-owned utilities equipment. This means, that if a utility's equipment has found to have been a substantial mufti of damage in an event like the wildfires, even if the utility has followed established inspection and safety rules, the utility may be liable for property damages and attorney's fees associated with that event.

So in essence, this is a strict liability approach that presumes a commensurate cost recovery path. And for investor-owned utilities, that's just isn't true. We strongly believe this is not the right approach for our customers or our shareholders. We also are encouraged to hear the members of the California State Senate and Assembly share their perspective on the challenges that inverse condemnation presents for investor-owned utilities and the wild land effects it will have across the state. They recognize that access to affordable capital is essential to funding utility infrastructure. This includes investments at scale that support the state's clean energy goals and enable the safety and the reliability of our system. It also includes funding that is necessary to transform and harden our system in the face of climate change.

We applaud the urgency to resolve these critical issues from both the governor and members of the legislature and appreciate their commitment to timely and comprehensive solutions for all Californians. While we continue to work through the details with legislative leaders over the course of the session which ends in August, we see common ground on many of the issues that have been raised and we look forward to collaborating on solutions. I