WEBVTT 00:00:55.579 --> 00:01:02.908 On the record. Good afternoon. Back at evidientary 00:01:02.920 --> 00:01:09.000 hearings in Investigation 1909016. Joining us on the 00:01:09.000 --> 00:01:15.109 bench today is President Batjer. President Batjer, do you have any comments you wish to make? 00:01:15.109 --> 00:01:18.620 Yes, I'll just be brief. Good 00:01:18.632 --> 00:01:22.649 afternoon, Judge Allen and parties. I wanted to say that 00:01:22.649 --> 00:01:28.399 I'm pleased to be able to attend the first day of the hearings today, and your testimony 00:01:28.399 --> 00:01:34.719 on the various elements of PG&E's proposed plan of reorganization. I wanted to also say 00:01:34.719 --> 00:01:40.009 that I appreciate the tremendous amount of time and effort the parties have put into 00:01:40.009 --> 00:01:46.840 the proceedings so far and believe it underscores the monumental importance of the issue that 00:01:46.840 --> 00:01:52.460 is before us. With that, I will pass it back to you, Judge Allen to commence. And I will 00:01:52.460 --> 00:01:54.874 be listening closely. Thank you all very much. 00:01:54.899 --> 00:01:56.929 Thank you, President Batjer. PG&E, 00:01:56.929 --> 00:01:58.821 please call your witness. 00:01:58.846 --> 00:02:03.740 Thank you, Your Honor. Our first witness is Mr William Johnson. 00:02:03.740 --> 00:02:20.483 (inaudible from off mic) 00:02:20.508 --> 00:02:23.070 William Dean Johnson. 00:02:23.070 --> 00:02:24.920 J-O-H-N-S-O-N. 00:02:24.945 --> 00:02:26.610 Thank you. 00:02:26.635 --> 00:02:27.594 Mr Manheim? 00:02:27.619 --> 00:02:30.470 Thank you, Your Honor. Mr. Johnson, can you state 00:02:30.470 --> 00:02:32.769 your position for PG&E, please? 00:02:32.794 --> 00:02:36.700 I'm the President and chief executive officer of PG&E 00:02:36.700 --> 00:02:37.592 Corporation. 00:02:37.617 --> 00:02:38.410 Thank you. 00:02:38.435 --> 00:02:43.540 And you are sponsoring Chapter one of PG&E Exhibit-1 00:02:43.540 --> 00:02:44.985 Is that correct? 00:02:45.010 --> 00:02:46.528 That is correct. 00:02:46.553 --> 00:02:49.320 And was that prepared by you or under your direction? 00:02:49.320 --> 00:02:50.340 It was. 00:02:50.365 --> 00:02:51.500 You have any corrections 00:02:51.525 --> 00:02:52.685 to your testimony? 00:02:52.710 --> 00:02:53.329 I do not. 00:02:53.354 --> 00:02:55.755 Is it true and correct to the best of your knowledge? 00:02:55.780 --> 00:02:56.555 It is. 00:02:56.580 --> 00:02:58.040 Thank you. Mr. Johnson's 00:02:58.040 --> 00:02:59.145 available for cross examination. 00:02:59.170 --> 00:03:02.460 Thank you, Mr. Manheim. Mr Long? 00:03:02.460 --> 00:03:05.930 Yes, thank you, Your Honor. Good afternoon, Mr Johnson. I'm Tom Long with 00:03:05.930 --> 00:03:16.340 TURN. I want to begin by asking you to turn to Page 1-14 of your testimony. Let me know 00:03:16.340 --> 00:03:19.960 when you're there. 00:03:22.719 --> 00:03:24.744 I'm there 00:03:24.769 --> 00:03:30.820 In particular, with reference to the top of paragraph of 00:03:30.820 --> 00:03:38.088 that testimony, and I'll give you just a moment to acquaint yourself with that. 00:03:42.440 --> 00:03:43.055 Yes, sir. 00:03:43.081 --> 00:03:44.261 Okay, now I have, Ah, 00:03:44.285 --> 00:03:53.971 (inaudible from off mic) 00:03:53.996 --> 00:03:55.511 My question based on that paragraph 00:03:55.510 --> 00:04:02.960 is, Mr Johnson, I take it then that you are aware that under AB1054, the 00:04:02.960 --> 00:04:10.680 Commission must find that PG&E's post-bankruptcy governance structure is acceptable in light 00:04:10.680 --> 00:04:15.017 of PG&E's safety history, among other things. That right? 00:04:15.042 --> 00:04:16.925 (inaudible from off mic) 00:04:16.950 --> 00:04:17.709 So can we 00:04:17.709 --> 00:04:23.235 agree then, that PG&E's safety history is very important in this case? 00:04:23.260 --> 00:04:25.161 (inaudible from off-mic) 00:04:25.186 --> 00:04:26.270 Okay, so then 00:04:26.270 --> 00:04:32.930 my question is, how would you characterize PG&E's safety history from the year 2010 00:04:32.930 --> 00:04:35.400 to the present? 00:04:35.425 --> 00:04:41.000 (inaudible response from off mic) 00:04:41.000 --> 00:04:51.120 I somehow turned by mic off, but I've turned it back on. Oh, sorry. Saying 00:04:51.120 --> 00:04:57.080 we've been here about nine and 1\/2, 10 months. And so my exposure to the safety record of 00:04:57.080 --> 00:05:02.250 the last 10 years is through study, through reading, through listening. But I would say 00:05:02.250 --> 00:05:08.600 it's fair to say there've been some significant safety challenges in that last decade. San 00:05:08.600 --> 00:05:13.911 Bruno, Camp Fire, some of the other fires. So I think safety has been an issue, and it's 00:05:13.911 --> 00:05:19.380 certainly a top focus of myself and others at the company today. 00:05:19.405 --> 00:05:21.400 So it's not a good 00:05:21.400 --> 00:05:23.365 safety history, is it? 00:05:23.390 --> 00:05:29.260 You know, it is what it is, how about that? A lot of issues, big issues. 00:05:29.260 --> 00:05:34.860 But we can characterize it however you'd like, but it's plenty of challenges in that 00:05:34.860 --> 00:05:36.878 history. 00:05:36.903 --> 00:05:42.931 Part of the reason I asked the question is that you, as the leader, 00:05:42.930 --> 00:05:51.930 you're the leader of PG&E, at least at the executive level. And I guess I'm trying 00:05:51.930 --> 00:06:00.490 to understand the extent to which you are aware of and acknowledged the depth of the 00:06:00.490 --> 00:06:09.640 company's safety problem. What can you say to us to help us see what, show to us that 00:06:09.640 --> 00:06:12.675 you do understand the depth of the problem? 00:06:12.700 --> 00:06:15.710 Well, I certainly understand the history of 00:06:15.710 --> 00:06:19.470 the problems, and I think I know the depth of the problems today as well as anyone. 00:06:19.470 --> 00:06:23.590 I mean when I came, the first thing I said to the organizations that we're gonna focus 00:06:23.590 --> 00:06:29.889 on safety first, and that has been my focus every day. And I think the organization 00:06:29.889 --> 00:06:36.949 is safer today than it was a year ago. Certainly safer in the wildfire aspects, safer in 00:06:36.949 --> 00:06:42.620 industrial safety. Things are getting better, and part of the reason is because 00:06:42.620 --> 00:06:46.770 there's a tremendous focus on it by me, by the members of management, and by the board. 00:06:46.770 --> 00:06:51.067 This is our primary focus. 00:06:51.092 --> 00:07:01.150 Again, what I'm trying to see is do you acknowledge, as the 00:07:01.150 --> 00:07:07.440 top leader, not as a company, just as you, as the leader, you acknowledge just how serious 00:07:07.440 --> 00:07:12.880 the problems teaching has had in the last, the seriousness of the problems PG&E has 00:07:12.880 --> 00:07:18.473 had in the last decade, including San Bruno Explosion, 00:07:18.485 --> 00:07:23.479 (audio cuts out) a criminal conviction including 00:07:23.479 --> 00:07:29.200 gas distribution recordkeeping violations that led to a $35 million fine by the PUC, 00:07:29.200 --> 00:07:33.940 including the 2017 North Bay wildfires, including the 00:07:33.952 --> 00:07:38.880 2018 Camp Fire. (audio cuts out) long standing problems 00:07:38.880 --> 00:07:46.370 with a Locate & Mark program from 2010 - 2017 that led this Commission to impose a $110 00:07:46.370 --> 00:07:50.479 million penalty. The Kincaid fire from last October. 00:07:50.491 --> 00:07:53.990 (audio cuts out) problems that PG&E had with 00:07:53.990 --> 00:08:07.460 power shut offs last October. You (audio cuts out) What do you say about all of that? Was that just 00:08:07.460 --> 00:08:11.479 evidence of significant challenges? That's all you, that's how you characterize all of 00:08:11.479 --> 00:08:11.833 that? 00:08:11.858 --> 00:08:12.896 No, I would certainly say there are 00:08:12.922 --> 00:08:17.150 substantial problems in the past with safety, leading 00:08:17.150 --> 00:08:23.360 to catastrophe to fatality. I acknowledge all that. That's why on my first day here, 00:08:23.360 --> 00:08:28.550 I said, we're gonna focus on safety first among all things. Let me just say one thing. 00:08:28.550 --> 00:08:36.149 The Kincaid fire has not been attributed yet or causation hasn't been found. So to be clear 00:08:36.149 --> 00:08:44.170 about that, but yeah, there's a significant safety problems in history. I'm trying to fix that. 00:08:44.170 --> 00:08:56.279 So given that history, your efforts to come to grips with it and understand it, what do 00:08:56.279 --> 00:09:03.720 you see, you personally see, as the root cause of those safety problems? 00:09:03.745 --> 00:09:06.200 I don't think there 00:09:06.200 --> 00:09:13.680 is a single root cause. I think there are several contributing causes. One is I 00:09:13.680 --> 00:09:20.400 don't think our first line supervisors have always felt that safety is their job. They 00:09:20.400 --> 00:09:25.089 have felt that production is their job, and if you want to have safe operations, that's 00:09:25.089 --> 00:09:33.690 where safety has to live, every day, is in the first line. We, I believe, are misorganized 00:09:33.690 --> 00:09:38.450 meaning we're spread out in various places, which leads to safety issues. We drive a tremendous 00:09:38.450 --> 00:09:46.180 amount. So I think some organizational changes, and frankly, I think there's been a lack 00:09:46.180 --> 00:09:55.751 of accountability at some levels in the leadership to produce good safety results. 00:09:55.751 --> 00:09:58.089 Thank you. I wanted to follow up on some 00:09:58.101 --> 00:10:00.450 of those items that you mentioned when you mentioned 00:10:00.450 --> 00:10:03.902 first line supervisors. Can you help us understand what you mean by that? 00:10:03.927 --> 00:10:05.053 You know, so these 00:10:05.053 --> 00:10:10.136 are the people that supervised the actual work in the field everyday. 00:10:10.161 --> 00:10:11.830 Okay, are they 00:10:11.830 --> 00:10:14.558 directors or below the level of director? 00:10:14.583 --> 00:10:16.756 They're well, they're below directors. 00:10:16.781 --> 00:10:17.480 Okay, 00:10:17.480 --> 00:10:22.297 are they represented employees or non representative emloyees? 00:10:22.322 --> 00:10:24.209 There are two positions. 00:10:24.209 --> 00:10:29.490 There's a typically a foreman position which runs the crew, which is represented. And then 00:10:29.490 --> 00:10:38.880 there's a supervisor who is the first level of management, not represented. 00:10:42.010 --> 00:10:44.888 And then, toward the end of your your answer 00:10:44.900 --> 00:10:47.790 a moment ago, you talked about a lack of accountability. 00:10:47.790 --> 00:10:52.335 at the at the senior leadership level. Is that what you were saying? 00:10:52.360 --> 00:10:53.850 Yes. 00:10:55.870 --> 00:10:57.885 What did you mean by that? Can you elaborate 00:10:57.897 --> 00:10:59.640 on what you what you meant by the problem there? 00:10:59.640 --> 00:11:02.521 Certainly. It is sort of a generic 00:11:02.533 --> 00:11:05.600 thing. But the senior management of any organization 00:11:05.600 --> 00:11:12.000 is the group responsible for producing the results of the organization. And so, to the 00:11:12.000 --> 00:11:18.459 extent those results weren't being produced, that's where the accountability lies. 00:11:18.459 --> 00:11:20.878 Why was there, to try again, to try to 00:11:20.890 --> 00:11:23.560 understand, this is all in the effort to understand the 00:11:23.560 --> 00:11:30.020 problem so that we can fix it going forward. What was the problem causing a lack of accountability? 00:11:30.020 --> 00:11:33.409 And that I cannot answer because I 00:11:33.421 --> 00:11:36.959 wasn't here. That was before my time. And about 80% 00:11:36.959 --> 00:11:44.820 of the people in that group are no longer with the organization. 00:11:44.845 --> 00:11:47.480 Allow me to just push 00:11:47.480 --> 00:11:56.490 back on that a little bit. Earlier you said you made a study. You've 00:11:56.490 --> 00:12:06.290 been talking to people. Is it fair to say that because I wasn't here, I can't 00:12:06.290 --> 00:12:14.290 try to figure out and come to an understanding as to why we didn't sufficiently hold leadership 00:12:14.290 --> 00:12:15.895 accountable in the past? 00:12:15.920 --> 00:12:20.040 I think it's fair for me to say I don't know what was in the 00:12:20.040 --> 00:12:26.140 hearts and minds of individuals at a time that I wasn't here. And I think the more important 00:12:26.140 --> 00:12:32.839 thing for me to do than to ponder that point is to make sure we're clear on what the expectation 00:12:32.839 --> 00:12:34.627 is going forward. 00:12:36.434 --> 00:12:39.990 How would you explain what the expectation is going 00:12:39.990 --> 00:12:42.327 forward? How would you characterize that? 00:12:42.352 --> 00:12:44.720 That we are going to work our way, over the 00:12:44.720 --> 00:12:51.589 next couple of years, to be one of the best safety performers in both industrial, well, 00:12:51.589 --> 00:12:57.620 industrial and wild fire safety, in the country. Particularly in industrial safety. 00:12:57.620 --> 00:13:00.637 Let me try to clarify my question. In 00:13:00.649 --> 00:13:03.920 terms of executive accountability, which you identify 00:13:03.920 --> 00:13:10.600 it as a problem in the past, how are you going to make, what are you going to do to 00:13:10.600 --> 00:13:14.904 clarify expectations? Regarding executive accountability? 00:13:14.929 --> 00:13:17.130 Well, the first thing is that, 00:13:17.130 --> 00:13:22.860 if you study safety, and particularly industrial safety, leader presence in the field is one 00:13:22.860 --> 00:13:28.280 of the key things that drives safety results. So one of the expectation is that we will 00:13:28.280 --> 00:13:33.430 spend more time in the field with our workers and less time in our offices. We will also 00:13:33.430 --> 00:13:40.570 understand what the safety programs and protocols are. We will enforce those at every meeting. 00:13:40.570 --> 00:13:44.860 We will start with a safety message. Every work group in the morning will start with 00:13:44.860 --> 00:13:52.143 a safety tail board, and we would just emphasize this as our greatest priority. 00:13:52.168 --> 00:13:54.571 Okay, again, 00:13:54.570 --> 00:14:00.220 though, I come back to this issue of executive accountability. I understand what you're saying. 00:14:00.220 --> 00:14:06.990 That there's value to having leaders in the field. But how does that hold them accountable? 00:14:06.990 --> 00:14:10.270 Well, they're accountable for the results. 00:14:10.282 --> 00:14:13.120 On of the ways you produce the results is you get 00:14:13.120 --> 00:14:19.140 closer to the work and closer to the work. And you, coach, you observe work. You coach 00:14:19.140 --> 00:14:24.529 workers on what the standard is. If there's a resource problem, you solve it. That's how 00:14:24.529 --> 00:14:27.738 it leads to accountability for results. 00:14:27.763 --> 00:14:31.770 Mr. Johnson, did you read the presiding officer 00:14:31.770 --> 00:14:37.850 decision in the Locate and Mark investigation? That was the enforcement proceeding brought 00:14:37.850 --> 00:14:43.720 by this Commission's Safety and Enforcement division against (audio cuts out) practices in the 00:14:43.720 --> 00:14:45.198 past decade. 00:14:45.223 --> 00:14:47.886 That was the one that was recently issued. 00:14:47.911 --> 00:14:48.341 Exactly. 00:14:48.366 --> 00:14:48.863 Yes, Yes. 00:14:48.888 --> 00:14:49.631 You have read that? 00:14:49.630 --> 00:14:52.835 I read it. I skimmed it, but I did read it, yes. 00:14:52.860 --> 00:14:55.089 Okay, well, that's good. That's good. Do you 00:14:55.089 --> 00:15:03.240 take away, and in particular, it was, if you'll allow me to paraphrase, it was 00:15:03.240 --> 00:15:09.269 critical of PG&E's management for failing to discover the problem sooner than it 00:15:09.269 --> 00:15:16.399 did. And then once it was made aware of the problem, not acting to correct the problem 00:15:16.399 --> 00:15:22.610 as soon as it should have. Do you accept that as a general summary of what that decision 00:15:22.610 --> 00:15:25.668 said with respect to PG&E's senior Management? 00:15:25.693 --> 00:15:26.207 Yes. 00:15:26.232 --> 00:15:27.750 What do you take away from 00:15:27.750 --> 00:15:31.338 that and what can you learn from that and (audio cuts out) 00:15:31.363 --> 00:15:33.770 Well, there are a couple things in that 00:15:33.770 --> 00:15:41.019 whole episode. One was don't let the hunt for metrics drive your performance. Right? 00:15:41.019 --> 00:15:44.130 And sort of what happened in Locate & Mark was there were some metrics that were going 00:15:44.130 --> 00:15:50.550 to be made come by hook or crook or whatever phrase you want to use. So don't let metrics 00:15:50.550 --> 00:15:55.160 drive your behavior. Metrics are important. They guide your business. But you have to 00:15:55.160 --> 00:16:02.029 be careful with it. Two, I mean, it's a basic, simple thing. Tell the truth. Tell the truth 00:16:02.029 --> 00:16:05.630 about where you are, tell the truth about your problem. If you have something go wrong, 00:16:05.630 --> 00:16:09.135 tell the truth about it. Don't try to cover it up. 00:16:09.160 --> 00:16:09.755 Okay. 00:16:09.780 --> 00:16:11.540 But in terms of, again, senior 00:16:11.540 --> 00:16:16.380 management accountability. So there was a situation in there were one of the senior 00:16:16.380 --> 00:16:23.810 managers of PG&E was made aware of the problems, allocated looking into the problems 00:16:23.810 --> 00:16:30.120 to a subordinate, but then did not follow up on what the subordinate found. What 00:16:30.120 --> 00:16:34.169 are you going to do about that kind of situation going forward? 00:16:34.194 --> 00:16:36.320 Well, part of that is expectation 00:16:36.320 --> 00:16:40.750 management. Do you have the expectation that if you have a problem and you delegated, do 00:16:40.750 --> 00:16:46.100 you know you need to follow up? Do you know you need to close the circle on that issue? 00:16:46.100 --> 00:16:52.210 These are fairly basic management practices. That shouldn't be too hard to understand that 00:16:52.210 --> 00:16:56.022 if you have an issue and you delegated, you need to check on. 00:16:56.047 --> 00:16:57.620 But how are you going? If 00:16:57.620 --> 00:17:07.600 if a senior manager that's working under you does not meet that expectation of following 00:17:07.600 --> 00:17:10.517 up as necessary, What are you going to do? 00:17:10.542 --> 00:17:13.569 It depends on the significance of the issue. 00:17:13.569 --> 00:17:21.350 Certainly a minimum would be counseling and coaching and perhaps termination. 00:17:27.493 --> 00:17:31.083 Alright. I'm gonna shift now to a slightly different 00:17:31.095 --> 00:17:34.221 topic of organizational structure. Governance 00:17:34.220 --> 00:17:38.130 structure, since that, of course, is also an important 00:17:38.142 --> 00:17:41.280 issue in this case. Your title is the Chief 00:17:41.280 --> 00:17:45.158 Executive Officer and President of PG&E Corporation. Is that correct? 00:17:45.183 --> 00:17:46.451 Correct. 00:17:46.450 --> 00:17:48.514 As opposed to the utility, correct? 00:17:48.539 --> 00:17:49.742 Correct. 00:17:49.767 --> 00:17:53.350 How would just, generally, how would you describe your responsibilities 00:17:53.350 --> 00:17:55.228 in that position? 00:17:55.253 --> 00:18:00.861 I'm responsible for the corporate functions and the corporate results. 00:18:00.860 --> 00:18:08.010 So things like earnings, anything corporate, communication, all those things. And I also 00:18:08.010 --> 00:18:16.980 have a hand in overseeing the utility or least contributing to it. But my main area 00:18:16.980 --> 00:18:25.950 of accountability is the corporate programs and the corporate results. 00:18:25.975 --> 00:18:28.940 Mr. Vesey is 00:18:28.940 --> 00:18:32.885 the Chief Executive Officer and President of the utility. Correct? 00:18:32.910 --> 00:18:33.663 Mr Vesey. Yes. 00:18:33.688 --> 00:18:34.201 Ok, thank 00:18:34.200 --> 00:18:36.274 you. Does he report you? 00:18:36.299 --> 00:18:41.890 He actually reports to the chairman of the utility board. 00:18:41.890 --> 00:18:44.771 Okay, so he does not report to you? 00:18:44.796 --> 00:18:46.211 Correct. 00:18:46.236 --> 00:18:53.919 All right. So your responsibility is corporate functions 00:18:53.919 --> 00:19:00.640 and corporate results. Not (audio cuts out) directly utility functions and utility results. 00:19:00.665 --> 00:19:02.880 That's a fair characterization, 00:19:02.880 --> 00:19:08.480 I will say that Mr Vesey and I work pretty closely together on all things, but that's 00:19:08.480 --> 00:19:11.056 a fair characterization. 00:19:11.081 --> 00:19:17.390 What confused me a little bit is that well, putting that 00:19:17.390 --> 00:19:25.490 aside, what does the corporation do that is distinct from the operation of the utility? 00:19:25.490 --> 00:19:33.480 00:19:42.410 functions, external affairs, communications. So all of those kind of functions are in the corp. 00:19:45.655 --> 00:19:52.881 Are they all in service of the operation and management of the utility function? 00:19:52.906 --> 00:19:55.290 They're 00:19:55.290 --> 00:20:00.570 in service of all of the functions. You need all of those functions to run a utility. You 00:20:00.570 --> 00:20:04.730 need corporate communications, internal communications. 00:20:04.742 --> 00:20:08.690 So I think they serve everybody in the organization. 00:20:08.690 --> 00:20:18.299 I feel like I've seen a statistic that 99%, or maybe more of the revenues of PG&E 00:20:18.299 --> 00:20:25.330 corporation are actually revenues of the utilities. Am I on the right wavelength there? 00:20:25.330 --> 00:20:28.321 I don't know what the exact numbers, 00:20:28.333 --> 00:20:31.220 but that's, you're on the right wavelength. Yeah. 00:20:31.220 --> 00:20:35.793 So in terms of, at least what produces 00:20:35.805 --> 00:20:41.020 revenue, the corporation is entirely dependent on, almost 00:20:41.020 --> 00:20:43.731 entirely dependent on the utility. Is that correct? 00:20:43.756 --> 00:20:45.295 That is correct today. Yes. 00:20:45.320 --> 00:20:48.830 And then when 00:20:48.830 --> 00:20:51.700 you say, for example, let's pick a function that, at least, I understand a little 00:20:51.700 --> 00:20:58.990 bit, is the legal function. So you say the corporation is, has the legal function. But 00:20:58.990 --> 00:21:04.610 the legal work that they're doing is on behalf of the utility, for the most part, isn't that right? 00:21:04.610 --> 00:21:08.210 I don't think it's that easy to say. I mean, they're doing securities work for 00:21:08.210 --> 00:21:15.000 the corp, doing legal work for members of the corporation and the utility. I mean, obviously 00:21:15.000 --> 00:21:19.080 the bulk of the work and the bulk of the revenue, and all of that is utility. But I don't think 00:21:19.080 --> 00:21:24.198 the separation you're looking for is that easy. 00:21:24.223 --> 00:21:28.890 To help us understand this a little better, 00:21:28.890 --> 00:21:35.860 I'd like to ask you to turn to what's marked as TURN-X-2. Actually, I'm sorry, Your Honor, 00:21:35.860 --> 00:21:41.830 I believe, maybe, has it been marked on the record yet? This is a cross examination exhibit that 00:21:41.830 --> 00:21:45.582 I've shared with MrJohnson (audio cuts out) 00:21:45.607 --> 00:21:51.040 So there is a, it has not yet been identified for the record. What 00:21:51.040 --> 00:21:57.990 there is is a TURN cross examination exhibit PG&E response to turn data requests 00:21:57.990 --> 00:22:09.740 17-1 to 17-4, including attachment to DR 17-3, and that's identified as TURN-X-2. 00:22:09.740 --> 00:22:13.661 Thank you, Your Honor. Mr. Johnson, do you have been in front of you? 00:22:13.686 --> 00:22:14.968 I do. 00:22:14.993 --> 00:22:16.711 Thanks. 00:22:16.710 --> 00:22:24.110 This is a data request from PG&E, and in particular, I'm interested in asking 00:22:24.110 --> 00:22:31.831 you to, I'd like to ask you to turn to the attachment, which consists of a PG&E organization 00:22:31.831 --> 00:22:37.919 chart, at least excerpts from an organization chart. And if you look at the first page 00:22:37.919 --> 00:22:46.150 of that organization chart, it states at the top, right, that it's as off 1-31-2020. Bottom 00:22:46.150 --> 00:22:52.255 right, it shows page one. Turn to that page, I'd appreciate it. 00:22:52.280 --> 00:22:54.290 I have that page. 00:22:54.315 --> 00:22:59.250 (audio cuts) This 00:22:59.250 --> 00:23:03.187 shows that the top the top box being PG&E Corporation 00:23:03.199 --> 00:23:06.490 has two boxes below it. The left hand box is 00:23:06.490 --> 00:23:10.700 PG&E the utility. And that's led by Mr Vesey, correct? 00:23:10.725 --> 00:23:12.103 Correct. 00:23:12.128 --> 00:23:14.450 And then the, 00:23:14.450 --> 00:23:19.559 right hand box is the Office of President, CEO of the corporation. 00:23:19.559 --> 00:23:21.780 I take it, and that's led by you. Is that correct? 00:23:21.805 --> 00:23:22.520 That's correct. 00:23:22.545 --> 00:23:24.030 Okay. And 00:23:24.030 --> 00:23:33.510 I'd like to ask you then to turn to many pages later in this document, and it's actually 00:23:33.510 --> 00:23:38.187 labeled (audio cuts out) bottom right. Off of what 00:23:38.199 --> 00:23:42.980 number that's below the box in the (audio cuts out) 00:23:42.980 --> 00:23:47.420 Find that. The numbers are sequential, there are many gaps in the numbers in the bottom 00:23:47.420 --> 00:23:53.278 right. But we'll eventually get to page 3283. 00:23:53.303 --> 00:23:57.105 All right, I have paged 32 83. 00:23:57.131 --> 00:23:58.500 Okay. And 00:23:58.500 --> 00:24:07.549 this is labeled at the top office of President and CEO. And this, does this describe then 00:24:07.549 --> 00:24:21.049 is this then the organization chart that shows the organizations that report 00:24:21.049 --> 00:24:22.979 to you? 00:24:23.004 --> 00:24:24.357 Yes. 00:24:24.382 --> 00:24:34.280 So those organizations are, I mean, there's several people that are, like 00:24:34.280 --> 00:24:41.620 executive assistants and others, but in terms of organisation, we have, ethics and compliance. 00:24:41.620 --> 00:24:51.380 I'm seeing, second row. Human resources, loss strategy and policy, finance and risks. Are those 00:24:51.380 --> 00:24:54.812 the organizations that report to you? 00:24:54.837 --> 00:24:59.450 Yes. Those were the ones that report directly to me. 00:24:59.450 --> 00:25:02.202 Are there any others that are not shown 00:25:02.214 --> 00:25:04.659 on this or that I didn't list in my question? 00:25:04.659 --> 00:25:09.793 There are several other organizations 00:25:09.805 --> 00:25:14.950 that report to the senior folks. Like communications 00:25:14.950 --> 00:25:26.050 and legal, that don't report directly to me, but that I interact directly with. 00:25:26.050 --> 00:25:30.457 Don't report to you, but you interact directly with. 00:25:30.469 --> 00:25:34.480 Does that mean that (audio cuts out) have responsibilities 00:25:34.480 --> 00:25:37.840 in those areas, but it's just not reflected in the organization chart? 00:25:37.865 --> 00:25:38.960 I believe I have 00:25:38.960 --> 00:25:43.920 responsibilities for everybody in this entire org chart. But no, it just means that I 00:25:43.920 --> 00:25:47.309 work with, like the General Counsel, I work with every day, the communication people, I 00:25:47.309 --> 00:25:51.202 work with. But they do not report to me. 00:25:51.227 --> 00:25:55.950 I do not see any boxes here, and I think this 00:25:55.950 --> 00:25:59.940 is consistent with what you've already said. But I just wanted to make sure I'm not missing 00:25:59.940 --> 00:26:06.270 something. There's no box for, say, electric operation, for gas operation. That's not a 00:26:06.270 --> 00:26:08.517 (audio cuts out) direct responsibility for. Is that right? 00:26:08.542 --> 00:26:10.265 That's correct. 00:26:11.621 --> 00:26:16.290 Yet you do feel responsible for them. 00:26:16.290 --> 00:26:18.253 Is that fair to say as well? 00:26:18.278 --> 00:26:22.810 I feel responsible for everybody who works there and everything 00:26:22.810 --> 00:26:25.847 they do every day, Yes, 00:26:28.772 --> 00:26:32.618 But it's just not reflected in the organization chart? 00:26:32.643 --> 00:26:33.900 They don't 00:26:33.900 --> 00:26:40.332 all report directly to me. Yes, that's correct. 00:26:41.783 --> 00:26:45.960 Does it make a difference in terms of 00:26:45.960 --> 00:26:54.890 the effective operation of the utility whether or not an organization shows up 00:26:54.890 --> 00:27:04.000 on this chart, say, or that whether it shows up on the operable chart for Mr Vesey? What 00:27:04.000 --> 00:27:09.090 does, what is the significance of having an organization report directly to you, as opposed 00:27:09.090 --> 00:27:12.078 to reporting directly to Mr Vesey? 00:27:12.103 --> 00:27:17.440 A couple. I think. First of all, if all of these things 00:27:17.440 --> 00:27:23.660 reported to one person that would be a lot, probably more than one person could do. 00:27:23.660 --> 00:27:30.590 There's also a little difference in the skill set. So that thing's are reported to Mr Vesey are 00:27:30.590 --> 00:27:36.570 much more operational. Things that report to me are much more corporate, political, 00:27:36.570 --> 00:27:44.789 external, and so it sort of lines up with our backgrounds. But generally they could report 00:27:44.789 --> 00:27:51.997 wherever, that would just be a tremendous amount of reporting the one person. 00:27:52.022 --> 00:27:54.400 Okay, so there's 00:27:54.400 --> 00:28:01.540 there's a need to avoid overburdening a position, I think is what you were just 00:28:01.540 --> 00:28:02.401 saying, is that right? 00:28:02.426 --> 00:28:02.688 Yes. 00:28:02.713 --> 00:28:06.131 Yet there there are proposals. There's there's a reason I'm 00:28:06.130 --> 00:28:12.000 asking this question. There are proposals in PG&E testimony (audio cuts out) some people from 00:28:12.000 --> 00:28:18.110 currently reporting through the utilities CEO, and I'm trying to understand what 00:28:18.110 --> 00:28:22.970 is the significance of that? What does that mean? Why? Why would you? 00:28:22.995 --> 00:28:24.590 For a couple reasons. 00:28:24.590 --> 00:28:30.370 One is just the visibility of them reporting to the highest officer in the corporation. 00:28:30.370 --> 00:28:37.270 That indicates just how important those functions are, and at least the Chief Risk Officer, 00:28:37.270 --> 00:28:43.090 that is as much a corporate function as an operational one, and perhaps more so when 00:28:43.090 --> 00:28:49.080 you think about risk analytics and modeling and those things. But really, the idea there 00:28:49.080 --> 00:28:56.980 is to bring greater visibility, attention, and hence strength to those organizations. 00:29:05.353 --> 00:29:15.371 Excuse me, Mr. Long, can I just ask a clarifying question. When you want to bring 00:29:10.370 --> 00:29:16.590 more attention to those, is that something you're trying to get more attention and visibility 00:29:16.590 --> 00:29:19.308 internally or externally? 00:29:19.333 --> 00:29:25.941 Both, I believe. Not visibility so much externally, but 00:29:25.941 --> 00:29:30.640 credibility. I mean, the other thing that happens with these two jobs is that their 00:29:30.640 --> 00:29:38.159 scope narrows. So, for example, a Chief Risk Officer is now Risk and Audit will become 00:29:38.159 --> 00:29:47.580 just risk. And so credibility, visibility, oomph, whatever the word is, that's an unusual 00:29:47.580 --> 00:29:56.600 word I know. Internally and then to deal externally with entities like the Commission. 00:29:56.600 --> 00:30:03.539 I just, you know, making the higher level position I think will help bring all those 00:30:03.539 --> 00:30:04.846 things to it. 00:30:04.871 --> 00:30:07.762 Thank you. Go ahead, Mr Long. 00:30:17.187 --> 00:30:20.430 You gave the example of elevating the chief 00:30:20.429 --> 00:30:26.803 Risk Officer reporting to you as opposed to reporting to Mr Vesey (audio cuts out) 00:30:26.828 --> 00:30:28.928 Yes. 00:30:28.952 --> 00:30:31.760 And 00:30:31.760 --> 00:30:50.100 benefit of that is to provide more visibility to that position. Or oomph to to use your word. 00:30:50.100 --> 00:30:59.591 (audio cuts out) expressed concern a moment ago about overburdening the position. Does 00:30:59.591 --> 00:31:11.279 it? Is it within the skill set, and I'll lead with that, that the skill set of the 00:31:11.279 --> 00:31:15.696 of the President and CEO of the corporation? 00:31:15.721 --> 00:31:17.869 The current skill set? 00:31:17.893 --> 00:31:20.309 I guess, I guess we'll 00:31:20.309 --> 00:31:23.284 put it that way for (audio cuts out) 00:31:23.309 --> 00:31:28.159 Yeah. I think my experience in safety and risk management 00:31:28.159 --> 00:31:35.310 is as good as anybody else is in the business. So I think it does fit at least my skill set. 00:31:35.310 --> 00:31:41.746 Limited skill set I have. 00:31:44.971 --> 00:31:52.139 I'm going now to shift to a third topic (audio 00:31:52.151 --> 00:31:58.480 cuts out) plan I touch on page one (audio cuts out) 00:31:58.480 --> 00:32:23.784 (audio cuts out) 00:32:23.809 --> 00:32:25.581 Yes, I do. 00:32:28.751 --> 00:32:34.248 (inaudible, mic off) 00:32:46.690 --> 00:32:48.690 There is a plan to make a plan. 00:32:48.715 --> 00:32:50.715 There's an outline 00:32:50.740 --> 00:32:56.490 of a plan. We've actually done a lot of studying on this, but we don't have a final plan to 00:32:56.490 --> 00:33:03.614 submit to the Commission yet. 00:33:03.639 --> 00:33:06.851 (inaudible, mic off) 00:33:06.876 --> 00:33:09.620 Sure. Well, let me back up a step and say 00:33:09.620 --> 00:33:17.100 why we're doing this. I mean, this is a way to get back closer to your customer. I think 00:33:17.100 --> 00:33:20.570 the utility business is a local operating business. Every day when you get close to 00:33:20.570 --> 00:33:24.909 your customers, better for everybody. I think we have, over the years gotten too far away 00:33:24.909 --> 00:33:30.840 from our customers. And I think when you have as much centralisation as we do in such a 00:33:30.840 --> 00:33:36.580 diverse service territory, you know, the Stockton and San Francisco are two different places 00:33:36.580 --> 00:33:41.590 with two different sets of customers and customer interest in those things. This is really about 00:33:41.590 --> 00:33:44.163 one, getting close to a customer, two, local 00:33:44.175 --> 00:33:47.220 decision making and risk management with centralized 00:33:47.220 --> 00:33:55.299 support. So what will this look like? I would predict it will be four or five regions. We have 00:33:55.299 --> 00:34:02.910 studied a number of different models and then we have a number of things to determine. How 00:34:02.910 --> 00:34:13.779 to divide them up? Is this by county? By circuit? By, what is the, what is it? Divisor. And then 00:34:13.779 --> 00:34:20.539 Did you say Divisor? D-I-V-I-S-O-R? 00:34:20.564 --> 00:34:26.720 Yes. I think that's a word. 00:34:26.720 --> 00:34:36.629 I was a liberal arts major. The stage right now is we're 00:34:36.629 --> 00:34:43.569 determining what is a local decision, local function? What is a centralized function and 00:34:43.569 --> 00:34:51.259 what is in between? Those are basically the three buckets and it's gonna take us a 00:34:51.259 --> 00:35:01.559 couple of months, I think, to sort all this out. But I do think it's a good idea. 00:35:01.559 --> 00:35:05.527 Would there be (audio cuts out) both of the electric 00:35:05.539 --> 00:35:09.397 operations and the gas operations be subject (audio cuts out). 00:35:09.422 --> 00:35:12.010 So our current thinking 00:35:12.010 --> 00:35:17.700 and let me focus on current thinking, subject to change, is that we would have some of the 00:35:17.700 --> 00:35:25.440 everyday functions of gas and electric be localized. Responsiveness to the customer. 00:35:25.440 --> 00:35:31.630 Other things you would centralize and keep the way they are, say transmission of electricity, 00:35:31.630 --> 00:35:37.959 transmission of gas, asset management, these things. There's still a lot of work to do 00:35:37.959 --> 00:35:45.359 here, but if you think about our business, responsiveness to day-to-day customer needs, 00:35:45.359 --> 00:35:52.660 relighting pilot lights, hooking up outage lights, the more local you could do that better. 00:35:52.660 --> 00:35:56.400 Current thinking that the gas operations, to the extent that there were 00:35:56.400 --> 00:36:00.440 regions where gas and electric operations that the regions would be the 00:36:00.440 --> 00:36:03.307 same for both gas and electric. 00:36:03.332 --> 00:36:08.579 That's a good general starting proposition. I don't 00:36:08.579 --> 00:36:15.329 know that it will work exactly that way. The other thing we need to make sure of is that 00:36:15.329 --> 00:36:22.059 operating safety, of both gas and electric, we don't take any steps that are anything 00:36:22.059 --> 00:36:27.989 other than positive toward more safe operations. So that's another character 00:36:27.989 --> 00:36:34.900 issue we have to identify as we move forward. 00:36:34.925 --> 00:36:40.910 (inaudible, off mic) element, and you need a little bit 00:36:40.910 --> 00:36:46.469 more time. What is PG&E's thinking? What is your thinking about when PG&E will be 00:36:46.469 --> 00:36:51.368 ready to present a complete proposal? Publicly. 00:36:51.393 --> 00:36:55.450 I don't have a complete answer to that. 00:36:55.450 --> 00:37:01.019 I think there was a assigned Commissioner's ruling in this docket that may ask us some 00:37:01.019 --> 00:37:05.619 questions about this and maybe when we're gonna file a plan. So I don't know the answer. 00:37:05.619 --> 00:37:11.580 But sometime before confirmation, before June 30. 00:37:11.605 --> 00:37:16.229 You would have a well developed plan 00:37:16.229 --> 00:37:18.138 that's ready to present sometime before June 30? 00:37:18.163 --> 00:37:18.774 Correct. 00:37:24.299 --> 00:37:31.170 Will the board be involved in 00:37:31.170 --> 00:37:33.402 shaping this plan in any way? 00:37:33.427 --> 00:37:34.249 Absolutely 00:37:34.274 --> 00:37:41.150 Both regional officers that I think you referenced in your 00:37:41.150 --> 00:37:49.372 testimony, (audio cuts out) 00:37:49.397 --> 00:37:53.319 Again. That hasn't been determined. 00:37:53.319 --> 00:38:00.749 It could go either way. I would think logically, the utility CEO. But they will also have corporate 00:38:00.749 --> 00:38:06.740 functions. I think, like local politics. That's not the right way to say it. Local public affairs 00:38:06.740 --> 00:38:11.765 and those kind of things. We're still working that point. 00:38:11.790 --> 00:38:14.451 I'm going to stop there. Thank 00:38:14.451 --> 00:38:20.240 you for your time today, Mr Johnson. And (audio cuts out) all my questions for now. 00:38:20.265 --> 00:38:22.170 Thank you, Mr Long. 00:38:22.170 --> 00:38:24.892 Let's go off the record for a moment. 00:38:24.916 --> 00:43:02.630 (OFF THE RECORD) 00:43:02.655 --> 00:43:04.719 On the record. While we were off the record, 00:43:04.719 --> 00:43:09.650 we marked some exhibits from Mr Abrams. We'll go over those numbers in a minute. I believe 00:43:09.650 --> 00:43:13.421 the next for cross examination will be Miss Sherrif. Miss Sherrif. 00:43:13.446 --> 00:43:14.940 Thank you, Your Honor. Good 00:43:14.940 --> 00:43:20.340 afternoon, Mr Johnson. Afternoon. My name is Nora Sheriff. I represent the California 00:43:20.340 --> 00:43:26.920 Large Energy Consumers Association, or CLECA, a group of large power customers in PG&E's 00:43:26.920 --> 00:43:32.109 service territory and Southern California Edison Company's service territory. Just one 00:43:32.109 --> 00:43:39.130 quick clarifying question in your discussion with Mr Long, you referenced the term industrial. 00:43:39.130 --> 00:43:47.130 Did you mean industrial in the context of the electric utility or industrial in a broader 00:43:47.130 --> 00:43:48.490 sense? 00:43:48.515 --> 00:43:50.756 I believe I was referencing industrial 00:43:50.768 --> 00:43:52.570 safety. I was talking about compared in the 00:43:52.570 --> 00:43:53.788 utility industry. 00:43:53.813 --> 00:43:55.132 Okay. Thank you. 00:43:55.157 --> 00:43:57.440 Or maybe personnel safety is a better way to describe it. 00:43:57.440 --> 00:44:03.989 Thank you for that clarification. If we could turn to your testimony, Page 1-10. 00:44:03.989 --> 00:44:12.559 You discuss the pending proposals in the safety culture investigation, which include 00:44:12.559 --> 00:44:18.420 periodic review of the certificate of public convenience and necessity for the holding company 00:44:18.420 --> 00:44:24.476 structure. Please let me know when you're a page 1-10. 00:44:24.501 --> 00:44:25.863 I'm at 1-10. 00:44:25.888 --> 00:44:27.339 As you know, 00:44:27.339 --> 00:44:32.940 President Batjer's proposal suggests the possibility of a future review of the certificate 00:44:32.940 --> 00:44:39.059 of public convenience and necessity. Yet you've suggested here a moratorium on the pending 00:44:39.059 --> 00:44:45.420 proposals in the safety culture investigation. At line's not 7 to 9, quote, "for at least the 00:44:45.420 --> 00:44:52.109 "proposed initial time period for the regional restructuring plan." What is that proposed 00:44:52.109 --> 00:44:57.389 initial time period for the regional restructuring plan? 00:44:57.414 --> 00:44:59.890 We will have a plan before 00:44:59.890 --> 00:45:03.734 the Commission before June 30th of this year. 00:45:03.759 --> 00:45:07.410 I understand that's when you plan to submit 00:45:07.410 --> 00:45:15.400 your plan. I'm asking, what time period would you like to hold these other pending proposals? 00:45:15.400 --> 00:45:17.332 Have a moratorium on them? 00:45:17.357 --> 00:45:22.089 You know, there's a practical reality to this statement. First 00:45:22.089 --> 00:45:28.519 of all, I don't quibble with the idea that Commission has the power to review and potentially 00:45:28.519 --> 00:45:34.140 revoke, with due process, a CPCN. So that's really not the issue. The issue here is 00:45:34.140 --> 00:45:40.789 we have to emerge somehow in some form from bankruptcy, and if we are debating at the 00:45:40.789 --> 00:45:46.150 same time what the corporate form or structure is, I don't think both of those things could 00:45:46.150 --> 00:45:52.719 happen at the same time. So the suggestion here is we try the regionalization approach 00:45:52.719 --> 00:45:54.640 and see how that works. 00:45:54.665 --> 00:46:00.319 Again, for how long is it? The five year period that's referenced 00:46:00.319 --> 00:46:06.930 later in the testimony? A five year initial period for the regional restructuring? 00:46:06.930 --> 00:46:11.029 Actually, I think that I would like to have five years. The time will be whatever the 00:46:11.029 --> 00:46:17.999 Commission says the time will be. I think it will take a while to do the restructuring, 00:46:17.999 --> 00:46:24.390 and a while to look at the results, but I can ask for the time. I don't get to decide 00:46:24.390 --> 00:46:26.855 the time. 00:46:26.880 --> 00:46:30.480 Okay. And are you suggesting this 00:46:30.492 --> 00:46:34.249 moratorium on the other pending proposals while the 00:46:34.249 --> 00:46:39.049 regional restructuring plan is in place and has been has been implemented because you 00:46:39.049 --> 00:46:44.022 believe that regional restructuring plan will help PG&E improve? 00:46:44.047 --> 00:46:45.680 Absolutely. I think 00:46:45.680 --> 00:46:47.170 it will help us improve. 00:46:47.195 --> 00:46:51.579 Okay. Are you aware that the discussion of the regional restructuring 00:46:51.579 --> 00:46:57.414 plan in your testimony and then Mr Vesey's testimony lacks detail? 00:46:57.439 --> 00:46:59.940 Yes. I'm quite aware of that fact. 00:46:59.940 --> 00:47:05.940 Do you know when PG&E's next general rate case filing is due? 00:47:05.965 --> 00:47:07.940 I think it's a while. 00:47:07.940 --> 00:47:09.770 2023 or four, maybe. 00:47:09.795 --> 00:47:15.259 Apparently, that's not the right answer. I don't know is the right answer. 00:47:15.259 --> 00:47:19.012 Mr. Johnson, would you accept, subject 00:47:19.024 --> 00:47:22.720 to check perhaps, that your next Phase One filing is 00:47:22.720 --> 00:47:25.209 due in the summer of 2021? 00:47:25.234 --> 00:47:29.524 I will accept. Yes, I will accept that. 00:47:29.548 --> 00:47:31.239 And you have said 00:47:31.239 --> 00:47:42.529 that the company is working on restructuring plan. Do you think given the scope of analysis 00:47:42.529 --> 00:47:51.410 and the scope of work, that you could do, you could develop a complete and detailed regional 00:47:51.410 --> 00:47:58.723 restructuring plan to include in the general rate case filing in the summer of 2021? 00:47:58.748 --> 00:48:01.161 Yes. 00:48:01.160 --> 00:48:05.127 And would it be possible for you to take 00:48:05.139 --> 00:48:08.769 initial steps now towards greater responsiveness to 00:48:08.769 --> 00:48:15.109 customers in a more regional alignment while you're developing that more complete and detailed 00:48:15.109 --> 00:48:18.049 regional restructuring plan? 00:48:18.074 --> 00:48:19.029 Yes 00:48:19.054 --> 00:48:27.569 Later in the in the testimony. And this is not in your 00:48:27.569 --> 00:48:33.119 specific testimony, but you are the head of the organization, as it were, the proposal 00:48:33.119 --> 00:48:37.720 is for the regional restructuring plan to be in place for, quote, "at least five years," 00:48:37.720 --> 00:48:40.289 end quote. Why so short? 00:48:40.314 --> 00:48:47.140 Well, at some point, you would like to measure results, right? 00:48:47.140 --> 00:48:52.439 And see if it was the right answer. I think a five year period is plenty of time to know 00:48:52.439 --> 00:48:57.735 whether this organizational design and structure works. 00:48:57.760 --> 00:49:01.140 Would you be opposed to considering 00:49:01.140 --> 00:49:06.410 eight years, considering the fact that your general rate case cycles are four year periods, 00:49:06.410 --> 00:49:12.369 so you would have two general rate case cycles with which to fully implement the plan and 00:49:12.369 --> 00:49:18.489 then review and analyze the impact of that greater regionalisation. 00:49:18.514 --> 00:49:20.529 I wouldn't be opposed 00:49:20.529 --> 00:49:28.130 to that as a general proposition. If in year five or six we figured out this wasn't the 00:49:28.130 --> 00:49:34.930 right idea, I would hate to be bound to continue it. I do think it's the right idea. I 00:49:34.930 --> 00:49:39.539 don't think that will happen. So as a general proposition, yes, on eight years. 00:49:39.539 --> 00:49:46.599 But, you know, we should think about this as we go along and evaluate as we go along. 00:49:46.599 --> 00:49:54.239 And, PG&E has also suggested in other forums that the public safety power shut off 00:49:54.239 --> 00:50:02.670 events would occur for 10 years. Would you consider committing PG&E to the regional 00:50:02.670 --> 00:50:08.920 restructuring plan for a period of 12 years, so three general rate case cycles, with 00:50:08.920 --> 00:50:15.380 the caveat that if it's clearly not working out, there could be due process and evidence 00:50:15.380 --> 00:50:22.490 to show that and things can change, but committing it to a 12 year period to extend beyond the 00:50:22.490 --> 00:50:31.303 10 years proposed for the public safety power shut off events? 00:50:31.328 --> 00:50:35.780 This is a hard question because 00:50:35.780 --> 00:50:43.309 it's tied to a 10 year PSPS plan that I think we need to shorten to a much shorter period 00:50:43.309 --> 00:50:54.819 to the extent we can. You know, I'm committing, people who will be sitting in this chair 00:50:54.819 --> 00:51:03.069 long after I am to an organizational design here. Which I hate to do for more than eight years. 00:51:03.069 --> 00:51:11.509 Just seems for me to make a decision for other people 10 years from now would be difficult. 00:51:11.509 --> 00:51:16.002 Thank you, Mr Johnson. Thank you, Your Honor. I have nothing further. 00:51:16.027 --> 00:51:17.500 Thank you, Ms. Sheriff. 00:51:17.499 --> 00:51:21.605 Let's go off the record. 00:51:21.630 --> 00:51:24.538 (OFF THE RECORD) 00:51:40.356 --> 00:51:43.220 On the record. While we're off 00:51:43.220 --> 00:51:51.529 the record, earlier, Mr Abrams provided his exhibits. Both his previously served testimony 00:51:51.529 --> 00:51:59.420 and a number of cross examination exhibits. So, document William B. Abrams reply testimony, 00:51:59.420 --> 00:52:12.200 dated February 21, 2020, is marked as Abrams-1. Cross examination exhibit. 00:52:12.200 --> 00:52:17.469 My version has a handwritten cover sheet. William B. Abrams, Exhibit A, motion to reconsider 00:52:17.469 --> 00:52:24.719 TCCRSA. Which is a cover sheet on a filing from the United States Bankruptcy Court. 00:52:24.719 --> 00:52:37.000 It's marked his Abrams-X-2. Next exhibit. William B. Abrams Exhibit B. Objection to 00:52:37.000 --> 00:52:42.210 note holders RSA, cover sheet that's hand written over a filing from the U. S. Bankruptcy 00:52:42.210 --> 00:52:52.839 court is marked as Abrams-X-3. Next is William B. Abrams Exhibit C, victim letters 00:52:52.839 --> 00:53:00.709 to the court, which is a series of attachments that is marked as Abrams-X-4 00:53:00.709 --> 00:53:12.009 And then we have William B. Abrams, Exhibit D. Governor Newsom, December 13th letter 00:53:12.009 --> 00:53:17.685 is marked as Abrams-X-5. Mr. Abrams, you may go ahead. 00:53:17.710 --> 00:53:21.400 Thank you, Your Honor. Mr. Johnson, 00:53:21.400 --> 00:53:25.459 thanks very much for being here and taking my questions. Just wanted to give you a little 00:53:25.459 --> 00:53:35.609 background on who I am. I am not a attorney and so I'm sure my questions will be different 00:53:35.609 --> 00:53:42.949 than the others that came before me. I am a wildfire survivor. I am a victim of the 00:53:42.949 --> 00:53:50.390 PG&E wildfires in 2017. I've been working since that time to work collaboratively as 00:53:50.390 --> 00:53:53.832 best as I can towards solutions as we move forward. 00:53:53.844 --> 00:53:56.700 And I appreciate the challenges associated 00:53:56.700 --> 00:54:01.469 with PG&E, and I'm here today to try to work towards solutions. So I hope you take 00:54:01.469 --> 00:54:07.150 that and I will do my best to try to separate my emotionality around these issues 00:54:07.150 --> 00:54:09.779 from the pragmatic tasks ahead. 00:54:09.804 --> 00:54:10.685 Thank you. 00:54:10.710 --> 00:54:19.049 Thanks. So on a page one of your testimony, 00:54:19.049 --> 00:54:25.990 you indicated that PG&E's in the process of making and is dedicated to transformative 00:54:25.990 --> 00:54:30.327 change. And I was wondering if you would characterize 00:54:30.339 --> 00:54:34.849 what is in the plan of reorganization as transformative 00:54:34.849 --> 00:54:36.704 change. 00:54:36.729 --> 00:54:39.434 I believe when all of the steps are 00:54:39.446 --> 00:54:42.269 taken, it will amount to transformative change. Yes. 00:54:42.269 --> 00:54:48.799 And are you referring to, because I think in some circles, some of these things 00:54:48.799 --> 00:54:55.710 are a bit conflated in terms of the testimony around the plan of restructuring versus the 00:54:55.710 --> 00:55:02.949 actual legal document that's going to be put into the bankruptcy court. Can you clarify? 00:55:02.949 --> 00:55:06.035 Is it, do you mean which of those you mean? 00:55:06.060 --> 00:55:08.630 my reference here is more toward the 00:55:08.630 --> 00:55:16.079 materials filed in this docket in this proceeding, more related to AB1054 and the Commission's 00:55:16.079 --> 00:55:22.789 jurisdiction on whatever other basis. I think there are some of this in the bankruptcy 00:55:22.789 --> 00:55:25.492 filing but more here. 00:55:25.517 --> 00:55:33.600 Okay, and part of my concern and other victims has been 00:55:33.599 --> 00:55:37.471 that as you can imagine, over the years, 00:55:37.483 --> 00:55:42.410 understanding what PG&E has stated publicly doesn't 00:55:42.410 --> 00:55:51.079 always match what is necessarily in the plan and committed to in terms of dollars and cents, 00:55:51.079 --> 00:56:00.920 in terms of staffing. How do you sort of reconcile the fact that there are 00:56:00.920 --> 00:56:07.189 these separate documents filed with CPUC around what you intend to do, which, of 00:56:07.189 --> 00:56:13.461 course, could change based on the situations in what you commit to do legally in the US 00:56:13.461 --> 00:56:15.646 Bankruptcy court? 00:56:15.671 --> 00:56:22.200 Well, first of all, if I say something, I write something down, I'm 00:56:22.199 --> 00:56:26.697 gonna do it. Let's, I'm gonna start there. If I make 00:56:26.709 --> 00:56:31.049 a commitment, you can count on it. But here there' 00:56:31.049 --> 00:56:40.479 sort of a virtuous cycle or circle. The Commission has to approve what it does. The 00:56:40.479 --> 00:56:44.309 bankruptcy court has to approve of what it does, and then they sort of have to approve 00:56:44.309 --> 00:56:52.359 of what each other does. There was a multi level approval process that I think will knit 00:56:52.359 --> 00:56:55.685 all of these things together. 00:56:55.710 --> 00:57:02.221 And would it be fair to expect, as a victim who is, you 00:57:02.221 --> 00:57:09.049 know, soon to be part of a trust where 50% of they're rebuilding their homes and their 00:57:09.049 --> 00:57:18.049 lives is is counted on that an expectation that what is in testimony and what is submitted 00:57:18.049 --> 00:57:26.352 to the CPUC will be incorporated into the plain of restructuring? 00:57:26.377 --> 00:57:29.120 So I'm not quibbling 00:57:29.119 --> 00:57:34.900 at all with what you said. I don't know how things get in from one document to the other, 00:57:34.900 --> 00:57:41.109 but I think they will both be approved or maybe approved as one document, and the commitments 00:57:41.109 --> 00:57:46.247 in those documents, I fully intend to keep, regardless of if its one or two. 00:57:46.272 --> 00:57:47.960 Yeah, I appreciate that. 00:57:47.959 --> 00:57:53.109 And, part of the reason why I'm asking that question is in reference to what you 00:57:53.109 --> 00:57:59.410 said in earlier statement that, you know, you are responsible for what you're responsible 00:57:59.410 --> 00:58:06.400 while you're here in this position, and that folks who come after you, may not be bound 00:58:06.400 --> 00:58:13.229 by the same words that you speak here or the testimony and may count on something more 00:58:13.229 --> 00:58:21.440 formal for the path ahead. And while other parties may look one year in the 00:58:21.440 --> 00:58:28.089 future or five years into the future for a PG&E, you know, it's really the residents, it's 00:58:28.089 --> 00:58:33.429 the ratepayers, its victims, who live around the PG&E lines who are rebuilding 00:58:33.429 --> 00:58:37.059 their home and don't want that to be just a five year investment. But they want that 00:58:37.059 --> 00:58:47.130 home to be a long-term investment. And so, you know, counting on and trusting is 00:58:47.130 --> 00:58:55.969 something that is difficult to do. And so marrying that and making sure that it's formally 00:58:55.969 --> 00:59:02.049 submitted would provide a lot of reassurance to those who are looking for it. Would you 00:59:02.049 --> 00:59:03.624 agree with that? 00:59:03.649 --> 00:59:08.349 I would agree with that, and I would agree with the fact that that's 00:59:08.349 --> 00:59:16.769 something we need to do. Can I say something here in response here? I don't know this for 00:59:16.769 --> 00:59:23.229 a fact, but I believe this to be true, that this proceeding and the scrutiny that the 00:59:23.229 --> 00:59:27.749 company is under from the Commissioners, the Commission, the Governor's office, 00:59:27.749 --> 00:59:32.720 I'm pretty sure the state has never seen anything like this before. And perhaps no state has 00:59:32.720 --> 00:59:39.999 seen this, and my point here is, I believe, the Commission and whoever else has a say 00:59:39.999 --> 00:59:48.759 is going to hold us to these commitments. I mean, there's the recent ruling 00:59:48.759 --> 00:59:53.769 about the additional testimony we need to file. That looked to me like an exercise 00:59:53.769 --> 01:00:01.929 in holding us to our commitments. So I just share that. I think that, you know, we say 01:00:01.929 --> 01:00:06.227 people who will make sure we do it, including me, but not limited to me. 01:00:06.252 --> 01:00:07.660 I appreciate that. 01:00:07.660 --> 01:00:13.809 Thank you. You know, I think the commitment is is really key. And one of the things 01:00:13.809 --> 01:00:20.699 that I think is difficult with some of the testimony and some of what's been 01:00:20.699 --> 01:00:29.640 said are what you mentioned earlier that, you know, safety, a safety first focus. 01:00:29.640 --> 01:00:37.059 And I think for those who have been here in PG&E service territory for a very long 01:00:37.059 --> 01:00:46.109 time, we have heard that mantra for a very long time. And so a commitment of safety first 01:00:46.109 --> 01:00:56.209 focus often rings hollow from whoever is sitting in your chair. And you know, myself and 01:00:56.209 --> 01:01:04.219 others, victims, residents are looking for the metrics. And I know you said that that is 01:01:04.219 --> 01:01:11.141 a difficult thing, and you have to be careful where those are applied but part of what I was 01:01:11.141 --> 01:01:19.929 hoping to see in the plan of reorganization is a commitment to 30% reduction in risk over 01:01:19.929 --> 01:01:26.509 x period of time, and measurement of that risk so that we can get over this trust gap 01:01:26.509 --> 01:01:28.452 and get beyond-- 01:01:28.477 --> 01:01:34.280 Mr. Abrams, if you can try and make it more of a question and 01:01:34.279 --> 01:01:41.250 less of a statement so that, this is the time for cross examination rather than quite as 01:01:41.250 --> 01:01:45.269 much of a dialogue. And I understand that you have a deep background on this, but if 01:01:45.269 --> 01:01:50.569 you could focus on the specific questions you have for Mr Johnson that would help us 01:01:50.569 --> 01:01:51.617 move it along. 01:01:51.642 --> 01:01:54.760 I'll try to be more direct. I was tryingto provide background, but I appreciate 01:01:54.759 --> 01:01:57.870 that. Thank you, Your Honor.. 01:01:57.895 --> 01:02:00.230 Thank you. Go ahead. 01:02:00.256 --> 01:02:05.059 So directly, safety metrics, performance 01:02:05.059 --> 01:02:11.489 metrics that residents can rely on. Can those be built into the plan? And can those be tied 01:02:11.489 --> 01:02:20.349 to what your investors receive and what ratepayer reimbursement you receive? Can that be a 01:02:20.349 --> 01:02:24.634 goal of this plan of reorganization? 01:02:24.659 --> 01:02:31.419 It certainly can be a goal and a result for the company 01:02:31.419 --> 01:02:37.199 to show risk mitigation through its metrics. In fact, I think we've done that. I think 01:02:37.199 --> 01:02:45.390 it Mr Lowe's testimony, that's exactly what we're showing, that we will have incentives 01:02:45.390 --> 01:02:56.979 for the workers that are 75% focused on safety. And now, that safety requires risk reduction. 01:02:56.979 --> 01:03:06.099 We measure that in terms of, say, ignitions avoided, system miles hardened, those things. 01:03:06.099 --> 01:03:12.199 But those are all risk reduction measures. There'll be another set of metrics that go 01:03:12.199 --> 01:03:17.269 with the wildfire plan that we will develop in conjunction with the Commission. That will 01:03:17.269 --> 01:03:25.589 be the same exact thing, which is all focused on mitigation of the wildfire risk. So I think 01:03:25.589 --> 01:03:29.903 we're headed exactly on the path you've described. 01:03:29.928 --> 01:03:33.709 And where's the tie to the the return? 01:03:33.709 --> 01:03:42.210 So, part of what I'm concerned about is that what you've laid out, assuming that that's 01:03:42.210 --> 01:03:48.075 how we proceed, is disconnected from the return that 01:03:48.087 --> 01:03:53.410 investors shareholders receive and disconnected 01:03:53.410 --> 01:04:00.869 from ratepayer reimbursement. So, you know, from someone who has worked in a bunch of 01:04:00.869 --> 01:04:07.359 corporations, you know, part of what I understand is the dollars are important and, 01:04:07.359 --> 01:04:14.109 you know, really primary motivators for how a corporation should operate, amongst other 01:04:14.109 --> 01:04:20.942 things. So how do we make sure that the dollars are tied to the performance? 01:04:20.967 --> 01:04:23.220 I think the, let's 01:04:23.219 --> 01:04:31.150 say return, shareholder return is tied directly to performance already. This is how the 01:04:31.150 --> 01:04:39.759 company got in bankruptcy. All right. The performance was such that there was no return 01:04:39.759 --> 01:04:45.119 to the investor. I don't think it's a good idea to try to condition the return in a rate 01:04:45.119 --> 01:04:53.239 setting concept to any particular metric like safety. I think that is a financial function 01:04:53.239 --> 01:05:00.459 of the cost to raise capital to pay for the use of that capital. But I do think the performance 01:05:00.459 --> 01:05:04.801 of the entity, particularly in safety, particularly 01:05:04.813 --> 01:05:08.999 here, is gonna bear directly on the shareholder's 01:05:08.999 --> 01:05:15.529 returns. If you don't perform, that return's not gonna be good. So I think they're linked 01:05:15.529 --> 01:05:16.902 already. 01:05:16.927 --> 01:05:21.020 I appreciate that. And the reason why I am asking that question, and just by 01:05:21.020 --> 01:05:27.509 way of example, you know, one of the corporations that I used to work for was Bell Atlantic, 01:05:27.509 --> 01:05:34.049 became a Verizon, and realized that, you know, the financials didn't match what they were 01:05:34.049 --> 01:05:38.950 doing with Verizon Wireless. It was needed to be innovative and needed to be, as you 01:05:38.950 --> 01:05:46.660 stated in your testimony, transformative, and so part of what they did was to really carve 01:05:46.660 --> 01:05:53.800 out Verizon Wireless with longer term investment horizons, so there wasn't so much of the company 01:05:53.800 --> 01:06:02.209 that they were used to was driven out by the short term yield because that was problematic 01:06:02.209 --> 01:06:09.829 to looking forward and competing in that wireless marketplace that required innovation. 01:06:09.829 --> 01:06:18.359 So I know you have been receiving a lot of suggestions regarding innovations to the 01:06:18.359 --> 01:06:25.279 grid and to whatever extent you feel that innovation in terms of the business processes 01:06:25.279 --> 01:06:32.829 and the technology is important, wouldn't orienting the finances to that longer term 01:06:32.829 --> 01:06:35.712 horizon be effective? 01:06:35.737 --> 01:06:44.360 Yes. I think you should always play the long game, strategically, financially 01:06:44.359 --> 01:06:50.489 and otherwise. That's one reason we have put out there a five year plan to show you, 01:06:50.489 --> 01:06:56.439 the public, at least, what the next five years are. But yeah, I certainly agree with 01:06:56.439 --> 01:07:00.805 the importance of a strategy that goes long, 01:07:00.830 --> 01:07:04.880 And one of the reasons why I, excuse 01:07:04.880 --> 01:07:10.839 me, why I bring that up is you know, part of what I've seen developing in this plan of 01:07:10.839 --> 01:07:19.719 reorganization, and the restructuring support agreements that you referenced in your testimony, 01:07:19.719 --> 01:07:26.410 is that the longer term investors are, gonna get a little drink here. The longer term investors 01:07:26.410 --> 01:07:31.689 who have been with the company for a long time now, the bondholders, the noteholders, 01:07:31.689 --> 01:07:40.059 who had a competing plan drop that because they were able to hedge and get asset liens 01:07:40.059 --> 01:07:50.219 and protect their investments over the short term. I'll do the same thing. Thank you. 01:07:50.219 --> 01:07:57.650 Protect their interests over the short term. And so the investors that are really there 01:07:57.650 --> 01:08:02.910 because they have to be for the long-term, the way this is restructured, are the victims. 01:08:02.910 --> 01:08:11.890 So 21% of shares will be held by this victim trust. And so I'm concerned as not being 01:08:11.890 --> 01:08:20.660 a CFA, certified financial analyst, myself that when I see investors who are more savvy 01:08:20.660 --> 01:08:26.920 than I am positioning themselves and only dropping their plan when they have asset lins 01:08:26.920 --> 01:08:34.089 and are hedging and are waiting for eventualities that may occur, whether that be the next wildfire 01:08:34.089 --> 01:08:40.329 or a public takeover or whatever those things are. When I see them doing that, who know 01:08:40.329 --> 01:08:47.490 more than I and are more financially savvy, I worry about the longer term implications 01:08:47.490 --> 01:08:58.380 for investments by the public, investments by unsecured shareholders and victims. Can 01:08:58.380 --> 01:09:02.188 you help me understand that? 01:09:02.213 --> 01:09:11.299 There's a lot to unpack there. So whenever you're in a distressed 01:09:11.299 --> 01:09:18.099 asset situation, I've learned a lot of new terms in the last year. Distressed asset situation. 01:09:18.099 --> 01:09:21.460 You're gonna have money that comes in and goes out. There are people that do this for 01:09:21.460 --> 01:09:28.049 a living, right? And that's just the way that is. What we're trying to do is set 01:09:28.049 --> 01:09:36.159 up a situation where we have the traditional, usual way utility investors come back 01:09:36.159 --> 01:09:44.609 into the stock. And the traditional people that are in the in the debt markets. Particularly 01:09:44.609 --> 01:09:49.859 in the equity and one of my personal goals, frankly, I mean, one of the reasons I came 01:09:49.859 --> 01:09:55.090 here was to help victims get paid. And so I want to do everything I can to make that 01:09:55.090 --> 01:10:02.989 stock and that trust go up in price and value, so that when the trust sells it, people like 01:10:02.989 --> 01:10:09.230 you get the compensation you deserve. That's really one of the things I'm focused on. 01:10:09.230 --> 01:10:11.711 Thank you. And certainly there are a lot of 01:10:11.723 --> 01:10:14.090 victims out there who appreciate that. And I appreciate 01:10:14.090 --> 01:10:15.915 that being said, and-- 01:10:15.940 --> 01:10:20.027 Just a minute, please. Let's go off the record for a second? 01:10:20.052 --> 01:10:34.478 (OFF THE RECORD) 01:10:34.503 --> 01:10:37.421 On the record. 01:10:37.420 --> 01:10:39.300 Go ahead, Mr Abrams. 01:10:39.325 --> 01:10:44.940 Thank you. Thank you. One of the points that you make, which I think 01:10:44.940 --> 01:10:52.960 you just spoke to, is this issue of fairness. And it's it's one of these things that 01:10:52.960 --> 01:10:59.601 gets talked a lot about about what is fair. And I guess this points to some of that, some 01:10:59.601 --> 01:11:07.950 of those issues that you mentioned, which is, you know, really the only group, of 01:11:07.950 --> 01:11:15.659 claimants in this plan of restructuring that are getting compensated in unsecure stock 01:11:15.659 --> 01:11:26.989 are the victims. And so you would think, for fairness purposes, that the investors who are 01:11:26.989 --> 01:11:33.699 more savvy, who are more connected to the company, would be those with those unsecured 01:11:33.699 --> 01:11:41.600 standing. So that victims, to your point, who you have made a first priority in your 01:11:41.600 --> 01:11:51.469 testimony are the ones who are paid in cash, and it, you know, and part of this also goes 01:11:51.469 --> 01:11:59.650 to the point of fairness, in that, let me just very quickly make a brief analogy. A man burns 01:11:59.650 --> 01:12:07.510 down your home, doesn't have enough money to pay for it. He says, "look I can only pay you 01:12:07.510 --> 01:12:13.130 "for 50% of your rebuilding costs. But I got a great investment for you for the rest of 01:12:13.130 --> 01:12:21.389 "the 50%. Trust me, I got you covered." Doesn't strike me is really fair. And so I know an 01:12:21.389 --> 01:12:27.610 individual isn't exactly like a corporation. But you would think in a plan of restructuring 01:12:27.610 --> 01:12:33.980 in terms of the priorities that you state in your testimony that you would make that 01:12:33.980 --> 01:12:37.630 a top priority to make sure that those victims are made whole in cash and that the folks 01:12:37.630 --> 01:12:44.219 who are more savvy investors who understand how to hedge their risk are the ones who are 01:12:44.219 --> 01:12:50.909 subject to the changes in the marketplace and more subject to the next wildfire. Is 01:12:50.909 --> 01:12:52.012 that fair? 01:12:52.037 --> 01:12:55.320 Your Honor, at this point, I'm going to object. I think we've crossed over 01:12:55.320 --> 01:12:58.321 to the issues that are in bankruptcy court not before this Commission. 01:12:58.346 --> 01:13:00.090 Well, I think there's a question 01:13:00.090 --> 01:13:06.219 here if Mr Johnson can answer it. I think if Mr Abrams, if I'm understanding the question you're 01:13:06.219 --> 01:13:12.449 asking, is there a reason why the victims are unsecured and the investors are secured? 01:13:12.449 --> 01:13:13.699 Is that correct? 01:13:13.724 --> 01:13:17.449 That's correct. And it's because of the future of the company, right? 01:13:17.449 --> 01:13:23.780 So part of the reason why I'm asking it is because this is who's going to be responsible. 01:13:23.780 --> 01:13:29.146 Objection's overruled. You may answer the question if you understand it. 01:13:29.171 --> 01:13:30.935 Thank you. 01:13:33.320 --> 01:13:44.920 I'm trying to say this in a intelligent way, which is eluding me. Fairness, you know, often in 01:13:44.920 --> 01:13:51.949 the eye of the beholder. And I do not get to make the rules in the bankruptcy courts of the 01:13:51.949 --> 01:14:02.020 United States. Nor did I have a hand in the, in fashioning the settlements or the RSAS, 01:14:02.020 --> 01:14:10.030 or any of those things. You know, that is the work of a series of legal 01:14:10.030 --> 01:14:16.760 and financial professionals and they know that work, and I don't. So, I understand 01:14:16.760 --> 01:14:23.670 exactly what you're saying. I'm gonna do everything I can to make that stock valuable, 01:14:23.670 --> 01:14:32.630 but I can't, I can't fix this issue, so I just can't, I don't have the power to do it. 01:14:32.630 --> 01:14:39.409 And help me understand that. Or help help us understand that. As the CEO, if you 01:14:39.409 --> 01:14:45.289 were to instruct those who are putting this deal together to say I've stated my top priority 01:14:45.289 --> 01:14:52.750 is the victims, go get it done. Is that not something that you have the authority to do? 01:14:52.750 --> 01:14:55.948 I'm not sure I do, because that deal, 01:14:55.960 --> 01:14:59.230 for lack of a better word, I'm not using a pejorative 01:14:59.230 --> 01:15:01.792 term. You know, there's an official tort claimant's 01:15:01.804 --> 01:15:04.130 committee in the bankruptcy court, an official 01:15:04.130 --> 01:15:08.130 committee. That means something in bankruptcy, that these are the people representing 01:15:08.130 --> 01:15:13.929 the tort claimants interest. We have a plan sponsor on our side. And before that, there 01:15:13.929 --> 01:15:21.789 were a couple of plan sponsors. They're the ones that make these arrangements. And then 01:15:21.789 --> 01:15:25.514 do we support 'em or not? That's really how it works. 01:15:25.539 --> 01:15:27.860 So your understanding is that the 01:15:27.860 --> 01:15:33.276 Tort Claimants Committee are the folks who went in that direction? 01:15:33.301 --> 01:15:35.081 Well, I think a 01:15:35.081 --> 01:15:41.210 bunch of folks went in that direction come because that's where it ended up. So a bunch 01:15:41.210 --> 01:15:46.738 of everybody had to go in that direction at some point. 01:15:46.763 --> 01:15:49.699 Okay, thank you. Also on page 01:15:49.699 --> 01:15:55.300 one of your testimony, you state that safe and reliable service, I think it's third on 01:15:55.300 --> 01:16:02.449 the list. I'm not sure it was necessarily in priority order. I'm wondering how, at 01:16:02.449 --> 01:16:11.350 the executive level, are you measuring safe and are you measuring reliable? So what are 01:16:11.350 --> 01:16:17.480 those charts and figures that you look at to assess whether we're operating safely and 01:16:17.480 --> 01:16:19.503 reliably. 01:16:19.528 --> 01:16:22.687 So let's start with safety. There are 01:16:22.699 --> 01:16:25.571 two main categories. Personnel safety, which is 01:16:25.570 --> 01:16:32.180 things like dart rate, OSHA rate, how well our own employees and our folks working 01:16:32.180 --> 01:16:37.190 safely. And then there are external measures. And the real external measure of focus at 01:16:37.190 --> 01:16:44.750 the moment has to do with wildfire mitigation. Right? So if we had catastrophic wildfires, 01:16:44.750 --> 01:16:50.070 Are we doing the right thing in PSPS? All those things. There's a bunch of metrics 01:16:50.070 --> 01:16:57.409 that go with that. So a sort of public safety and personnel safety measures. Reliability 01:16:57.409 --> 01:17:04.500 is, used to be easy. It used to be how many outages, how long did they last and what 01:17:04.500 --> 01:17:12.840 caused them? Reliability now also has to take into account the impacts of PSPS events. 01:17:12.840 --> 01:17:19.090 How big was the scope? How long did it last? How long was restoration? So that has 01:17:19.090 --> 01:17:24.149 been added to the measures of reliability. 01:17:24.174 --> 01:17:29.560 Mr Pender in the Wildfire Mitigation plan 01:17:29.560 --> 01:17:41.659 proceeding mentioned that PG&E was looking to have shorter public PSPS events, but perhaps 01:17:41.659 --> 01:17:51.280 more of them during a period of extreme weather. And I'm wondering how PG&E came to the 01:17:51.280 --> 01:18:00.150 point of understanding that more power shut offs rather than an extended power shut off. 01:18:00.150 --> 01:18:07.760 So just to put a example out there, one power shut off for two days versus five power shut 01:18:07.760 --> 01:18:14.520 offs all being an hour and 1\/2 each, over those, that same period of time. What brought 01:18:14.520 --> 01:18:18.705 the company to the understanding that that was the better path forward? 01:18:18.730 --> 01:18:20.100 So, first of 01:18:20.100 --> 01:18:27.469 all, I am not familiar with him saying that. I'm not questioning it, but I'm just not familiar 01:18:27.469 --> 01:18:36.710 with that. But I can speculate which my lawyers are now shaking their heads no. But the 01:18:36.710 --> 01:18:46.119 precision that we should be able to gain over time based on more granular information, more 01:18:46.119 --> 01:18:53.560 artificial intelligence, so that we could move to a position like San Diego Gas and Electric. 01:18:53.560 --> 01:18:59.050 They have about a 10 year head start on us. We're copying everything they do as fast as 01:18:59.050 --> 01:19:06.980 we can, but you can do this surgically in small areas for small periods of time. That's 01:19:06.980 --> 01:19:11.270 what I think he was referring to. And there are a lot of tools we're working on that should 01:19:11.270 --> 01:19:13.894 help us be able to do that. 01:19:13.919 --> 01:19:20.600 Sort of bringing this back around to the plan of reorganization. 01:19:20.600 --> 01:19:30.130 You know, these executive level measures of safety and reliability. You know, I know part 01:19:30.130 --> 01:19:36.000 of what you're talking about is making sure that those are incentivized within the organization. 01:19:36.000 --> 01:19:43.039 Again, part of what myself and other parties have put forward is have that 01:19:43.039 --> 01:19:51.130 tied to a bottom line metric, like a return on safety, similar to what an ROI or ROE 01:19:51.130 --> 01:19:58.860 might look look like. And have you thought about having as a bottom line metric tied 01:19:58.860 --> 01:20:09.250 to your investments? Something like a return on safety to incorporate in the plan for structuring? 01:20:09.250 --> 01:20:12.727 I have thought about including metrics 01:20:12.739 --> 01:20:15.970 that are heavily weighted towards safety, but not 01:20:15.970 --> 01:20:22.909 entirely, because I think there are other things that matter. I think, customer 01:20:22.909 --> 01:20:29.311 service, customer welfare matters. I actually think financial health matters and that there 01:20:29.311 --> 01:20:37.719 ought to be some relatively small compared to safety piece, but my own experience, in my 01:20:37.719 --> 01:20:45.610 own view, the safest companies are frequently the most financially healthy, have the greatest 01:20:45.610 --> 01:20:52.449 customer satisfaction, and are the best run, so I think those things all go together. But 01:20:52.449 --> 01:20:57.714 as a single thing on safety, I believe there are other elements in a report. 01:20:57.739 --> 01:20:59.469 And I appreciate that 01:20:59.469 --> 01:21:00.679 And I think that's fair. 01:21:00.704 --> 01:21:03.400 Excuse me, Mr Abrams, at this time, I'd like to take 01:21:03.400 --> 01:21:11.730 a brief recess, so we'll be in recess until 2:35 by the wall clock. Thank you. Off the record. 01:33:05.039 --> 01:33:07.039 Thank you, Your Honor. 01:33:07.064 --> 01:33:09.064 Mr. Johnson, thanks for continuing with me. 01:33:13.139 --> 01:33:25.349 At the bottom of page 1-4 leading into 1-5, you describe, you know, the wildfires 01:33:25.349 --> 01:33:39.410 that PG&E is taking account of, and absent from that list, as you mentioned earlier from 01:33:39.410 --> 01:33:52.730 Mr. Long's questions, is the Kincaid fire. And part of what I certainly understand 01:33:52.730 --> 01:33:59.860 from your statement is that PG&E is not prepared, at this point, to take responsibility 01:33:59.860 --> 01:34:08.840 for that. And I guess part of what I'm trying to ask is specific to Kincaid but more broadly, 01:34:08.840 --> 01:34:20.050 which is doesn't it not make good corporate sense for company looking to rebuild trust 01:34:20.050 --> 01:34:30.210 to not wait necessarily for some outside source to come in with a gotcha jumper picture or 01:34:30.210 --> 01:34:38.980 a photo that makes it clear and convincing that PG&E started the fire. But would 01:34:38.980 --> 01:34:43.979 it not make sense for this or for other incidences, 01:34:43.991 --> 01:34:47.749 for PG&E to step forward and say, yes, 01:34:47.749 --> 01:34:55.159 we take responsibility, and whether that's in part caused by PG&E and other factors, 01:34:55.159 --> 01:35:02.539 but that we take responsibility for that fire or for other similar instances? How do you 01:35:02.539 --> 01:35:09.210 evaluate as a company and as an executive when to step forward and take responsibility 01:35:09.210 --> 01:35:12.180 before others point to it? 01:35:12.205 --> 01:35:18.920 So I suspect if this was a very clear situation, we would 01:35:18.920 --> 01:35:28.400 know by now who started that fire, and it is not clear, it's a complex situation. CalFire's 01:35:28.400 --> 01:35:34.909 investigating, and so a direct response to your question, I don't think any company 01:35:34.909 --> 01:35:41.389 should hurry out to admit to things they didn't do, particularly if it has consequences 01:35:41.389 --> 01:35:48.790 for customers, for communities, for shareholders. I'll tell you, I think we've been very transparent 01:35:48.790 --> 01:35:55.030 about this. As soon as you event happened, as soon as we knew that our tower was in the 01:35:55.030 --> 01:36:03.260 fire area, we have been public and very open about this and very open with the CalFire, 01:36:03.260 --> 01:36:09.500 but I just don't think the fact that we had had fires in the past that were related 01:36:09.500 --> 01:36:16.179 to our equipment would somehow make it smart for us to admit to things that we didn't 01:36:16.179 --> 01:36:20.699 do. I mean, one of the funny things I saw in the fire season that we were blamed for 01:36:20.699 --> 01:36:24.909 the Getty Fire in Los Angeles. So I don't think we should admit to these things that 01:36:24.909 --> 01:36:27.492 can't possibly be true. 01:36:27.517 --> 01:36:35.130 Understood. And, you know, part of that is sort of the difficulty 01:36:35.130 --> 01:36:47.280 with what may be prudent financially to take ownership for isn't necessarily the best thing 01:36:47.280 --> 01:36:57.172 from a trust building communication standpoint to take ownership for. And so how do you-- 01:36:57.197 --> 01:37:00.469 (inaudible from audience) 01:37:00.469 --> 01:37:04.566 Take, sorry, take ownership for? So 01:37:04.578 --> 01:37:08.849 how does that, help me understand the PG&E processes 01:37:08.849 --> 01:37:17.480 for looking at those types of things? Is it, you know, while there's 5% here, that is absolutely 01:37:17.480 --> 01:37:23.000 our responsiblity, and we're gonna get ahead of this and take ownership for that 5%. Or 01:37:23.000 --> 01:37:30.960 is it, look, it's only 5% now, and until it gets to 25, 30% that's when, you know, how do 01:37:30.960 --> 01:37:34.618 those discussions take place? 01:37:34.643 --> 01:37:42.690 So those discussions are, in fact, bound by SEC disclosure and 01:37:42.690 --> 01:37:50.590 GAP accounting rules. When you have a situation, and I'm not an accountant, that 01:37:50.590 --> 01:38:00.749 is likely versus probable versus possible, those all require different disclosures 01:38:00.749 --> 01:38:08.119 in both your SEC and in your accounting rolls. So what we do is we take the facts that we 01:38:08.119 --> 01:38:14.989 know. Kincaid, we know there was a fire in that area and we know that this tower with 01:38:14.989 --> 01:38:24.119 the jumpers was in the fire area. That's what we know. So is that likely that we caused 01:38:24.119 --> 01:38:31.099 it? Is it possible? And that's exactly how we evaluate him according to the SEC requirements 01:38:31.099 --> 01:38:33.734 on disclosure. 01:38:33.759 --> 01:38:41.639 Okay. And I think, you know, just part of that is a difficulty for the 01:38:41.639 --> 01:38:49.670 folks on the ground, right? And so part of what will help to ensure that PG&E 01:38:49.670 --> 01:38:54.246 has a bright future, and this plan of reorganization 01:38:54.258 --> 01:38:57.980 turns into healthy utility is gonna really 01:38:57.980 --> 01:39:06.190 depend on the public's perception of the path forward. And so, you know, I have friends 01:39:06.190 --> 01:39:16.940 who lost homes from the Kincaid fire. And people are rebuilding their homes where these 01:39:16.940 --> 01:39:27.260 fires are occurring. And part of what folks understand from a general perspective is corporate 01:39:27.260 --> 01:39:33.493 citizenship. Is things like that. What makes a good corporate citizen? 01:39:33.518 --> 01:39:35.057 Mr. Abrams? 01:39:35.082 --> 01:39:35.570 Yeah. 01:39:35.570 --> 01:39:41.159 If you could focus on a question. This is Mr Johnson's turn to testify rather than 01:39:41.159 --> 01:39:42.789 your turn to testify. 01:39:42.814 --> 01:39:44.067 Thank you. Sorry. 01:39:45.014 --> 01:39:47.679 I understand this. Is that an important 01:39:47.679 --> 01:39:48.656 issue for you, but-- 01:39:48.681 --> 01:39:48.982 it is. 01:39:49.007 --> 01:39:50.025 We need to try-- 01:39:50.050 --> 01:39:52.889 I will be more succinct. 01:39:52.889 --> 01:39:55.292 Thank you. 01:39:55.317 --> 01:40:02.500 So how do you convince a public that you are have a plan forward that's for 01:40:02.499 --> 01:40:10.820 good corporate citizenry as opposed to ensuring SEC filings and the financial interests of 01:40:10.820 --> 01:40:12.687 your investors. 01:40:12.712 --> 01:40:18.289 And the financial interests of our customers who should not be paying 01:40:18.289 --> 01:40:23.659 for fires that they're not responsible for. But how do you rebuild trust and confidence? 01:40:23.659 --> 01:40:29.480 I think there is a pretty straightforward answer to this. Flawless execution of your business 01:40:29.480 --> 01:40:34.963 over time. No more disasters, no more fatalities. 01:40:34.975 --> 01:40:40.690 No more catastrophes. That's step one. Two, deliver 01:40:40.690 --> 01:40:51.499 on your commitments every day. Reliability, affordability clean with a smile. You know, 01:40:51.499 --> 01:41:01.750 I don't think we can buy our way back into the good graces of anybody. Nor do I 01:41:01.750 --> 01:41:11.059 think, we're gonna build trust and confidence by agreeing to pay for things that we didn't 01:41:11.059 --> 01:41:16.409 do. Lord knows we have done enough things that we actually did and have to pay for. I don't 01:41:16.409 --> 01:41:22.760 think we need to be, you know, paying for things we don't. But I think it's a much simpler 01:41:22.760 --> 01:41:29.139 proposition. Avoid catastrophe. Go about your business in the right way. Serve your customers. 01:41:29.139 --> 01:41:40.999 Make 'em happy to take service from you. Take a while. Drive that stock price up for the trust. 01:41:40.999 --> 01:41:47.774 Okay, so in your testimony, in one of 01:41:47.786 --> 01:41:54.829 the sections, it was, the header is Backdrop to PG&E's 01:41:54.829 --> 01:42:02.090 Plan of Reorganization. And you seem to say it is part of your struggles 01:42:02.090 --> 01:42:10.610 with management is that PG&E is so big that it's very difficult to manage, and 01:42:10.610 --> 01:42:19.421 that you have, that it is unfair, in some ways, to compare PG&E to San Diego Gas 01:42:19.421 --> 01:42:29.579 and Electric with a smaller territory and maybe less breadth. Do you feel that you're, 01:42:29.579 --> 01:42:37.360 the size of your company is more of a help or hindrance in terms of how you're restructured 01:42:37.360 --> 01:42:40.040 in moving forward? 01:42:40.065 --> 01:42:48.080 So size is always both. As a person of size, I can tell you this personally, 01:42:48.080 --> 01:42:54.579 you know, the scale, size and scale, in terms of finance, in terms of bringing expertise 01:42:54.579 --> 01:43:04.449 from your workforce, in terms of restoration, size and scale is hugely important. 01:43:04.449 --> 01:43:12.389 It complicates, it can complicate operations, but that is a function of who you have doing 01:43:12.389 --> 01:43:18.199 the operations more than it is just size. You know, there are organizations within 20 01:43:18.199 --> 01:43:25.560 miles of here, maybe 30 much, much larger than PG&E and quite successful. So I don't 01:43:25.560 --> 01:43:30.660 mean to imply that there's any excuse about our performance based on size. 01:43:30.685 --> 01:43:32.360 Thank you. 01:43:32.360 --> 01:43:43.210 I appreciate that. And I think that's good to hear. So how are you leveraging those 01:43:43.210 --> 01:43:48.741 economies of scale in how you operate your business? 01:43:48.766 --> 01:43:52.289 So a number of ways. You get to do 01:43:52.289 --> 01:43:58.321 it in the supply chain and purchasing and procurement where you are at scale. Certainly 01:43:58.321 --> 01:44:04.349 in restoration work where you could move people around. Diversity of thinking with that number 01:44:04.349 --> 01:44:08.989 of employees turns out to be a very valuable thing. So I think there's a lot of ways that 01:44:08.989 --> 01:44:11.522 scale helps us. 01:44:11.547 --> 01:44:19.120 So part of my reason for asking those questions is I think when incidences 01:44:19.119 --> 01:44:25.719 have come up and things that you point to in your plan of reorganization that will 01:44:25.719 --> 01:44:36.719 change. Part of what that is are pointing to external factors as to why disasters occur, 01:44:36.719 --> 01:44:43.960 and how risk is measured associated with those external factors and the internal factors, 01:44:43.960 --> 01:44:52.469 and would like to get a sense of how those come together in a plan of reorganization. 01:44:52.469 --> 01:44:57.710 So part of what this is how do you put forward these are risks externally and these are the 01:44:57.710 --> 01:45:03.780 risks internally to the company so that we understand that the risks moving forward as 01:45:03.780 --> 01:45:06.822 a public? 01:45:06.847 --> 01:45:15.949 So we have a, what I would say, robust risk identification and management system 01:45:15.949 --> 01:45:22.869 that will improve as we go along here, but fairly robust, and tomorrow or whenever 01:45:22.869 --> 01:45:29.130 Mr Veseyi is up, he has this in his testimony, but what we do is we identify internal and 01:45:29.130 --> 01:45:36.949 external risks. We do what's called a bow tie analysis, which is a risk consequence 01:45:36.949 --> 01:45:45.150 mitigation in a three part fashion and probably the biggest external risk at the moment is 01:45:45.150 --> 01:45:51.340 climate change and what it's doing to the wildfire risk. But, you know, we address these 01:45:51.340 --> 01:45:54.153 things in our enterprise and operational risk 01:45:54.165 --> 01:45:57.420 management program, prioritize 'em, measure 'em, and 01:45:57.420 --> 01:46:02.387 have plans to mitigate those that we can. 01:46:02.412 --> 01:46:07.590 I understand and I think so, again managing 01:46:07.590 --> 01:46:13.960 expectation. So I think many of victims to these fires will listen to climate change, 01:46:13.960 --> 01:46:18.610 and will hear that and will say, "Well, they've been neglecting their infrastructure for so 01:46:18.610 --> 01:46:23.780 "long that of course, climate change caught up to them. But it's their neglect of their 01:46:23.780 --> 01:46:27.730 "infrastructure that really is the main focus. And every time an incident happens that they 01:46:27.730 --> 01:46:33.690 "point to this external climate change, it's not taking responsibility for the neglected 01:46:33.690 --> 01:46:40.589 "infrastructure." Is there a way to get over that trust gap? 01:46:40.614 --> 01:46:43.530 So I think it's both. Both 01:46:43.530 --> 01:46:50.960 equipment and climate. Again, I haven't studied this because it's too hard to study 01:46:50.960 --> 01:47:01.949 and I came here to look forward and not backwards, but an observation for me is that the risk 01:47:01.949 --> 01:47:08.469 of the equipment lagged the risk of the fire. I'm not saying this well. That if we look 01:47:08.469 --> 01:47:12.530 back five or six years and the same equipment in the same condition does the same thing, 01:47:12.530 --> 01:47:18.940 it's a much different risk than it is in 2019. So I think a lot of the condition of the equipment 01:47:18.940 --> 01:47:25.349 that was okay a decade ago isn't okay anymore. If you go back less than a decade, the 01:47:25.349 --> 01:47:31.559 theory was you're not gonna have a wildfire in Northern California. But obviously there 01:47:31.559 --> 01:47:37.760 are some problems with the equipment. Camp Fire, failed hook. I mean, so it's both and 01:47:37.760 --> 01:47:44.719 I think we have to address both. I don't think we should be allowed, well, we shouldn't say 01:47:44.719 --> 01:47:48.860 this, and we shouldn't be allowed to say that that this is just climate change. It's not 01:47:48.860 --> 01:47:54.150 just external. We have a piece of this, right? And under inverse, it doesn't matter what 01:47:54.150 --> 01:47:59.780 the condition of the equipment was. It either was affected part of the fire or not, but 01:47:59.780 --> 01:48:06.364 it's definitely both of those things that are causing the risk. 01:48:06.389 --> 01:48:08.559 Thank you. So how do 01:48:08.559 --> 01:48:16.860 the, what new financial mechanisms are within this plan of reorganization to address that, 01:48:16.860 --> 01:48:25.309 those infrastructure deficiencies? So what I mean by that is, you know, having greater 01:48:25.309 --> 01:48:36.130 return, perhaps for investors on risk mitigation, innovation, shortening the timeline associated 01:48:36.130 --> 01:48:45.670 with the deployment of new technology, of testing. How do you manage those, 01:48:45.670 --> 01:48:52.940 that financial picture when your investors are looking for month over month, short term 01:48:52.940 --> 01:48:55.218 yield? 01:48:55.243 --> 01:49:02.051 In our business, in the utility business, the regulated utility business, 01:49:02.050 --> 01:49:09.070 we don't just get to go invest in what we want to go invest in. I mean, these things 01:49:09.070 --> 01:49:16.480 require Commission approval, and the plan that we have put out said we have a five year 01:49:16.480 --> 01:49:23.019 projection of, I forget, 40 billion of investment that we have to raise through equity and otherwise 01:49:23.019 --> 01:49:30.450 that is generally devoted toward what you have said. Infrastructure improvement, wildfire 01:49:30.450 --> 01:49:37.820 risk reduction and mitigation. We're doing a number of other things that are innovative, 01:49:37.820 --> 01:49:41.524 but they're not innovative in the financial sense. 01:49:41.549 --> 01:49:44.139 Have you considered that, so part of 01:49:44.139 --> 01:49:51.100 this is, you know, these big buckets of money, we're not quite sure, as investors, shareholders, 01:49:51.100 --> 01:49:56.889 or as the public that those big buckets of money are going to go to necessarily the things 01:49:56.889 --> 01:50:04.659 that we care about which are mitigating risks. So have you considered financial mechanisms 01:50:04.659 --> 01:50:12.510 to target risk, to target innovation? Have you considered those things as an executive 01:50:12.510 --> 01:50:14.855 team? 01:50:14.880 --> 01:50:18.047 We have certainly considered 01:50:18.059 --> 01:50:21.889 innovation to mitigate risk in terms of big data and 01:50:21.889 --> 01:50:30.979 AI and predictive versus forecast, those things. I don't think we have a mechanism to tie 01:50:30.979 --> 01:50:34.562 that to the finances. 01:50:34.587 --> 01:50:39.864 So that has not been looked at? 01:50:39.888 --> 01:50:41.243 No. 01:50:41.269 --> 01:50:45.310 Okay, so one of the things 01:50:45.310 --> 01:50:52.479 that you stated in your testimony was that you felt that the Safety Culture OII 01:50:52.479 --> 01:51:03.520 should be put in a moratorium, I think was the word that was used. How do you, how 01:51:03.520 --> 01:51:11.190 does that make sense to approve a plan of reorganization, and then, figure out if the 01:51:11.190 --> 01:51:16.889 culture is oriented to safety? Does it not make logical sense to first figure out is 01:51:16.889 --> 01:51:21.739 the culture safe and then exit bankruptcy? 01:51:21.764 --> 01:51:27.040 I think in our request to stay the proceeding, 01:51:27.040 --> 01:51:33.789 we're only staying the part related to, for lack of a better word, corporate form. You 01:51:33.789 --> 01:51:39.219 know, what is the best form or format for the company to operate in? I think the rest of it 01:51:39.219 --> 01:51:45.280 will continue, but as a practical matter, as I said earlier, we have to emerge as something, 01:51:45.280 --> 01:51:54.729 we have to do a very large equity and debt raise. We have to be something to do that. 01:51:54.729 --> 01:52:01.059 We hope to be a regional for some period of time. But our ask on that piece was really 01:52:01.059 --> 01:52:08.162 just on the structural piece of the safety culture OII. 01:52:08.187 --> 01:52:11.840 Thank you. Do you think that 01:52:11.840 --> 01:52:17.183 regulating culture is an achievable task? 01:52:17.208 --> 01:52:21.387 Would you repeat that question, please? 01:52:21.412 --> 01:52:22.780 So, 01:52:22.780 --> 01:52:30.900 regulating culture. So culture within a corporation can mean lots of different things. 01:52:30.900 --> 01:52:37.570 But essentially, it's how you think and how that transfers into action. So the culture 01:52:37.570 --> 01:52:43.389 within an organization, the Commission has been charged withregulating a safety 01:52:43.389 --> 01:52:50.380 culture. Is that something that a regulatory body can regulate? Can they regulate culture? 01:52:50.380 --> 01:52:54.156 Well, they can regulate whatever is 01:52:54.168 --> 01:52:58.030 within their purview, their jurisdiction. If you're 01:52:58.030 --> 01:53:03.951 asking me whether I think they can actually get to regulating culture, I think that is 01:53:03.951 --> 01:53:11.889 a very difficult thing. I think the regulatory role is to make sure we're doing the things 01:53:11.889 --> 01:53:18.750 we need to do to generate good safety culture. I think it's very difficult for anybody to 01:53:18.750 --> 01:53:24.600 do that at a distance. It is difficulty up close, impossible from a distance. 01:53:24.625 --> 01:53:26.550 So what tools 01:53:26.550 --> 01:53:36.179 do you think should be used? So, metrics that they should look at, monitoring tools, 01:53:36.179 --> 01:53:44.800 to get at that, given what you said, that safety culture is hard to regulate. 01:53:44.800 --> 01:53:49.759 What are the tools that would be leveraged for that? 01:53:49.784 --> 01:53:51.630 So, the way I think 01:53:51.630 --> 01:53:59.199 about this, safety is essentially an exercise in risk identification and mitigation, and 01:53:59.199 --> 01:54:05.550 so there for me, the answer to this is tied up into your risk management programs. 01:54:05.550 --> 01:54:12.249 Things like you EORM and RAMP and the Safety Modeling S-Map. I think the Commission has 01:54:12.249 --> 01:54:16.601 a number of these tools that we apply in conjunction 01:54:16.613 --> 01:54:19.989 with our own program. And I think that's 01:54:19.989 --> 01:54:27.940 really where the the action is. Do you understand your risks? Are you appropriately mitigating 01:54:27.940 --> 01:54:34.530 them? That's where I think you can really, I mean, if you look at the history 01:54:34.530 --> 01:54:41.030 of PG&E over the last decade, one of the things you could draw a conclusion was didn't 01:54:41.030 --> 01:54:51.460 appreciate the risks. Right? It seems like a fair assessment to me. So safety 01:54:51.460 --> 01:54:57.219 metrics, risk programs in conjunction with the regulators' view with this, I think 01:54:57.219 --> 01:55:00.186 that's really where you need to go. 01:55:00.211 --> 01:55:04.510 Okay, I appreciate that. In your testimony on 01:55:04.510 --> 01:55:13.150 page 1-5, lines 11 through 13, you state that boards have extensive expertise in utility 01:55:13.150 --> 01:55:22.510 operations, in regulation and safety and renewable energy finance and technology. Can you talk 01:55:22.510 --> 01:55:28.650 a little bit about what is their specific safety background that you're referencing 01:55:28.650 --> 01:55:30.140 there? 01:55:30.165 --> 01:55:32.440 Certainly. Four of the board members, 01:55:32.452 --> 01:55:34.610 and until recently, five of them, came out of the 01:55:34.610 --> 01:55:41.530 utility backgrounds where safety was essential part of their everyday business. And I've 01:55:41.530 --> 01:55:49.479 never actually seen a utility board with five utility folks on it before. So I thought the 01:55:49.479 --> 01:55:56.030 direct experience and safety in the utility space, gas, electric and nuclear was pretty 01:55:56.030 --> 01:55:58.082 broad. 01:55:58.107 --> 01:56:04.239 Are there skills that you feel are not as well represented on the board that 01:56:04.239 --> 01:56:08.014 you think should be there? 01:56:08.039 --> 01:56:16.289 There's a good question I'm not gonna answer. My answer 01:56:16.289 --> 01:56:22.340 is that Chair Nora Brownell will be available, and her testimony covers a number of these 01:56:22.340 --> 01:56:24.966 topics, and I think she'd be a better one to ask. 01:56:24.991 --> 01:56:27.120 Fair enough. Fair enough. 01:56:30.370 --> 01:56:34.894 I think they're doing a great job. 01:56:34.919 --> 01:56:39.870 Thank you. So I'm trying to inquire about transferable 01:56:39.870 --> 01:56:45.500 skills and to whatever extent you feel like that is really important to have on the board. 01:56:45.500 --> 01:56:56.850 So I've appreciated that there are a number of folks who have safety skills from the 01:56:56.850 --> 01:57:02.580 utility space or maybe more broadly, the energy space. But I think you know, part of this 01:57:02.580 --> 01:57:06.445 is their safety applications from other industries, 01:57:06.457 --> 01:57:10.110 whether they be tech or telecom or manufacturing 01:57:10.110 --> 01:57:18.610 or other skill sets that are perhaps removed from the day to day business of PG&E 01:57:18.610 --> 01:57:24.190 to be leveraged. And I'm wondering to what extent you feel like bringing those in for 01:57:24.190 --> 01:57:28.460 some, you know, reorganization might be possible. 01:57:28.485 --> 01:57:32.389 I would welcome the addition of safety skills 01:57:32.389 --> 01:57:39.340 from outside the industry whenever the board is refreshed. When I got here, we had 01:57:39.340 --> 01:57:45.599 a board member who was a high level executive at Alaska Airlines and was put on the board 01:57:45.599 --> 01:57:51.719 specifically because of the expertise of safety in the airline industry. He has since 01:57:51.719 --> 01:57:58.670 departed, but that kind of different view of the same issues, I think, would be helpful. 01:57:58.670 --> 01:58:05.570 Good to hear you say that. One of those things that comes from the aviation industry 01:58:05.570 --> 01:58:13.499 that is leveraged there to a very large extent. as, I'm sure you're aware, is measurement 01:58:13.499 --> 01:58:20.780 and management of risk. So everything that goes on an airplane is assessed based on its 01:58:20.780 --> 01:58:28.900 risk. Do you feel like that level of risk assessment up and down the infrastructure 01:58:28.900 --> 01:58:35.394 is important for PG&E to measure, assess and report out? 01:58:35.419 --> 01:58:37.559 I think some level 01:58:37.559 --> 01:58:45.900 of oversight assessment, whatever term we're using here, is appropriate. I think it differs 01:58:45.900 --> 01:58:53.269 depending on the asset category. The asset location. Not all assets are of the same risk 01:58:53.269 --> 01:59:00.289 where the same importance, so I don't think it's...like in an airplane. Everything is really 01:59:00.289 --> 01:59:06.619 important, I think is a little different in our space. They all have to have some analysis 01:59:06.619 --> 01:59:10.610 and oversight, but I would think it varies greatly depending on what they are and where 01:59:10.610 --> 01:59:13.908 they are. 01:59:13.933 --> 01:59:23.801 If the Kincaid fire is assessed and this jumper is shown to be the cause, are 01:59:23.800 --> 01:59:32.469 those types of findings that perhaps were not on your radar in terms of assessing risk? 01:59:32.469 --> 01:59:43.300 Do they not point to perhaps a greater analysis of risk in the company? And shouldn't a plan 01:59:43.300 --> 01:59:51.800 of reorganization be structured around a broader assessment of risk? Because these outliers, 01:59:51.800 --> 02:00:00.027 as maybe they would be described prior to events, end up being causes of fires? 02:00:00.052 --> 02:00:02.769 I think 02:00:02.769 --> 02:00:12.809 the POR, in all of its pieces, including the piece we're here on, is based on a broad 02:00:12.809 --> 02:00:18.760 risk assessment platform. I mean, we're not just getting a CRO, in Mr Vesey's testimony, there is 02:00:18.760 --> 02:00:25.530 a lot of information about the upgrade to our own risk management systems and how sophisticated 02:00:25.530 --> 02:00:35.429 they are. I will say on the Kincaid, you know, sometimes things just break. And here's 02:00:35.429 --> 02:00:39.739 why I say that. I don't know. As I said, we don't know who caused the fire, what started 02:00:39.739 --> 02:00:48.980 the fire. But that tower was inspected a number of times over the last 24 months by high level 02:00:48.980 --> 02:00:59.050 qualified electrical workers and found to be fit for duty, fit for purpose. So I'm not 02:00:59.050 --> 02:01:11.300 sure you can ever get to the point where you can identify every risk. There you go. 02:01:11.300 --> 02:01:14.258 So part of that, I think, is a difficult 02:01:14.270 --> 02:01:17.400 message to get across to the public, that sometimes things 02:01:17.400 --> 02:01:25.030 just break, especially when the company seems to have these things occurring on a very regular 02:01:25.030 --> 02:01:40.400 basis. Does that statement not carry with it sort of a lack of recognition 02:01:40.400 --> 02:01:46.239 in terms of how that might be perceived in terms of the actions moving forward? In other 02:01:46.239 --> 02:01:57.699 words, if things just break, then we move on. But if we assess them, measure them, mitigate 02:01:57.699 --> 02:02:04.123 them. Isn't that what the public and the Commission is looking for? 02:02:04.148 --> 02:02:06.579 And I think that's what I 02:02:06.579 --> 02:02:16.360 said we did at Kincaid. We inspected. We measured. We analyzed and found it to be suitable for 02:02:16.360 --> 02:02:25.170 purpose. And I think the short answer to a long question is we cannot eliminate the risk. 02:02:25.170 --> 02:02:29.179 We cannot eliminate the risk of fire. We cannot eliminate the risk of equipment failure. We 02:02:29.179 --> 02:02:35.370 can mitigate it. We could do everything we can to mitigate it. But you cannot eliminate it. 02:02:35.370 --> 02:02:39.683 At the bottom of Page 1-5 of your 02:02:39.695 --> 02:02:44.550 testimony, you state PG&E's dedicated to emerging from 02:02:44.550 --> 02:02:52.130 Chapter 11 as utility that safely and reliably delivers affordable and clean energy to your 02:02:52.130 --> 02:03:04.469 customers and communities. How many PG&E ignited fires, during a wildfire season, 02:03:04.469 --> 02:03:10.840 do you think would demonstrate that you did not emerge from Chapter 11 as utility that 02:03:10.840 --> 02:03:13.058 delivers safety? 02:03:13.083 --> 02:03:19.711 I don't think there's any way from me to conjure an answer to that question. 02:03:19.710 --> 02:03:27.440 What I'm trying to understand are success metrics. So if this plan of reorganization 02:03:27.440 --> 02:03:33.179 is successful, so going into wildfire season, it's no coincidence, right, that June 30th 02:03:33.179 --> 02:03:38.469 is a deadline for this plan, and it also happens to be the start of wildfire season. So if 02:03:38.469 --> 02:03:43.280 there's a large wildfire that happens, would you say that your plan of restructuring has 02:03:43.280 --> 02:03:48.769 failed and the company has failed completely? Or is it two fires? How do you assess 02:03:48.769 --> 02:03:51.152 success? 02:03:51.177 --> 02:03:58.300 I don't think we have enough facts in the equation. What caused these fires? 02:03:58.300 --> 02:04:03.420 Were they are distribution? Were they on transmission? Were they in areas where you 02:04:03.420 --> 02:04:08.820 would rather suppress the fire than prevent it and hence get out of PSPS regime in 02:04:08.820 --> 02:04:16.150 that area? I just, we will have fires next year, this year, whatever year we're in. 02:04:16.150 --> 02:04:21.080 The goal is no catastrophic, no fatal. That's the goal. 02:04:21.105 --> 02:04:24.249 And I'm trying to bring this back to 02:04:24.249 --> 02:04:31.510 the plan. I'm trying to understand how we assess and how we look at this plan, assuming 02:04:31.510 --> 02:04:38.260 that it's approved and understand it was, how do you assess the plan? What is your 02:04:38.260 --> 02:04:40.613 measure of this was a successful plan? 02:04:40.638 --> 02:04:43.710 So when Debbie Powell is here, in her testimony, 02:04:43.710 --> 02:04:47.940 she has a number of the metrics we will use to determine whether we're making the right 02:04:47.940 --> 02:04:54.140 progress on the plan. And then there will be a little more qualitative judgment by me. 02:04:54.140 --> 02:04:57.286 Did we have fires? Were they catastrophic? That's not 02:04:57.298 --> 02:05:00.340 gonna be qualitative, that's gonna be quantitative. 02:05:00.340 --> 02:05:05.360 Is there anything we should have done differently? Could we have done something 02:05:05.360 --> 02:05:10.962 differently? That's how I'm going to evaluate them. 02:05:10.987 --> 02:05:16.349 Do you think that those subjective determinations 02:05:16.349 --> 02:05:24.050 are enough now? Don't we have to have specific numbers to say, you know, it's no more than 02:05:24.050 --> 02:05:29.429 two fires with X number of acres, and those types of things to understand if the plan 02:05:29.429 --> 02:05:31.787 was successful? 02:05:31.812 --> 02:05:38.860 So I think there are some of those kind of measures in Mr Lowe's testimony. 02:05:38.860 --> 02:05:46.830 How many ignitions? And if my memory is correct, I think in the Commissioner's ruling, 02:05:46.830 --> 02:05:54.110 there are some references to things like 1000 houses and other specific metrics, so I think 02:05:54.110 --> 02:06:00.119 we do have those, and we don't have them yet. I'm confident we'll have 'em by the time we're 02:06:00.119 --> 02:06:02.986 through with this proceeding 02:06:03.011 --> 02:06:09.231 on page 1-6, lines five and six of your testimony, you state 02:06:09.231 --> 02:06:15.030 that in addition to PG&E carefully considering views expressed by the California's 02:06:15.030 --> 02:06:25.340 Governor regarding its prior plan, I would, so you reference his letter on December 02:06:25.340 --> 02:06:36.510 13th stating that you have taken his views into consideration. Is that a fair characterization 02:06:36.510 --> 02:06:42.935 of how you responded to the Governor's letter on December 13? 02:06:42.960 --> 02:06:44.962 Yes, that's fair. 02:06:44.988 --> 02:06:45.630 Are you 02:06:45.630 --> 02:06:51.249 aware that the Governor also stated when he sent that letter that he was concerned, quote, 02:06:51.249 --> 02:06:56.561 "that this was a sub optimal plan"? 02:06:56.586 --> 02:07:04.909 I remember the letter pretty well, actually, it's seared on 02:07:04.909 --> 02:07:10.829 my retinas. Whether that particular line is in there, but the idea was certainly 02:07:10.829 --> 02:07:13.127 in there. Yeah. 02:07:13.152 --> 02:07:20.020 So are you aware that, before this letter was written, that there was a clause 02:07:20.019 --> 02:07:32.329 in the TCCRSA that gave the Governor of the ability to disapprove it? To not approve 02:07:32.329 --> 02:07:42.510 the RSA, and that after he expressed his dissatisfaction with the plan, that his ability 02:07:42.510 --> 02:07:47.589 to disapprove of the RSA was removed. 02:07:47.614 --> 02:07:51.320 Yes, I do know that. 02:07:51.345 --> 02:07:54.179 Do you think that that is 02:07:54.179 --> 02:07:59.492 taking the Governors thoughts into consideration? 02:07:59.517 --> 02:08:04.380 Absolutely. I think that's why the Governor's 02:08:04.380 --> 02:08:10.539 office was okay with removing it. The Governor's office, the Governor's a party to the bankruptcy. 02:08:10.539 --> 02:08:19.929 He could have enforced this provision and chose to let it go through. And I think, in large 02:08:19.929 --> 02:08:26.050 part, because we were meeting with the Governor's office and working on the issues in his letter. 02:08:26.050 --> 02:08:29.230 So you think that instead of incorporating 02:08:29.242 --> 02:08:31.719 his recommendations and suggestions into the 02:08:31.719 --> 02:08:38.580 restructuring support agreement that he wanted to have in there, you think that it was taking 02:08:38.580 --> 02:08:47.559 his concerns by not changing it and just saying that he can't disapprove it, that is taking 02:08:47.559 --> 02:08:49.099 his concerns into effect? 02:08:49.124 --> 02:08:53.289 No, I think if you look at the testimony we filed in this proceeding 02:08:53.289 --> 02:08:59.840 and bounce it against the December 13th letter, you will find a great deal of fidelity between 02:08:59.840 --> 02:09:06.170 the issues he raised and the issues we have responded to. So I think we have paid significant 02:09:06.170 --> 02:09:09.813 attention to those issues. The same kinds of issues 02:09:09.825 --> 02:09:13.340 have now showed up in the Assigned Commissioner's 02:09:13.340 --> 02:09:19.269 ruling, which we will certainly pay great attention to, so I don't think there's 02:09:19.269 --> 02:09:22.749 anything nefarious at all here. I think we listen to his views, we worked on them, and we're 02:09:22.749 --> 02:09:29.809 still working on them. I think it's common public knowledge that we're doing this. And 02:09:29.809 --> 02:09:34.763 so absolutely, we've been working on his views. 02:09:34.788 --> 02:09:39.510 Do you think that the June 30th date for plan 02:09:39.510 --> 02:09:46.699 confirmation to be able to access the $21 billion Wildfire Fund, do you think that that 02:09:46.699 --> 02:09:57.000 is, in addition to motivating PG&E, as you stated in your testimony, to move expeditiously, 02:09:57.000 --> 02:10:04.619 do you also think that maybe puts pressure on victims to sign off on a plan and the CPUC 02:10:04.619 --> 02:10:08.631 to sign off on a plan quickly? 02:10:08.656 --> 02:10:16.119 I don't think I can answer that for either the victims 02:10:16.119 --> 02:10:21.650 or the CPUC. I mean, we are here. There is a schedule that has been published that 02:10:21.650 --> 02:10:29.170 gets us, assuming everything goes well, to June 30th. My own view of the June 30th date is 02:10:29.170 --> 02:10:31.755 a little different, and again, complete speculation. 02:10:31.767 --> 02:10:34.119 I think it was put in the law to make sure that 02:10:34.119 --> 02:10:41.099 the victims got paid and got paid promptly and certainly changed the negotiating leverage 02:10:41.099 --> 02:10:48.909 of the people who are gonna pay the claims. So that's what it looked like to me. 02:10:48.909 --> 02:10:55.547 But whether it's squeezing people, here we are in a proceeding. 02:10:55.572 --> 02:10:57.829 Yeah, and to that point 02:10:57.829 --> 02:11:09.400 of squeezing people on, Page 1-6, Line 15 of your testimony, you state it is PG&E's intent 02:11:09.400 --> 02:11:16.820 to fully and fairly compensate all eligible wildfire victims, and I want to understand 02:11:16.820 --> 02:11:23.674 a little bit more what you mean by fully. What do you mean by fully? 02:11:23.699 --> 02:11:25.959 That the claims 02:11:25.959 --> 02:11:30.670 are paid according to what the bankruptcy court and all the committees and everybody 02:11:30.670 --> 02:11:33.078 else agrees is full payment. 02:11:33.103 --> 02:11:38.239 So I guess what I'm trying to understand is for the victim 02:11:38.239 --> 02:11:42.860 who's trying to understand and assess this plan to understand if they're gonna be able 02:11:42.860 --> 02:11:48.830 to rebuild their home, is fully, if you're, the cost of your house is a $1,000,000, do 02:11:48.830 --> 02:11:55.960 you think that fully is $1,000,000 to pay for the rebuilding of their home? 02:11:55.960 --> 02:12:00.712 Not to be, well, I think fully means 02:12:00.724 --> 02:12:05.579 whatever the Bankruptcy Court process provides as an 02:12:05.579 --> 02:12:15.280 agreed upon plan that everybody agrees to. That's fully, by definition, in the court. 02:12:15.280 --> 02:12:18.128 I appreciate that. But you know, someone, 02:12:18.140 --> 02:12:20.599 as you can imagine, who's reading your testimony 02:12:20.599 --> 02:12:28.289 and wants to understand what PG&E stands by and to say that fully and fairly compensate 02:12:28.289 --> 02:12:33.840 victims. So you're saying that that's a legal term that you're, fully is a legal term that 02:12:33.840 --> 02:12:39.847 you're using and not a colloquial term of what fully might mean? 02:12:39.872 --> 02:12:41.849 I think it can only 02:12:41.849 --> 02:12:47.670 mean what the bankruptcy court concludes it means. 02:12:47.695 --> 02:12:52.349 So what you mean by it is your deferring 02:12:52.349 --> 02:12:56.999 to whatever comes out of bankruptcy? That's fully enough. So if a person whose home is 02:12:56.999 --> 02:13:02.989 worth a $1,000,000 they get paid a buck because that's what the bankruptcy court determines, 02:13:02.989 --> 02:13:04.868 you would still consider that fully-- 02:13:04.893 --> 02:13:06.659 Objection (inaudible from off mic). 02:13:06.684 --> 02:13:08.829 Sustained. Can you, I think you've gotten 02:13:08.829 --> 02:13:10.944 the answer you're going to get. You can move on to the 02:13:10.956 --> 02:13:12.929 next line of questioning, please. Actually, let's, 02:13:12.929 --> 02:13:17.340 Mr. Abrams, let's do a time check. Where you at in, kind of like, proportion of your cross? 02:13:17.340 --> 02:13:19.403 How far are we through here? 02:13:19.428 --> 02:13:22.625 I would say I'm about halfway through. 02:13:22.649 --> 02:13:23.749 Okay, go ahead 02:13:23.749 --> 02:13:29.334 and continue to be concise. Thank you. 02:13:29.359 --> 02:13:32.135 Thank you. 02:13:32.160 --> 02:13:35.800 Let me get a gets a little more 02:13:35.800 --> 02:13:43.340 around this question of fully and to see if the still holds true. If there's a child who 02:13:43.340 --> 02:13:52.929 was injured from a PG&E caused wildfire and they have a disability because of it, 02:13:52.929 --> 02:13:57.491 what would you say fully compensates that child for that injury sustained? 02:13:57.516 --> 02:13:59.012 Ojection. 02:13:59.037 --> 02:14:01.040 Sustained. Please ask 02:14:01.039 --> 02:14:02.652 another question. 02:14:02.677 --> 02:14:07.490 Yeah. You know, I think that this is very pertinent to not only how 02:14:07.489 --> 02:14:12.349 we look back, but also how we look forward. Because if there isn't accountability moving 02:14:12.349 --> 02:14:18.929 forward for the actions, and fully is anywhere from a dollar to whole, then I think we have 02:14:18.929 --> 02:14:21.234 some real problems moving forward. But I'll leave it there. 02:14:21.259 --> 02:14:22.540 Mr. Abrams, I think fundamentally 02:14:22.540 --> 02:14:27.030 that question was impossible for this witness to answer. And that is why I sustain the objection. 02:14:27.030 --> 02:14:34.630 So, this is the President and CEO of the corporation, and he has expertise in certain 02:14:34.630 --> 02:14:39.489 areas. If you wish to make arguments about what fully and fairly is, you can make those 02:14:39.489 --> 02:14:41.099 arguments in your brief. 02:14:41.124 --> 02:14:42.642 Understood. Thank you. 02:14:42.668 --> 02:14:50.790 On page 1-6 of your testimony, line 16 02:14:50.790 --> 02:14:58.599 and 17, you state PG&E has now entered into settlements as embodied in the corresponding 02:14:58.599 --> 02:15:07.199 restructuring support agreements. Given that statement, that these embody the settlements, 02:15:07.199 --> 02:15:15.269 I would like to ask you a few questions regarding those agreements and the objections that I 02:15:15.269 --> 02:15:22.190 filed regarding those RSAs. Have you been following the bankruptcy proceeding? 02:15:22.190 --> 02:15:28.404 In terms of the changes to the restructuring support agreements? 02:15:28.429 --> 02:15:30.699 I've been following the 02:15:30.699 --> 02:15:39.199 bankruptcy proceeding mostly in terms of what is decided, not what is argued. So I'm not 02:15:39.199 --> 02:15:45.867 reading the pleadings, I'm not, when something happens, I get a report on that. 02:15:45.892 --> 02:15:48.090 So given 02:15:48.090 --> 02:15:55.840 that you stated in your testimony that these restructuring support agreements are embodying 02:15:55.840 --> 02:16:08.650 the plan, do you feel like they need to incorporate a measurement of risk? 02:16:08.675 --> 02:16:12.920 I think the testimony 02:16:12.920 --> 02:16:18.433 says that the settlements are embodied in the RSAs. 02:16:18.458 --> 02:16:21.190 It says the settlement as 02:16:21.190 --> 02:16:27.559 embodied in the corresponding restructuring support agreements. I'm just pointing to line 02:16:27.559 --> 02:16:29.745 16 and 17 of 1-6. 02:16:29.770 --> 02:16:36.302 I'm confused. The question you asked me was about the plan of reorganization, 02:16:36.301 --> 02:16:38.995 not the RSA or the settlement. So? 02:16:39.020 --> 02:16:43.670 Right, So I'm pointing to the fact that in your testimony 02:16:43.670 --> 02:16:54.229 you indicate that the restructuring support agreements embodies the plan. So does it embody 02:16:54.229 --> 02:16:54.762 the plan? 02:16:54.787 --> 02:16:56.362 Objection on the states as testimony. 02:16:56.387 --> 02:17:02.760 Let's just get clarification. Do you understand 02:17:02.760 --> 02:17:04.588 the question, Ms Johnson? 02:17:04.613 --> 02:17:06.947 I think maybe I understand the question 02:17:06.959 --> 02:17:09.050 we're trying to get to. Shall I answer that one? 02:17:09.050 --> 02:17:10.658 Yes, go ahead. 02:17:11.220 --> 02:17:15.790 If the question is, should we have risk metrics in 02:17:15.790 --> 02:17:21.029 the RSA, the settlements, or those things, then the answer is no. I don't think we should. 02:17:21.029 --> 02:17:25.190 I think they belong in this proceeding. And they're in this proceeding in various pieces 02:17:25.190 --> 02:17:31.269 of testimony to be supplemented in conjunction with the assigned Commissioner ruling of, I think. 02:17:31.269 --> 02:17:33.629 last week. 02:17:33.654 --> 02:17:40.710 So in the restructuring, in the plan of reorganization, it does describe the 02:17:40.710 --> 02:17:50.290 risks associated with the noteholders and provides a substantial amount of real estate 02:17:50.290 --> 02:17:58.439 describing how those investments are secured and how those risks are taken care of. And 02:17:58.439 --> 02:18:04.660 I guess I'm pointing out that that's in contrast to no description of risk associated with 02:18:04.660 --> 02:18:11.821 what is brought up through the TCCRSA, and the risks exposed to victims. Why 02:18:11.821 --> 02:18:22.029 is it that risks in the plan are addressed regarding the noteholders, but not the victims? 02:18:22.029 --> 02:18:26.289 I don't know the answer to that question. 02:18:26.301 --> 02:18:29.899 I know that the risks, the company are, I would 02:18:29.899 --> 02:18:38.410 say encyclopedicly catalogued in our security documents, but I don't know, the question you've 02:18:38.410 --> 02:18:42.188 asked, I don't know the answer to. 02:18:42.213 --> 02:18:48.189 So as the CEO having responsibility to shareholders, 02:18:48.189 --> 02:18:58.250 I'm assuming that if this plan of reorganization goes through and this trust has 21% of the 02:18:58.250 --> 02:19:09.550 shares, that you will have a fiscal responsibility to that trust and the victims whose lives 02:19:09.550 --> 02:19:14.298 are somewhat depended on that trust moving forward. Is that a correct statement? 02:19:14.323 --> 02:19:15.881 You 02:19:15.880 --> 02:19:22.050 have asked a legal question that I don't know the answer to. Obviously, as the CEO of a 02:19:22.050 --> 02:19:28.610 publicly owned company with shareholders, I have a fiduciary obligation to shareholders, right? 02:19:28.610 --> 02:19:34.739 I don't know how that translates into the trust, and hence whoever is managing the trust, 02:19:34.739 --> 02:19:36.127 and paying the victims. 02:19:36.152 --> 02:19:37.696 (inaudible from off mic) 02:19:37.721 --> 02:19:41.679 And paying the victims, selling the stock and paying the victims. I'm 02:19:41.679 --> 02:19:45.121 sorry. I just don't know how that works. 02:19:45.146 --> 02:19:48.730 Okay, So just to clarify so you don't know 02:19:48.730 --> 02:19:58.521 if you will have a fiduciary responsibility to the trust that holds 21% of the shares. 02:19:58.521 --> 02:20:04.850 Yes. I don't know the answer that. I know I have a fiduciary obligation today 02:20:04.850 --> 02:20:09.739 to the shareholders, but how that translates into the question you've asked, I really 02:20:09.739 --> 02:20:14.229 don't know the answer to. But there is an answer to this question that I'm thinking 02:20:14.229 --> 02:20:19.923 we'll be finding here pretty quick after the hearing ends today. 02:20:19.948 --> 02:20:21.850 So help me understand 02:20:21.850 --> 02:20:26.254 that, in contrast, then what other large shareholders 02:20:26.266 --> 02:20:30.109 would receive to assess their financial risks. 02:20:30.109 --> 02:20:38.420 So if a large investor wanted to purchase a large block of PG&E stock, what 02:20:38.420 --> 02:20:40.817 typically would be provided by the company? 02:20:40.842 --> 02:20:43.160 Objection. This is beyond the scope of the 02:20:43.160 --> 02:20:44.530 testimony. 02:20:44.555 --> 02:20:45.693 It's in his testimony. 02:20:45.718 --> 02:20:47.910 What are you trying to get to with this, Mr Abrams? 02:20:47.934 --> 02:20:48.640 I'm 02:20:48.640 --> 02:20:55.075 trying to get to the stability and financial security of PG&E. 02:20:55.100 --> 02:20:57.220 I think you're 02:20:57.220 --> 02:21:02.410 kind of wandering a little farther afield from that. If you can focus down a little 02:21:02.410 --> 02:21:12.580 more that would be useful. I mean, I think a lot of what's, and some of this witness's prior 02:21:12.580 --> 02:21:18.840 answers, a lot of this is addressed by the securities laws, and this is not their securities 02:21:18.840 --> 02:21:23.779 attorney. So there is a lot of coverage of SEC rules and regulations, so if you could 02:21:23.779 --> 02:21:30.470 focus on the point you're trying to get to a little more directly, that'd be appreciated. 02:21:30.470 --> 02:21:35.901 So a prospectus. So do you feel that the 02:21:35.913 --> 02:21:40.870 public who is now taking on a much larger stake in 02:21:40.870 --> 02:21:49.410 PG&E and victims should be given a prospectus on their risks the same way a large shareholder 02:21:49.410 --> 02:21:52.163 might? 02:21:52.188 --> 02:22:00.421 So let me say a little bit about this. We tell all investors the same thing. 02:22:00.420 --> 02:22:05.710 There is no category of investor who gets special or additional knowledge. If you own 02:22:05.710 --> 02:22:12.069 one share or one million shares. This is a function of Rule FD, full disclosure, we 02:22:12.069 --> 02:22:20.520 cannot favor investors. So if I was going to make an investment of one share or two 02:22:20.520 --> 02:22:28.029 shares, I would go look at our recent most recent SEC filings, and I'd look at the 02:22:28.029 --> 02:22:33.989 risk statements and I'd look at the financials. But that's how we do it with everybody. We 02:22:33.989 --> 02:22:38.930 don't have special information. We don't, we might go on a road show and talk 02:22:38.930 --> 02:22:46.319 to big investors. All public information. So whatever we know and believe is on the 02:22:46.319 --> 02:22:49.952 website in our financial documents. 02:22:49.977 --> 02:22:55.350 Would it surprise you to know that victims who are 02:22:55.350 --> 02:23:03.970 now being receiving text messages to sign off on a plan that hasn't been baked yet, 02:23:03.970 --> 02:23:07.388 that they have not been provided with the prospectus. 02:23:07.413 --> 02:23:09.350 I have no idea what the answer to 02:23:09.350 --> 02:23:12.715 that is. 02:23:12.740 --> 02:23:18.288 Are you aware of what the concessions 02:23:18.300 --> 02:23:22.811 were to the noteholders previously? The ad 02:23:22.811 --> 02:23:32.540 hoc committee of unsecured noteholders. What concessions were made to them to allow them 02:23:32.540 --> 02:23:35.455 to drop their competing plan? 02:23:35.480 --> 02:23:36.521 Objection. 02:23:36.546 --> 02:23:37.666 Sustained. 02:23:47.485 --> 02:23:49.485 Would it be surprising for you to know that 02:23:49.510 --> 02:24:00.649 the concessions that the noteholders received for them dropping their plan were asset liens 02:24:00.649 --> 02:24:04.475 to ensure that their stake in PG&E was more protected? 02:24:04.500 --> 02:24:05.750 Objection. 02:24:05.775 --> 02:24:07.791 Sustained. 02:24:15.920 --> 02:24:21.063 Let me ask a question regarding the short 02:24:21.075 --> 02:24:26.050 term risks associated with PG&E. Should the Commission 02:24:26.050 --> 02:24:40.050 and the public be concerned that the investors who are mitigating their risks, including 02:24:40.050 --> 02:24:51.440 fund managers, bondholders, noteholders and others are positioning themselves for exits 02:24:51.440 --> 02:24:54.435 if things don't go well? 02:24:54.460 --> 02:25:02.920 I don't know they're doing that. I don't know that people 02:25:02.920 --> 02:25:06.363 are positioning for exits. 02:25:06.388 --> 02:25:13.780 So are there more? Let me ask this question. Are there 02:25:13.780 --> 02:25:18.617 more asset liens than there were prior to the plan of reorganization? 02:25:18.642 --> 02:25:20.229 I do not know 02:25:20.229 --> 02:25:22.459 the answer to that. 02:25:22.484 --> 02:25:25.067 You do not know? 02:25:25.092 --> 02:25:26.106 No I don't. 02:25:26.131 --> 02:25:29.149 Mr Abrams, are you asking about now 02:25:29.149 --> 02:25:33.825 or after the plan of reorganization is in place? 02:25:33.850 --> 02:25:37.260 I'm asking about the impacts of the 02:25:37.260 --> 02:25:40.712 plan of reorganization on PG&E's financial future. 02:25:40.737 --> 02:25:43.149 I understand that. The question you asked, 02:25:43.149 --> 02:25:47.260 I wasn't sure of the time you asked. Are there more asset liens now than before? 02:25:47.285 --> 02:25:48.630 Incorperated 02:25:48.630 --> 02:25:59.510 into the plan of restructuring so that, upon exit, there will be investors who have financial 02:25:59.510 --> 02:26:02.002 exit routes that weren't there before? 02:26:02.027 --> 02:26:05.100 With that clarification. Mr. Johnson, do you 02:26:05.100 --> 02:26:07.250 know the answer to the question? 02:26:07.275 --> 02:26:10.810 I do not. Our CFO, Jason Wells, will be here. And 02:26:10.810 --> 02:26:16.585 if anybody knows the answer that I assume he will, but I do not. 02:26:16.610 --> 02:26:18.510 Towards the bottom 02:26:18.510 --> 02:26:26.960 of page 1-7 of your testimony, you state upon the plans effective date, all power 02:26:26.960 --> 02:26:30.418 purchase agreements, renewable energy power purchase 02:26:30.430 --> 02:26:33.310 agreements and community choice aggregation 02:26:33.310 --> 02:26:39.859 servicing agreements of the debtor shall be deemed assumed. Assuming these agreements 02:26:39.859 --> 02:26:46.609 will continue PG&E's commitment to providing energy from renewable sources and further 02:26:46.609 --> 02:26:52.250 evidence of achieving the state's climate goals in accordance with the choices of local 02:26:52.250 --> 02:26:59.979 communities. I was hoping you could help me understand this. How would these agreements 02:26:59.979 --> 02:27:10.206 be affected with, say, another wildfire this season? 02:27:10.231 --> 02:27:16.960 Depends on the fire. The cause 02:27:16.960 --> 02:27:23.170 of it, when it happens, have we emerged from bankruptcy? Are we still in bankruptcy? It's 02:27:23.170 --> 02:27:27.140 hard to say without more facts. 02:27:27.165 --> 02:27:34.569 So would you say that, is it a fair assessment that thes 02:27:34.569 --> 02:27:45.260 agreements are contingent upon what occurs this wildfire season in terms of the amount 02:27:45.260 --> 02:27:50.386 of fires and the destruction of fires? 02:27:50.411 --> 02:27:57.939 I don't think I'm saying that. Actually, I don't think 02:27:57.939 --> 02:27:59.635 I understand the question. 02:27:59.660 --> 02:28:03.550 Okay, I'm just trying to understand myself because part of 02:28:03.550 --> 02:28:09.729 this is a getting underneath what the commitment is here. So what I'm trying to understand 02:28:09.729 --> 02:28:17.279 is that you indicate this path, right? And so part of the Commission's job is to ensure 02:28:17.279 --> 02:28:26.580 that you're on a path to the California's climate objectives. And so what I'm trying 02:28:26.580 --> 02:28:32.810 to understand is are you still on that path if there's another wildfire, or do those agreements 02:28:32.810 --> 02:28:34.433 go south? 02:28:34.458 --> 02:28:39.301 So what we're trying to say here is that in bankruptcy, sometimes you have 02:28:39.300 --> 02:28:45.710 the opportunity to shed contracts, to revise them, whatever, and we have not done that here, 02:28:45.710 --> 02:28:55.600 particularly on the CCA servicing agreements and the renewable PPAs because we support the 02:28:55.600 --> 02:29:00.279 California energy policy. I think we've been amongst the greatest supporters and the greater 02:29:00.279 --> 02:29:06.979 supporter of this issue across the country. 1054 says that our plan has to demonstrate 02:29:06.979 --> 02:29:12.140 that we can continue to be supportive of these climate goals. So this is simply a statement 02:29:12.140 --> 02:29:18.190 saying we had the opportunity or the option in this bankruptcy to do something with these, 02:29:18.190 --> 02:29:23.430 and we chose to leave them alone and proceed ahead. Now what happens if we have another 02:29:23.430 --> 02:29:30.260 fire? Again, are we back in bankruptcy? If we're not, then these contracts are affirmed 02:29:30.260 --> 02:29:36.555 and assumed and nothing should happen to them. 02:29:36.580 --> 02:29:41.510 So I'd like to lift up the lens a 02:29:41.510 --> 02:29:57.029 bit here regarding the plan of reorganization and try to understand its direction. So help 02:29:57.029 --> 02:30:06.120 me understand sort of what is inspiring about PG&E and about how you plan to move forward. 02:30:06.120 --> 02:30:12.370 So part of what I understand in terms of working with an organization and adressing new challenges 02:30:12.370 --> 02:30:21.130 and taking on new innovative approaches is that there needs to be a sense of of innovation 02:30:21.130 --> 02:30:26.960 and a sense of a corporate culture that's going to reward that type of behavior. Can you talk 02:30:26.960 --> 02:30:31.776 about that in terms of how you inspire? 02:30:31.801 --> 02:30:37.580 So we might have a little semantic difference 02:30:37.580 --> 02:30:43.770 here because I don't believe I can inspire anybody. But I believe that perhaps I can 02:30:43.770 --> 02:30:52.811 create the conditions where people will inspire themselves. And instead of vision or innovation 02:30:52.811 --> 02:30:58.810 I think the most important thing in an organization for people is purpose. I actually 02:30:58.810 --> 02:31:06.760 think the three key things in driving performance, you can't drive performance, but purpose, mastery 02:31:06.760 --> 02:31:16.359 and autonomy. If you want to go places, those are three things to worko on. And for us, purpose. 02:31:16.359 --> 02:31:22.460 I mean, where we're going to focus its purpose. Why do we exist? We exist for one reason. 02:31:22.460 --> 02:31:32.330 To serve customers. The privilege of serving the public. That is, so, in many senses, the 02:31:32.330 --> 02:31:39.521 transformation here is going to return us closer to our roots of being a public utility 02:31:39.521 --> 02:31:47.859 that is proud to be in service of public. And if you think about it, that's not a bad purpose. 02:31:47.859 --> 02:31:52.439 I'd get up in the morning for that. In fact, I do. 02:31:52.464 --> 02:31:56.300 Absolutely. And part of an evaluation 02:31:56.300 --> 02:32:04.189 of this plan of reorganization, I think is comparative to how other companies have 02:32:04.189 --> 02:32:14.920 turned around at points in their history, where they've managed to chart a new course. 02:32:14.920 --> 02:32:20.620 Can you talk a little bit about examples that you look to for organizations that have been 02:32:20.620 --> 02:32:25.439 in trouble and that have turned around? And what qualities do you feel are represented 02:32:25.439 --> 02:32:32.208 in your plan of reorganization that are seen in those examples? 02:32:32.233 --> 02:32:35.170 So I've read about a number 02:32:35.170 --> 02:32:42.739 of these examples, but perhaps more pertinently, I've done this twice before, turned around 02:32:42.739 --> 02:32:51.270 companies that were lagging into pretty good performers. And the simpler you make it, the 02:32:51.270 --> 02:32:57.470 better. The fewer moving parts you have in the strategy, the better, and I'll go back 02:32:57.470 --> 02:33:01.649 to you got to start with a purpose. Then you have to align people around the purpose. 02:33:01.649 --> 02:33:06.460 And the alignment is probably the hardest piece of this because you have history and 02:33:06.460 --> 02:33:11.100 culture and people who have done it a different way 100 years. But once you have alignment, 02:33:11.100 --> 02:33:16.210 you can now get engagement, you can get people behind this idea and then you go to work. 02:33:16.210 --> 02:33:20.240 You set targets. You set financial targets, headcount targets. Whatever the targets 02:33:20.240 --> 02:33:30.380 are you need to meet. But, in many ways, this is like the most old fashioned of management 02:33:30.380 --> 02:33:38.670 things. I mean, this is just like managing your business, which is not that exciting. 02:33:38.670 --> 02:33:44.900 And what companies would you point to? I mean, you know, what corporation 02:33:44.900 --> 02:33:49.380 would you point to that exited bankruptcy in a way that you feel like this plan is oriented 02:33:49.380 --> 02:33:51.353 towards> 02:33:51.378 --> 02:33:57.271 So I didn't study people coming out of bankruptcy. I'm sorry. Maybe 02:33:57.270 --> 02:34:03.570 I should. Maybe I'll do that later. But that's a good point, actually. 02:34:03.595 --> 02:34:05.670 Yeah, just, 02:34:05.670 --> 02:34:10.979 you know, in preparation for this, I was struck by some of those examples. I'm going to turn, 02:34:10.979 --> 02:34:19.090 just, I guess, to the last part of my testimony here, I guess to specific concerns 02:34:19.090 --> 02:34:33.660 for the public, which is reflected in this document. So part of what you mentioned here 02:34:33.660 --> 02:34:43.979 is that fairness is first and foremost in your mind for victims. And I think that 02:34:43.979 --> 02:34:52.000 I've been going through the letters that have been sent into the bankruptcy court with concerns 02:34:52.000 --> 02:34:58.140 about the plan. Have you been aware of these letters with the public concerns about this 02:34:58.140 --> 02:35:00.375 plan and what it means for their future? 02:35:00.400 --> 02:35:03.210 I have heard about the letters. I have not received 02:35:03.210 --> 02:35:05.328 them nor read them. 02:35:05.353 --> 02:35:11.681 Do you know how many roughly how many letters have been sent into 02:35:11.680 --> 02:35:14.046 the courts with concern? 02:35:14.071 --> 02:35:15.032 I do not. 02:35:15.057 --> 02:35:23.830 So are you aware of how many letters have been sent 02:35:23.830 --> 02:35:27.386 to the court in support of the plan? 02:35:27.411 --> 02:35:29.675 Similarly, No. 02:35:29.700 --> 02:35:32.720 So would it surprise you to know that 02:35:32.720 --> 02:35:37.750 there's been hundreds of letters from victims sent into the court and I'm not aware one 02:35:37.750 --> 02:35:40.838 of them that was in favor of the plan? 02:35:40.863 --> 02:35:42.951 Objection. No foundation. 02:35:42.976 --> 02:35:50.479 (inaudible from off mic) 02:35:50.479 --> 02:35:55.472 He doesn't know anything about the letters. There's no foundation for the question. 02:35:55.497 --> 02:36:06.374 (inaudible from off mic) 02:36:06.399 --> 02:36:09.284 And he doesn't know. 02:36:09.309 --> 02:36:17.940 So how does an executive get a sense of the impact on customers and 02:36:17.940 --> 02:36:26.300 victims who are potentially going to be victimized again by the plan? How do you get a sense 02:36:26.300 --> 02:36:31.770 of what they're feeling about this plan? Whether it's fair, if you don't look at the letters, 02:36:31.770 --> 02:36:36.833 don't have any sense of the number of letters and haven't looked at them? 02:36:36.858 --> 02:36:38.521 Mr. Abrams, please 02:36:38.520 --> 02:36:42.470 moderate your tone. Focus on a narrow question, please. 02:36:42.495 --> 02:36:44.939 How do you get a sense of the victims' 02:36:44.939 --> 02:36:46.202 interests? 02:36:46.227 --> 02:36:49.990 If I was asking you questions, I would ask you do you know how many letters 02:36:49.989 --> 02:36:56.020 I get? I get a lot of letters, not about the plan, but about what this company has done. 02:36:56.020 --> 02:37:03.609 What has happened. I get a lot of them. So I think I have a general sense of anger, the whatever. 02:37:03.609 --> 02:37:13.270 Now, as I said earlier, I'm not in charge of that plan. This is a process in the bankruptcy 02:37:13.270 --> 02:37:19.790 court. This is how it works. And I do not have the power to change it. And obviously 02:37:19.790 --> 02:37:28.100 a lot of people support the plan because there's a restructuring agreement around it, and it's 02:37:28.100 --> 02:37:33.640 been approved by the bankruptcy court. So somebody approves it. Some level of participants 02:37:33.640 --> 02:37:35.710 must be happy with it. 02:37:35.735 --> 02:37:41.920 So how do you ensure that your customers are happy with the plan? 02:37:41.920 --> 02:37:44.807 I don't think I could make them all happy with the plan. 02:37:44.832 --> 02:37:45.930 But what is your, 02:37:45.930 --> 02:37:53.470 let me restate the question. What are the communication vehicles that you use to get 02:37:53.470 --> 02:38:01.350 them comfortable with the plan and the fact that they may be holding 50% of their future 02:38:01.350 --> 02:38:03.213 in PG&E stock? 02:38:03.238 --> 02:38:08.801 So I believe my role in this is to get them comfortable with what 02:38:08.801 --> 02:38:15.050 is in this testimony book here. I don't think it is my role or the company's role to get 02:38:15.050 --> 02:38:20.510 comfortable with the procedures of the United States Bankruptcy Court. Similarly, I don't 02:38:20.510 --> 02:38:25.029 think it was our job to make people comfortable with the United States District Court. There 02:38:25.029 --> 02:38:31.340 are processes. This is a system of laws. This is how it works. You may not like it. None 02:38:31.340 --> 02:38:35.791 of us might like it. How it works. 02:38:35.816 --> 02:38:42.859 So in one of the letters sent to the court, Lisa 02:38:42.859 --> 02:38:44.674 Williams states-- 02:38:44.699 --> 02:38:48.046 Objection, Your Honor. There's no foundation to question this witness. 02:38:48.071 --> 02:38:50.120 I'm going to let him finish the question, he 02:38:50.120 --> 02:38:54.086 has also provided at the exhibit, I believe 02:38:54.098 --> 02:38:58.800 Abrams-X-$, letters to the court. Are you referring 02:38:58.800 --> 02:39:01.611 to a letter that's part of a Abrams-X-4? 02:39:01.636 --> 02:39:02.470 Yes, I am. 02:39:02.494 --> 02:39:04.970 Okay, go ahead with your question. 02:39:04.970 --> 02:39:07.558 In a letter from Lisa Williams, it 02:39:07.570 --> 02:39:10.430 states I have included pictures representing what life 02:39:10.430 --> 02:39:17.290 is currently like in Paradise. These pictures include men and women standing in a long line 02:39:17.290 --> 02:39:24.979 on a cold January day for free food at a church, men and women standing in a long line on a 02:39:24.979 --> 02:39:33.689 cold day in January. How do you respond to these victims who are looking to you to 02:39:33.689 --> 02:39:39.860 understand your fairness, understand the company's fairness, and understand that they're going 02:39:39.860 --> 02:39:44.569 to be rebuilding their lives? Whether that's purchasing a home or rebuilding home, that 02:39:44.569 --> 02:39:46.988 addresses those concerns. 02:39:47.013 --> 02:39:53.180 And my answer to this is we have in addition to all the things 02:39:53.180 --> 02:40:01.560 that we will do, there's $25.5 billion going to pay these claims, and they are administered 02:40:01.560 --> 02:40:08.550 by the people who represent these victims. I do not represent these victims, but somebody 02:40:08.550 --> 02:40:14.811 does. I don't know if it's an individual lawyer or the Tort Claims Committee. I don't know. 02:40:14.811 --> 02:40:20.850 But as I said, somebody represents these people. And there's enough of a agreement about this 02:40:20.850 --> 02:40:24.117 that the bankruptcy court approved it. 02:40:24.142 --> 02:40:25.296 02:40:25.322 --> 02:40:26.900 So related to-- 02:40:26.925 --> 02:40:27.811 Wait a minute. 02:40:27.836 --> 02:40:28.760 Sorry. Go 02:40:28.760 --> 02:40:29.258 ahead. 02:40:29.283 --> 02:40:30.752 So there's always 02:40:30.777 --> 02:40:36.729 gonna be objections, right? So what are we, are we gonna have, we're gonna say the 02:40:36.729 --> 02:40:41.521 bankruptcy court, you ordered this, but we're not doing it. I tried that once. I was in 02:40:41.521 --> 02:40:50.449 jail for two days, held for contempt. I'm not doing it again. Just you know, I can't. 02:40:50.449 --> 02:40:56.104 I can't defy a bankruptcy court or federal district judge. I just cannot do it. 02:40:56.129 --> 02:40:57.989 The reason 02:40:57.989 --> 02:41:06.540 why I'm asking is that this goes to the corporate culture, which the CPUC has purview to regulate. 02:41:06.540 --> 02:41:14.580 And so if the public feels that the corporate culture looks at fairness as whatever the 02:41:14.580 --> 02:41:23.960 SEC determines is fair and whatever is full treatment for victims is whatever the 02:41:23.960 --> 02:41:29.319 bankruptcy court determines, where does that leave corporate responsibility? Where does 02:41:29.319 --> 02:41:36.320 that leave a culture for safety? If you are stating that as a corporation, sorry, this 02:41:36.320 --> 02:41:40.678 has nothing to do with us? 02:41:40.703 --> 02:41:46.311 I am proud of a corporate culture 02:41:46.336 --> 02:41:51.069 there says We abide by the 02:41:51.069 --> 02:41:57.939 law, which is what I'm saying to you here, we abide by the line. If you want to deviate 02:41:57.939 --> 02:42:05.779 from that practices a social norm, we're gonna be in serious trouble in this country. 02:42:05.779 --> 02:42:09.604 So would you say then, that the PG&E 02:42:09.616 --> 02:42:13.380 culture is governed by whatever is legal but above 02:42:13.380 --> 02:42:18.939 and beyond that, in terms of ethical treatment of customers, ethical treatment of victims 02:42:18.939 --> 02:42:21.902 above and beyond that is not the corporate culture of PG&E? 02:42:21.927 --> 02:42:22.939 I'm not saying that. 02:42:22.939 --> 02:42:27.680 I'm saying as a baseline, we'll obey the law. We've had some compliance issues. So for 02:42:27.680 --> 02:42:33.930 us to say we stand by the law is a good thing. But I do not agree with your assessment of 02:42:33.930 --> 02:42:36.432 what is ethical, what is moral or those things. 02:42:36.457 --> 02:42:38.830 I haven't assessed that. I'm just asking what 02:42:38.830 --> 02:42:40.750 you see as ethical. 02:42:40.775 --> 02:42:46.510 Hold on. Stop. Okay, We're going nowhere with this right 02:42:46.510 --> 02:42:51.109 now. I think you can make this in an argument. I think you've gotten a number of different 02:42:51.109 --> 02:42:54.818 answers from Mr Johnson. And we are not relitigating 02:42:54.830 --> 02:42:57.779 what the bankruptcy court has done. There 02:42:57.779 --> 02:43:01.479 is what the Commission has with this. I know you're trying to relate this to PG&E's 02:43:01.479 --> 02:43:05.840 safety culture. I think you've gotten the answer you're going to get. Do you have other 02:43:05.840 --> 02:43:08.098 questions to ask? 02:43:08.123 --> 02:43:09.810 I do, Your Honor. 02:43:09.834 --> 02:43:13.139 Go ahead with those, please. 02:43:13.164 --> 02:43:14.870 There's a letter that 02:43:14.870 --> 02:43:25.340 was sent into the court by a Tina Wrestler that states that adults and people with disabilities 02:43:25.340 --> 02:43:32.267 have been adversely impacted and disproportionately 02:43:32.279 --> 02:43:37.350 impacted by the fires caused by PG&E. 02:43:37.350 --> 02:43:46.069 How do you ensure, other than what is dictated to you by legal terms, how you do outreach 02:43:46.069 --> 02:43:49.103 to people with disabilities? 02:43:49.128 --> 02:43:55.930 So, and we learned a lot about this in last year's PSPS 02:43:55.930 --> 02:44:02.890 events. We actually make a tremendous effort to reach out to people with disabilities, medical, 02:44:02.890 --> 02:44:08.260 baseline people, access needs, all of these people. We have a multi-step program where 02:44:08.260 --> 02:44:11.746 we try to reach out. If we can get them electronically, 02:44:11.758 --> 02:44:14.819 we actually go to their house. We have partnered 02:44:14.819 --> 02:44:20.520 with the local communities, the counties, the county emergency operations folks to make 02:44:20.520 --> 02:44:24.970 sure that we know who these people are and where they are and we can get notice to them. 02:44:24.970 --> 02:44:33.300 We are making contributions and other things into not for profit, non-profit organizations 02:44:33.300 --> 02:44:36.099 that apply, that give out batteries for wheelchairs 02:44:36.111 --> 02:44:38.489 and other medical devices. So I think we're 02:44:38.489 --> 02:44:41.490 doing a lot of work in this area 02:44:41.515 --> 02:44:46.460 And part of the reason why I'm bringing 02:44:46.460 --> 02:44:51.729 These letters onto the record, and I think there are so important to bring in is that 02:44:51.729 --> 02:44:59.370 largely, in these hearings and in these discussions, the victims are not represented. And, 02:44:59.370 --> 02:45:06.971 there has not been outreach to the public to get their sense of the plan. And I 02:45:06.971 --> 02:45:12.399 think it's important as the California Public Utilities Commission that this information 02:45:12.399 --> 02:45:20.489 is read into the record and that questions are asked from victims. James Cox sent a letter 02:45:20.489 --> 02:45:26.529 into the court stating that he was concerned that there was not coordination with the Red 02:45:26.529 --> 02:45:28.642 Cross with wildfires. 02:45:28.667 --> 02:45:34.980 So, Mr Abrams, my understanding is these are all letters to the bankruptcy 02:45:34.979 --> 02:45:39.790 court for the bankruptcy court to consider in their process. Is that correct? 02:45:39.790 --> 02:45:42.621 No, they're not, Your honor. These air 02:45:42.633 --> 02:45:45.370 letters from victims with concern about the plan of 02:45:45.370 --> 02:45:52.189 reorganization, which is what this proceeding is focused on, and whether it will provide 02:45:52.189 --> 02:45:56.521 a safe future for them as they move forward. And I just want to make sure that the victim's 02:45:56.521 --> 02:45:58.666 voices are hear. 02:45:58.691 --> 02:46:02.140 What I'm seeing in your, um, Abrams-X-4, 02:46:02.152 --> 02:46:05.100 Exhibit C, is I see a letter to the honorable 02:46:05.100 --> 02:46:13.630 Judge Montali. Good morning, Honorable Judge Montali. This one is to whom it may concern. 02:46:13.630 --> 02:46:17.650 Many of these seem to be addressing the bankruptcy. Honorable Dennis Montali, 02:46:17.650 --> 02:46:21.708 honorable Judge Montali. I do not want to re litigate the bankruptcy proceeding. 02:46:21.733 --> 02:46:23.061 And I'm not looking 02:46:23.060 --> 02:46:28.109 to do that here. The plan of reorganization is the bankruptcy proceeding. All of the RSAs 02:46:28.109 --> 02:46:32.310 that are mentioned are in the bankruptcy proceeding. All of the relevant documents 02:46:32.310 --> 02:46:35.716 in the plan is at the bankruptcy proceedings. So it 02:46:35.728 --> 02:46:38.949 would only make sense, if I'm a victim concerned 02:46:38.949 --> 02:46:43.090 about the impacts of this that I would send the letter there. It doesn't mean that because 02:46:43.090 --> 02:46:47.640 those documents, amongst all the other ones that we're looking at, are sent into the bankruptcy 02:46:47.640 --> 02:46:51.640 proceeding. I still think they're relevant here, just like all the other documents from 02:46:51.640 --> 02:46:56.530 the investors and all of the other folks that have stakeholder stake in this decision. The 02:46:56.530 --> 02:46:57.725 victims do, too. 02:46:57.750 --> 02:47:00.420 So, Mr Abrams, you have marked an exhibit that has the letters. 02:47:00.445 --> 02:47:00.676 Yes, 02:47:00.701 --> 02:47:01.310 It appears 02:47:01.310 --> 02:47:06.830 that you are trying to lay a foundation for that. If you've laid an adequate foundation 02:47:06.830 --> 02:47:11.689 that these are letters, that they're relevant, you can move this into the record, and then 02:47:11.689 --> 02:47:17.069 you can site to this in your argument. I think that might be more effective than reading 02:47:17.069 --> 02:47:23.989 every letter out loud or reading a number of letters out loud to Mr Johnson. So, in 02:47:23.989 --> 02:47:29.890 terms of the interest of time, you can seek to move this in, rather than reading a series 02:47:29.890 --> 02:47:33.733 of letters addressed to the bankruptcy court. 02:47:33.758 --> 02:47:37.409 So what I'm trying to do is what I'm trying 02:47:37.409 --> 02:47:48.470 to do is ensure that the questions that victims have regarding the plan are asked and answered 02:47:48.470 --> 02:47:55.050 by the PG&E executives because I think that the public is looking to understand 02:47:55.050 --> 02:47:58.829 the answers to these questions, and I think it's, again-- 02:47:58.854 --> 02:48:00.979 Then what you need to do is ask 02:48:00.979 --> 02:48:05.420 the narrow question. If there's a narrow question that someone asks, that you wish to 02:48:05.420 --> 02:48:12.960 ask Mr Johnson, that's fine. This is not your time to testify. You have filed testimony. 02:48:12.960 --> 02:48:19.010 You are allowed to ask Mr Johnson questions, so please focus the questions. If you want 02:48:19.010 --> 02:48:22.989 to paraphrase one of the letters, go ahead and do that. But this is time for questions 02:48:22.989 --> 02:48:25.237 for Mr Johnson. 02:48:25.262 --> 02:48:31.980 Thank you, I will try to keep them very specific. Carrie Lockhart, 02:48:31.979 --> 02:48:39.270 in her letter to the court, stated, I left a job I loved doing mediations for Butte 02:48:39.270 --> 02:48:49.199 County Superior Court because we had nowhere to live. How is PG&E making sure that 02:48:49.199 --> 02:48:55.720 if she's living around PG&E lines that she is rebuilding or purchasing a home that 02:48:55.720 --> 02:49:00.678 she can has have a level of safety moving into this wildfire season? 02:49:00.703 --> 02:49:02.331 Well, we have an 02:49:02.330 --> 02:49:08.140 extensive rebuilding programme in Paradise, so if she wants to live in Paradise, we will 02:49:08.140 --> 02:49:15.460 provide service there in a very good fashion. We have a number of enhancements to our wildfire 02:49:15.460 --> 02:49:19.454 mitigation plan that are in Debbie Powell's testimony 02:49:19.466 --> 02:49:23.250 that we filed the plan last week, the week before, 02:49:23.250 --> 02:49:29.939 and so I think we have a number of enhancements that will make it safer and be a good place 02:49:29.939 --> 02:49:32.352 to start. 02:49:32.377 --> 02:49:39.590 Michelle Barker, in her letter to the court, pointed to the issue associated 02:49:39.590 --> 02:49:50.420 with homeowners insurance. As I'm sure you're aware, getting affordable homeowners insurance 02:49:50.420 --> 02:49:57.630 or just getting insurance at all, given the PG&E fires is becoming more and more difficult. 02:49:57.630 --> 02:50:03.080 So as the Commission looks to assess the impacts on customers in the public associated with 02:50:03.080 --> 02:50:09.720 this plan, what have you done to look to ensure what you are doing makes sure that 02:50:09.720 --> 02:50:15.544 we have insurance for homeowners in the state? 02:50:15.569 --> 02:50:21.120 Well, we are paying $25.5 billion 02:50:21.120 --> 02:50:32.689 to resolve all claims, and some of those proceeds, I think, would be used to purchase insurance. 02:50:32.689 --> 02:50:35.290 So part of what the insurance companies 02:50:35.302 --> 02:50:37.630 look at is they have a very measured approach of 02:50:37.630 --> 02:50:43.230 how they assess risk. They're looking to insure, to measure, to understand if they 02:50:43.230 --> 02:50:50.990 can insure home or not. How are you working with them to ensure that they, when they 02:50:50.990 --> 02:50:55.636 measure risk, they take into account your mitigation efforts? 02:50:55.661 --> 02:50:57.359 Objection, Your honor. 02:50:57.359 --> 02:51:02.500 Availability of property insurance is not within the scope of this proceeding. 02:51:02.500 --> 02:51:05.591 I'll let the witness answer. If he knows. 02:51:05.616 --> 02:51:07.915 I really don't know the answer to that question. 02:51:07.940 --> 02:51:08.681 Would 02:51:08.681 --> 02:51:16.430 you say that part of what needs to be in a plan of reorganization to ensure that PG&E's 02:51:16.430 --> 02:51:23.560 financial future is tied to the customers and ratepayers is to make sure that that relationship 02:51:23.560 --> 02:51:26.499 is built upon and that you are working collaboratively 02:51:26.511 --> 02:51:28.979 with them as a company to ensure that we have 02:51:28.979 --> 02:51:30.098 insurance in the state? 02:51:30.123 --> 02:51:33.210 No, I would not say that. I don't think that's our role at all 02:51:33.210 --> 02:51:38.505 to be in the insurance business. We're partnered with people in the insurance business. 02:51:38.530 --> 02:51:40.270 Are 02:51:40.270 --> 02:51:45.760 there other community partners that you have? That talk to the broader culture? 02:51:45.785 --> 02:51:47.590 We have a number 02:51:47.590 --> 02:51:55.500 of community partners who, mostly NGOs, not for profits that we do many programs with, yes. 02:51:55.500 --> 02:52:01.939 Mr Abrams. I'm gonna want to use the last five minutes in case we have any 02:52:01.939 --> 02:52:17.609 administrative item. So if you could do your last question, please. 02:52:17.634 --> 02:52:23.370 Let me just ask. I guess 02:52:23.370 --> 02:52:33.550 one last question related to these efforts. What can you do as an executive to ensure 02:52:33.550 --> 02:52:40.350 that these issues that victims are bringing up that dramatically affect their lives are 02:52:40.350 --> 02:52:48.428 at the forefront of how PG&E moves forward with the plan of reorganization? 02:52:48.453 --> 02:52:51.121 So I hate 02:52:51.120 --> 02:52:57.400 to inject myself personally into this story, but I'm going to. So I've been to Paradise 02:52:57.400 --> 02:53:02.569 five times. And one of those trips, at the request of Judge House, we took a bus 02:53:02.569 --> 02:53:13.149 tour and we listen to 911 tapes and watched video and looked at remains. So if you think 02:53:13.149 --> 02:53:23.590 I am unaffected by this, by the victims, in this treatment, you're wrong. This has 02:53:23.590 --> 02:53:32.000 affected me deeply. And so my point is, I'm gonna do everything I can to make this right. 02:53:32.000 --> 02:53:37.370 There are some constraints. I don't control the courts of the United States, but I'm gonna 02:53:37.370 --> 02:53:42.628 do everything I can to make this right. That's my answer to your question. 02:53:42.653 --> 02:53:44.381 I appreciate that. 02:53:44.380 --> 02:53:51.239 I hope that that compassion that you just showed is translated into the actions of PG&E. 02:53:51.239 --> 02:53:53.234 Thank you. 02:53:53.259 --> 02:53:59.220 Thank you, Mr Abrams. Thank you, Mr Johnson. Let's go off the record 02:53:59.220 --> 02:54:01.227 for a second and touch based on witness timing and scheduling. 02:54:01.252 --> 02:56:43.051 (OFF THE RECORD) 02:56:43.076 --> 02:56:46.670 On the record. Tomorrow morning, we'll 02:56:46.670 --> 02:56:53.979 start with Mr Johnson again. For now, we will be continue to start a 10 AM. The first cross 02:56:53.979 --> 02:56:59.790 for Mr Johnson will be from the Center for Accessible Technology. We will try to get 02:56:59.790 --> 02:57:07.699 through Mr Johnson first, and after Mr Johnson will be Mr Plaster. And we'll figure out 02:57:07.699 --> 02:57:13.071 who's next after that. But it would be another PG&E witness. Are there any other 02:57:13.071 --> 02:57:19.880 matters that we need to address today? Do we have any resolution on any of the issues 02:57:19.880 --> 02:57:27.988 we discussed this morning? Confidentiality issues? 02:57:28.013 --> 02:57:33.870 I need a overnight to research this 02:57:33.870 --> 02:57:37.376 question. I'm hopeful we'll resolve it in the morning. 02:57:37.401 --> 02:57:40.690 Okay. And then also the nature of the clarification 02:57:40.690 --> 02:57:42.057 document. 02:57:42.082 --> 02:57:46.159 Let's discuss that in the morning as well. And then I'll consider 02:57:46.159 --> 02:57:53.880 the ACR scheduling issues and, actually, if parties, if parties have some sort of consensus, 02:57:53.880 --> 02:57:56.467 we can address that or have more discussion on that. 02:57:56.492 --> 02:57:57.590 I was going to suggest 02:57:57.590 --> 02:58:01.059 we might get together tomorrow morning. (audio cuts out) 02:58:01.084 --> 02:58:04.649 That would probably be a good idea. Because if the parties 02:58:04.649 --> 02:58:09.790 can come to something that's close, that's workable for me. The main thing I'm interested 02:58:09.790 --> 02:58:17.500 in is I don't want anything coming into me after that March 26. So, and I have limited 02:58:17.500 --> 02:58:25.220 availability to move hearing dates, so I will have to check hearing room availability. So 02:58:25.220 --> 02:58:31.649 if you want hearing dates on other than March 18-20, I will have to confirm whether they're 02:58:31.649 --> 02:58:37.253 available or not. But I will do so once. I know dates. Ma'am in back. 02:58:37.278 --> 02:58:42.113 Melissa Kaznitz, Center for Accessible Technology. 02:58:42.125 --> 02:58:46.699 I have a procedural question which I can ask on the record or off. 02:58:46.699 --> 02:58:49.399 We're on the record. Go ahead. 02:58:49.399 --> 02:58:52.258 I'd like to request that someone, presumably 02:58:52.270 --> 02:58:54.876 PG&E, send emials to the service list on what is happening 02:58:54.888 --> 02:58:57.488 with witness order, so those of us who aren't available to 02:58:57.500 --> 02:58:59.979 spend each day in the hearing room can be advised as to 02:58:59.979 --> 02:59:04.642 just who's coming next and have the best understanding 02:59:04.654 --> 02:59:08.394 available of what to expect for scheduling. 02:59:08.419 --> 02:59:09.954 We'll be happy to do that. 02:59:09.979 --> 02:59:11.199 Okay. Thank you. Mr. Weisman. 02:59:11.199 --> 02:59:13.176 Mr. Finkelstein? 02:59:13.201 --> 02:59:15.647 (inaudible, no mic) 02:59:21.609 --> 02:59:24.827 (inaudible, no mic) 02:59:24.852 --> 02:59:34.480 I might revise it slightly, but yeah, I was kind of hoping the parties were going to do 02:59:34.480 --> 02:59:40.710 one. Didn't happen this time. So, Miss Herbert did that for me. So it is, in fact, very 02:59:40.710 --> 02:59:45.760 useful. Yeah, we will. I'll send around. We'll send around a revised version of that with 02:59:45.760 --> 02:59:49.786 it has the cross estimates on it. Mr. Fox? 02:59:49.811 --> 02:59:54.000 Your Honor, the question that you asked 02:59:54.000 --> 03:00:00.570 Mr Weisman earlier about confidentiality is that with respect to the 03:00:00.570 --> 03:00:03.982 confidential version of the (mumbles). 03:00:04.007 --> 03:00:09.370 (mumbles) And I was just commenting that over the tonight, 03:00:09.370 --> 03:00:14.050 we're gonna figure out the, whether there's a need to maintain confidentiality of the 03:00:14.050 --> 03:00:18.790 portion of the joint CCA testimony as well as the A4NR testimony. I still report back 03:00:18.790 --> 03:00:20.320 on that in the morning. 03:00:20.345 --> 03:00:21.996 Thank you, Mr Weisman. Miss Kelly? 03:00:22.021 --> 03:00:24.909 Yes. Thank you, Your Honor. I had one last question on 03:00:24.909 --> 03:00:30.720 hearing transcripts, and when they might end up being available, given the expedited timeline 03:00:30.720 --> 03:00:32.358 of this proceeding. 03:00:32.383 --> 03:00:37.271 That's a good question. I would defer that to our reporters. I don't 03:00:37.270 --> 03:00:42.850 know that I have a precise answer for you. Maybe we can get you an answer in the 03:00:42.850 --> 03:00:43.389 morning. 03:00:43.414 --> 03:00:44.609 Thank you very much. 03:00:44.634 --> 03:00:45.007 Okay. 03:00:45.033 --> 03:00:51.481 Anything else we need to address today? Ookay. Thank 03:00:51.480 --> 03:01:28.739 you very much. We are adjourned until 10 AM tomorrow.