An auditor finds PG&E spent $123 million earmarked for safety upgrades on other things for which it cannot account, and declares there is a clear “fraud risk” at play.
One novel way to keep power equipment from causing wildfires is to bury the power lines underground. This is not a new idea, and even the utility we most love to hate PG&E has spent several hundred million dollars on this commendable goal. The problem? They were supposed to have spent $100 million-plus more, and they can’t say where that $100 million-plus ended up. The Chronicle reports that PG&E diverted $123 million away from efforts at “undergrounding” power lines during the period between 2007 and 2016, according to a new audit. What’s more, KTVU reprints a copy of the full 250-page audit which adds that the missing money is “indicative of fraud risk factors.”
The original intent of this undergrounding of power lines program in 2007 was beautification of natural spaces, not safety. Back in 2007, we did not have as severe a wildfire season, nor a pattern of above-ground equipment causing fires. Now that those factors bring annual horror and hardship to California, a measure called Rule 20A allows PG&E to collect extra rates to fund underground construction of lines that are not susceptible to winds damaging the lines and ultimately causing wildfires.
PG&E collected the extra rates, alright! But in many cases they spent that extra on other matters for which they cannot account. “PG&E ratepayers not only paid more in rates than PG&E spent on the Rule 20A program,” according to the AzP Consulting audit, “the project activity that was performed was done so in a manner that was inefficient and costlier than necessary.”
These infractions happened before PG&E went bankrupt and attracted extra scrutiny, and in 2017 was held accountable for spending the money properly. A spokesperson argues that even the pre-2017 funds set aside for undergrounding were spent responsibly.
“Sometimes these projects are delayed or do not materialize for a number of factors outside of PG&E’s control, such as obtaining easements from property owners, changes in the scope and timing of a project, program qualification, engineering, permitting, or environmental issues,” PG&E spokesman Paul Doherty told the Chronicle.
Granted, we’re talking $123 million over 10 years, which is pretty small potatoes for a company whose annual revenue is around $16.8 billion. But if it had prevented even one wildfire, that would be better money spent than, say, a lavish winery party on the eve of the October blackouts.
Image: Presidio of Monterey: DLIFLC & USAG via Flickr