WEBVTT

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<v Announcer>The feed for this streaming event</v>

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brought to you by adminmonitor.com

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will begin momentarily.

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Thank you for your patience.

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<v ->At this time we will call to the stand Ms. Brownell.</v>

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Please stand and raise your right hand.

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Do you solemnly swear or affirm the testimony

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you are about to give, to be the truth,

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the whole truth and nothing but the truth?

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<v Ms. Brownell>I do.</v>

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<v ->Thank you.</v>

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Please be seated and state your name and place of business

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for the record.

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<v ->My name is Nora Mead Brownell.</v>

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My place of business currently is at PG&amp;E in California.

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<v Judge>Thank you.</v>

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Mr. Weissman.

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<v ->Good afternoon, Ms. Brownell.</v>

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What is your position at PG&amp;E?

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<v Ms. Brownell>I'm the chairman of the board</v>

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of the corporation.

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<v ->That would be PG&amp;E corporation?</v>

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<v Ms. Brownell>That's correct.</v>

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<v ->Do you have before you what's been marked</v>

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for identification as PG&amp;E One?

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<v Ms. Brownell>I do.</v>

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<v ->The volume of of prepared testimony?</v>

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<v Ms. Brownell>I do.</v>

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<v ->And within that volume are you sponsoring chapter four?</v>

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<v Ms. Brownell>I am.</v>

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<v ->Do you have before you what's been marked</v>

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for identification as PG&amp;E or,

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just a volume of exhibits for your testimony?

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<v ->Yes, oops.</v>
<v Mr. Weissman>Excuse me.</v>

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Within PG&amp;E, you have before you,

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what's been marked for identification as PG&amp;E four?

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<v ->Yes.</v>

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<v Mr. Weissman>Okay.</v>

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Within PG&amp;E four, are you sponsoring

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exhibit one to your testimony?

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<v ->Yes.</v>

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<v Mr. Weissman>Do you have before you,</v>

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it's been marked for identification as PG&amp;E five?

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<v ->Yes.</v>

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<v Mr. Weissman>And within that volume, that comprises</v>

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exhibits two through seven of your testimony,

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which you're sponsoring, correct?

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<v ->Yes.</v>

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<v Mr. Weissman>and you have before you,</v>

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what's being marked as PG&amp;E six?

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<v ->Yes.</v>

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<v ->And within that volume,</v>

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that contains exhibits eight through 23 to your testimony,

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which you're also sponsoring, correct?

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<v Ms. Brownell>Yes.</v>

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<v ->You have before you, what's been marked for identification</v>

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as PG&amp;E seven, which contains supplemental testimony,

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including a rota?

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<v Ms. Brownell>Yes.</v>

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<v ->And within volume, does that include the, a rota to,</v>

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or testimony in chapter four?

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<v ->It does.</v>

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<v ->So I've just identified the</v>

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portions of the exhibits that you are sponsoring.

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Was that, was that material prepared by you,

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or at your direction?

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<v ->It was.</v>

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<v ->And do you adopt that as your testimony?</v>

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<v ->I do.</v>

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<v ->Is it true and correct</v>

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to the best of your knowledge and belief?

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<v ->It is.</v>

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<v ->Your honor, the witness is available</v>

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for cross-examination.

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<v Judge>Thank you Mr. Weissman.</v>

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Let's be off the record briefly.

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Does anybody have any cross-examination

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exhibits for Ms. Brownell?

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Okay, great.

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Let's be back on the record.

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At this time we'll have cross-examination by

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Ms. Sheriff for CLECA.

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<v Ms. Sheriff>Thank you your honor.</v>

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Good afternoon Ms. Brownell.

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<v ->Good afternoon.</v>

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<v ->My name is Nora Sheriff,</v>

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I represent the California Large Energy

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Consumers Association, or CLECA.

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They are large industrial customers

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of PG&amp;E and Southern California Edison company.

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At page four-eight of your testimony,

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in what's been marked for identification,

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exhibit PG&amp;E one, you discuss director independence.

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Am I correct in understanding that you mean

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the general idea, is that the board

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shouldn't be too close to management?

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<v ->I think it's a board, owes its responsibility</v>

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to the corporation, shouldn't be too close to management,

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shouldn't be too close to anyone with

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vested interests in the company.

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I think it's pretty well defined

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in the New York Stock Exchange rules.

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<v ->Okay.</v>

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And on that same page, you also talk about

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the committee of board members being able to quote,

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"Require reports from management" end quote.

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Do you agree that management shouldn't be the

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only source of information for the board?

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<v ->Absolutely.</v>

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<v ->Okay, so having a separate source of technical information</v>

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and evaluation would improve the independence of the board?

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<v ->It would improve the independence and it would expand the</v>

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information that you use in decision-making,

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and in fact we do have reports from technical experts,

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including the experts by, hired by the CPUC, North Star.

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<v ->Okay.</v>

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Other than North Star, did those technical exports,

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experts report to the board,

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or do they report to management of the company?

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<v ->They report to management, but the board has</v>

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unfettered access.
<v ->Okay, thank you.</v>

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At page four-32, you reference public safety

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power shut off events,

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and the utilities worker safety.

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Are you aware of the potential for calamitous impact

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to worker safety, should a complex industrial site

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suddenly and with no notice lose power?

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<v ->Yes I am.</v>

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<v ->Are you aware of the potentially hazardous environmental</v>

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impacts that could occur in such a situation?

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<v ->Yes I am.</v>

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<v ->Are you aware that some industrial customers</v>

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in PG&amp;E's service territory lost power

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due to the October 2019,

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public safety power shut off events,

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and had no notice multiple times?

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<v ->I've read that, I'm not aware of it personally</v>

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and didn't see it at the time, but it is certainly possible.

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<v ->And are you aware that those industrial customers</v>

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who lost power multiple times,

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with absolutely no notice from PG&amp;E,

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did not see an improvement in PG&amp;E's execution

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of the fall 2019, PSPS events?

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<v ->I'm aware that we've had a number of complaints</v>

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about our notification and communication,

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and we're working very hard to improve that.

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<v ->And as you said earlier,</v>

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you're aware of the potential danger

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to worker safety and environment for this?

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<v ->I am.</v>

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<v ->What do you think can be done to make sure</v>

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that those events of fall 2019,

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and the risks they pose to worker safety at industrial sites

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and the environment, do not happen again in 2020.

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<v ->I think we're taking a number of steps,</v>

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and recently reviewed the wildfire safety plan,

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that has been submitted,

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in addition to the other activities.

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First and foremost, our notification system

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has to be better, has to be more accurate,

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and we've taken considerable steps to do that.

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Secondly, the work on hardening our systems

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vegetation management and all the other sectionalization.

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Geo-tagging our lines will give us better information

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and allow us to manage those with smaller scope

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and hopefully shorter duration.

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Sorry.
<v Ms. Sheriff>Excuse me,</v>

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I only have 5 minutes.
<v ->Go ahead.</v>

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<v Ms. Sheriff>And I just have one final question.</v>

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<v ->Sure.</v>
<v Ms. Sheriff>And you can</v>

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expand on redirect with your council.

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Do you think there should be a targeted focus effort

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for large power industrial customers,

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because of these additional risks that they see?

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<v Attorney>Question acquitted.</v>

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<v ->In terms of making sure that the</v>

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2020 public safety power shut off events

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do not pose the same risks to large power customers,

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with complex industrial sites, where there's concern

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over worker safety, and hazards impact to the environment,

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should a sudden loss of power occur with no notice.

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Do you think, Ms. Brownell, that there should be

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a focused effort at those large power customers?

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<v ->I absolutely believe there should be a focused effort</v>

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at those customers, and all at-risk customers,

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and there is particular focus on doing

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a far better job than that.

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So I certainly understand.

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<v Ms. Sheriff>Okay, thank you.</v>

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I have no further questions.

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<v Judge>All right, thank you.</v>

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Given that Ms. Sheriff needs to leave,

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I'm gonna to take the unusual step of saying,

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is there any redirect related to her questions?

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<v ->No your honor.</v>

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<v Judge>All right, thank you.</v>

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<v ->Thank you very much your honor.</v>

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I appreciate that.

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<v Judge>All right, thank you.</v>

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And also for the record, Commissioner Rechtschaffen

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has rejoined me on the dais

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during that earlier line of questioning.

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Next is Ms. Kelly MCE.

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<v Ms. Kelly>Thank you very much.</v>

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Good afternoon, welcome.

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I have a few short questions,

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would you please turn to page four-four

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of your testimony?

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<v ->I'm there.</v>

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<v ->Thank you.</v>

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So in the first bullet

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a board fulfills it's role in a variety of ways,

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including, and what does your first bullet there say?

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<v ->"Setting an appropriate tone from the top"</v>

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"to actively cultivate a corporate culture"

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"that gives priority to integrity, ethical standards,"

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"full compliance with legal requirements,"

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"professionalism, fair dealing, socially responsible"

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"pursuit of a company's business objectives".

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<v ->So does the board of PG&amp;E corporation</v>

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currently, set an appropriate tone from the top

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to actively cultivate a corporate culture

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through this whole first bullet?

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<v ->I absolutely believe that it does,</v>

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and it includes getting to know the employees

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at the local level, doubling the number of field visits,

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actually more than doubling, to 80,

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to get a really intense deep dive into

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all of the business practices of the company,

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and a number of other activities.

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So we've tried to be visible, engaged, and knowledgeable.

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<v ->Great, and does PG&amp;E generally have a corporate culture</v>

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that gives priority to integrity,

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ethical standards, full compliance with legal requirements,

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professionalism, fair dealing,

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and socially responsible pursuit of the

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company's business objectives?

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<v ->I believe we have 23,000 employees</v>

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who work very hard to live up to those obligations

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and to set a culture of integrity,

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and all of the things we list below.

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<v ->So in, on a yes or no basis, does the corporate</v>

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culture have those attributes at this time?

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<v ->Yes.</v>

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<v ->So I reviewed many of your,</v>

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the exhibits to your testimony,

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and you don't need to turn to any of them in particular,

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but I did notice that none of them specifically addressed

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governance related to investor owned utilities,

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or entities in the public good,

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so why, why is that?

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<v ->I believe the same rules apply,</v>

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whether your a utility, or a chemical company,

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although I think with the utility,

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or when I worked at a bank, when you have

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a regulated monopoly, you have a special obligation,

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and I think that's a social responsibility,

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as well as a responsible, in a utility,

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to deliver safe, reliable, affordable service.

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<v Ms. Kelly>And so is that social responsibility</v>

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of fiduciary duty?

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<v ->I think a successful company,</v>

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with a board that fulfills

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it's fiduciary responsibility,

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is committed to all those things, safety for example,

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is a platform--

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<v Ms. Kelly>Thank you.</v>
<v ->for fulfilling your</v>

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fiduciary responsibility.

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<v Ms. Kelly>Thank you, that's efficient.</v>

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And if you turn to page four-19 of your testimony.

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<v ->I'm there.</v>

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<v ->Great, at the second bullet, this relates to</v>

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the target of PG&amp;E to have at least 50%

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California resident directors at chapter 11 emergence.

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<v ->That's correct.</v>

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<v ->And is that an on going goal and commitment?</v>

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<v ->It is.</v>

00:12:20.659 --> 00:12:23.491
<v ->and have you considered commitments to</v>

00:12:23.491 --> 00:12:26.768
having directors within PG&amp;E's service territory?

00:12:26.768 --> 00:12:28.166
Or have you evaluated it?

00:12:28.166 --> 00:12:31.455
<v ->We have not yet, we've just begun the refresh process,</v>

00:12:31.455 --> 00:12:33.989
but certainly can take that into consideration.

00:12:33.989 --> 00:12:36.656
We currently have several members who are in fact

00:12:36.656 --> 00:12:38.524
in PG&amp;E's service territory.

00:12:38.524 --> 00:12:39.357
<v ->Thank you.</v>

00:12:39.357 --> 00:12:41.006
I have no further questions your honor.

00:12:41.006 --> 00:12:42.945
<v Judge>All right thank you.</v>

00:12:42.945 --> 00:12:45.612
Next up is Mr. Geesman for A4NR.

00:12:47.194 --> 00:12:48.141
<v ->I may have been unclear</v>

00:12:48.141 --> 00:12:50.426
in interpreting your earlier inquiry about

00:12:50.426 --> 00:12:53.452
cross-examination exhibits, I would like to use

00:12:53.452 --> 00:12:57.850
a couple of the exhibits that I utilized early this week.

00:12:57.850 --> 00:12:59.267
A4NR X3, A4NR X4.

00:13:02.672 --> 00:13:04.552
<v Judge>Okay, let's be off the record.</v>

00:13:04.552 --> 00:13:07.199
Do you have copies of those Ms. Brownell?

00:13:07.199 --> 00:13:09.052
<v Ms. Brownell>I don't, I don't believe I do.</v>

00:13:09.052 --> 00:13:10.452
<v Judge>Okay, we'll get those for you while--</v>

00:13:10.452 --> 00:13:12.293
<v Ms. Brownell>Thank you.</v>
<v Judge>We are--</v>

00:13:12.293 --> 00:13:13.326
<v ->I'm sorry your honor.</v>

00:13:13.326 --> 00:13:14.159
<v Judge>That's all right.</v>

00:13:14.159 --> 00:13:17.576
While we're off the record we'll do that.

00:13:30.536 --> 00:13:31.703
<v ->I have them.</v>

00:13:35.364 --> 00:13:36.197
Okay.

00:13:43.104 --> 00:13:46.187
(background chatter)

00:13:50.705 --> 00:13:53.070
<v Man>Does anybody else have one, I'd like to borrow.</v>

00:13:53.070 --> 00:13:54.653
Oh yeah, nevermind.

00:13:55.654 --> 00:13:57.321
<v Woman>Thank you.</v>

00:13:58.782 --> 00:14:00.259
<v Judge>All right everybody's got</v>

00:14:00.259 --> 00:14:01.759
A4NR3, X3, and X4?

00:14:05.428 --> 00:14:08.261
Okay, let's be back on the record.

00:14:09.873 --> 00:14:11.244
Go ahead Mr. Geesman.

00:14:11.244 --> 00:14:12.576
<v ->Good afternoon Ms. Brownell.</v>

00:14:12.576 --> 00:14:13.445
<v ->Afternoon.</v>

00:14:13.445 --> 00:14:15.199
<v ->My name is John Geesman.</v>

00:14:15.199 --> 00:14:17.083
We met each other years and years ago.

00:14:17.083 --> 00:14:18.731
<v ->We did indeed.</v>

00:14:18.731 --> 00:14:21.700
<v ->Today I'm representing the alliance</v>

00:14:21.700 --> 00:14:24.214
for nuclear responsibility.

00:14:24.214 --> 00:14:26.960
It's in their interest in this proceeding,

00:14:26.960 --> 00:14:29.460
is the impact of the PG&amp;E plan

00:14:30.425 --> 00:14:33.664
of reorganization rate payers.

00:14:33.664 --> 00:14:38.331
At page four-23, lines 31 and 32 of your testimony,

00:14:40.726 --> 00:14:45.469
you describe part of PG&amp;E's fundamental objective,

00:14:45.469 --> 00:14:49.591
as "Delivering affordable energy to its customers".

00:14:49.591 --> 00:14:53.548
And in page four-25, lines three and four,

00:14:53.548 --> 00:14:57.473
you speak of PG&amp;E's mission of safely and reliably,

00:14:57.473 --> 00:14:59.973
delivering affordable service.

00:15:01.870 --> 00:15:05.508
As a former utility regulator, what do you mean

00:15:05.508 --> 00:15:08.646
when you use that word affordable?

00:15:08.646 --> 00:15:11.921
<v ->I think that's a, that's a good question,</v>

00:15:11.921 --> 00:15:14.605
because sometimes it's interpreted as eye of the beholder,

00:15:14.605 --> 00:15:16.612
and I don't think that's the standard.

00:15:16.612 --> 00:15:18.889
I think a utility has operate

00:15:18.889 --> 00:15:21.722
as efficiently as it possibly can,

00:15:22.978 --> 00:15:26.612
in allocating capital to the appropriate resources,

00:15:26.612 --> 00:15:30.043
that will not only provide safe infrastructure,

00:15:30.043 --> 00:15:33.543
but infrastructure that is cost-efficient.

00:15:34.614 --> 00:15:38.161
I believe it needs to manage its resources,

00:15:38.161 --> 00:15:42.411
certainly the resources of both of its rate payers,

00:15:43.368 --> 00:15:46.135
very carefully to bring down the costs,

00:15:46.135 --> 00:15:49.068
and in fact as part of our plan of reorganization,

00:15:49.068 --> 00:15:51.666
we through the finance committee,

00:15:51.666 --> 00:15:53.435
but through all of the boards,

00:15:53.435 --> 00:15:56.489
are taking a good look at our business processes,

00:15:56.489 --> 00:15:58.876
as our procurement at our IT,

00:15:58.876 --> 00:16:02.560
to make sure that we are operating appropriately

00:16:02.560 --> 00:16:05.510
and efficiently, and I think there's room for improvement.

00:16:05.510 --> 00:16:09.534
So we hope to be able to bring down costs

00:16:09.534 --> 00:16:11.617
in our operating systems.

00:16:14.041 --> 00:16:18.103
<v Mr. Geesman>Is there any quantitative performance metric</v>

00:16:18.103 --> 00:16:20.425
that you believe the board should apply,

00:16:20.425 --> 00:16:23.302
in determining whether PG&amp;E's successful

00:16:23.302 --> 00:16:26.401
in this affordable objective?

00:16:26.401 --> 00:16:28.353
<v ->I think there are a number of metrics.</v>

00:16:28.353 --> 00:16:31.533
One of metrics that the finance committee is using,

00:16:31.533 --> 00:16:35.719
working with the CFO, is a monthly report on costs,

00:16:35.719 --> 00:16:39.552
on number of employees, on individual budgets,

00:16:42.269 --> 00:16:44.735
for which the directors of those budgets,

00:16:44.735 --> 00:16:47.425
owners of those budgets, are held accountable

00:16:47.425 --> 00:16:50.872
both to the finance committee, as well as the board.

00:16:50.872 --> 00:16:53.000
<v Mr. Geesman>Do those cost reduction steps</v>

00:16:53.000 --> 00:16:56.184
that the board has initiated extend to reviewing

00:16:56.184 --> 00:17:00.999
utility owned generation, for cost related retirement?

00:17:00.999 --> 00:17:03.009
<v ->We have not yet done that.</v>

00:17:03.009 --> 00:17:04.654
I can't say it's not being done.

00:17:04.654 --> 00:17:07.517
I have not yet seen any material on that.

00:17:07.517 --> 00:17:08.875
<v Mr. Geesman>But so far it's not been</v>

00:17:08.875 --> 00:17:10.589
at the top of your priority list?

00:17:10.589 --> 00:17:12.029
<v ->I wouldn't say it's not been at the</v>

00:17:12.029 --> 00:17:14.589
top of my priority list, I just haven't seen any work

00:17:14.589 --> 00:17:16.468
that's been done.

00:17:16.468 --> 00:17:19.401
There any number of initiatives being looked at

00:17:19.401 --> 00:17:21.818
as part of our restructuring.

00:17:23.028 --> 00:17:24.619
<v Mr. Geesman>Can I ask you to take a look at the</v>

00:17:24.619 --> 00:17:27.452
cross-examination exhibit A4NR X3?

00:17:29.943 --> 00:17:33.893
Which is a table found on page 21 of the company's

00:17:33.893 --> 00:17:36.976
February 18th, 2020, form 10K filing.

00:17:40.658 --> 00:17:42.825
<v ->A4NR X3, sorry I got it.</v>

00:17:46.274 --> 00:17:48.440
<v Mr. Geesman>It's a table taken from the 10K--</v>

00:17:48.440 --> 00:17:49.273
<v ->I see.</v>

00:17:51.320 --> 00:17:55.237
I'd like you to focus on that 44.6% number

00:17:57.311 --> 00:17:59.362
near the bottom of the table,

00:17:59.362 --> 00:18:03.933
right above the line that says total 100.0%.

00:18:03.933 --> 00:18:04.766
<v ->Yes.</v>

00:18:04.766 --> 00:18:05.946
<v ->You ought to read the footnotes</v>

00:18:05.946 --> 00:18:08.363
associated with that as well.

00:18:09.796 --> 00:18:10.722
<v ->Give me a moment.</v>
<v ->Sure.</v>

00:18:10.722 --> 00:18:11.889
<v ->I'm old now.</v>

00:18:44.323 --> 00:18:45.879
I think I have it.

00:18:45.879 --> 00:18:49.932
<v ->Would it be correct to say that in 2019,</v>

00:18:49.932 --> 00:18:53.804
PG&amp;E sold off a sizable proportion of it's generation

00:18:53.804 --> 00:18:55.971
and procurement portfolio?

00:18:56.993 --> 00:19:01.888
<v ->I'm not entirely familiar with the details of that.</v>

00:19:01.888 --> 00:19:02.721
We did...

00:19:04.384 --> 00:19:07.304
I don't recall that we have actually.

00:19:07.304 --> 00:19:10.685
<v ->Well 44.6% is a pretty large number, is it not?</v>

00:19:10.685 --> 00:19:11.518
<v ->Yep.</v>

00:19:11.518 --> 00:19:12.980
I'd have to really get back to you sir

00:19:12.980 --> 00:19:14.098
with the details of that.

00:19:14.098 --> 00:19:14.931
<v ->Okay.</v>

00:19:16.514 --> 00:19:19.957
I'm not talking about selling off the underlying assets,

00:19:19.957 --> 00:19:23.453
talking about selling off the output.

00:19:23.453 --> 00:19:24.627
<v ->Oh.</v>
<v ->Give it what hours</v>

00:19:24.627 --> 00:19:27.035
of electricity generated.

00:19:27.035 --> 00:19:28.233
<v ->Yep.</v>

00:19:28.233 --> 00:19:31.395
<v ->As I read that table, it suggests that</v>

00:19:31.395 --> 00:19:35.895
you sold 44.6% of it to the Cal ISO market place.

00:19:39.148 --> 00:19:41.012
<v ->I believe that to be accurate,</v>

00:19:41.012 --> 00:19:43.753
but I honestly really would need to

00:19:43.753 --> 00:19:46.058
familiarize myself with the details.

00:19:46.058 --> 00:19:51.058
<v ->If in fact that 44.6% was an accurate number,</v>

00:19:51.204 --> 00:19:54.406
that would represent a lot of churn, would it not?

00:19:54.406 --> 00:19:55.323
<v ->It would.</v>

00:20:01.543 --> 00:20:03.571
<v ->Do you think it's consistent with PG&amp;E's</v>

00:20:03.571 --> 00:20:06.136
affordability objective, to maintain an

00:20:06.136 --> 00:20:10.474
electricity supply portfolio, that is that much in excess

00:20:10.474 --> 00:20:12.474
of your customers needs?

00:20:14.014 --> 00:20:16.661
<v ->I think that we need to carefully balance that.</v>

00:20:16.661 --> 00:20:19.852
I certainly understand the nature of your question.

00:20:19.852 --> 00:20:24.269
I do believe it would be responsible to look at that.

00:20:25.143 --> 00:20:28.810
<v ->At page four-27, lines three to five,</v>

00:20:30.141 --> 00:20:33.874
you testify that the new boards are working with management

00:20:33.874 --> 00:20:37.036
to identify ways to, and I'm quoting

00:20:37.036 --> 00:20:40.284
"Achieve greater operational efficiency"

00:20:40.284 --> 00:20:42.699
"in financial discipline to enhance"

00:20:42.699 --> 00:20:45.532
"value to customers", close quote.

00:20:47.189 --> 00:20:48.341
You've been there a little while now,

00:20:48.341 --> 00:20:53.174
could you describe any progress you've made on that score?

00:20:54.587 --> 00:20:55.420
<v ->Yes.</v>

00:20:56.795 --> 00:21:01.113
We have looked hard and long at our procurement process,

00:21:01.113 --> 00:21:05.030
which we found to be inefficient, and reactive,

00:21:06.764 --> 00:21:10.355
and I think that can be said for one of the things,

00:21:10.355 --> 00:21:12.545
if you look at some of the issues we're confronting,

00:21:12.545 --> 00:21:16.183
that the company has been in a reactive mode.

00:21:16.183 --> 00:21:20.355
We have reassigned procurement at a higher level.

00:21:20.355 --> 00:21:23.272
We've been working with our restructuring experts

00:21:23.272 --> 00:21:25.564
to streamline the process,

00:21:25.564 --> 00:21:28.669
but at the same time get better transparency,

00:21:28.669 --> 00:21:33.669
and more discipline, RFP's that clearly articulate the need

00:21:34.078 --> 00:21:37.413
before we signed a contract, as opposed to after

00:21:37.413 --> 00:21:38.929
we've signed a contract.

00:21:38.929 --> 00:21:42.006
During the initial disasters,

00:21:42.006 --> 00:21:45.892
people were just hiring contractors at will,

00:21:45.892 --> 00:21:49.873
and we've walked that back so there's better accountability,

00:21:49.873 --> 00:21:53.895
and frankly I think more consolidation of information

00:21:53.895 --> 00:21:56.649
and data, which has been an issue at the company,

00:21:56.649 --> 00:21:59.317
so that we can better manage that process.

00:21:59.317 --> 00:22:00.328
I spoke about the work of--

00:22:00.328 --> 00:22:01.161
<v Judge>Ms. Brownell.</v>
<v ->Sorry.</v>

00:22:01.161 --> 00:22:01.994
<v Judge>I'm sorry to interrupt,</v>

00:22:01.994 --> 00:22:03.589
when you said procurement, looking at the

00:22:03.589 --> 00:22:07.555
procurement process, are you speaking about

00:22:07.555 --> 00:22:11.226
procurement of goods and services versus power procurement?

00:22:11.226 --> 00:22:12.059
<v ->Yes.</v>

00:22:12.059 --> 00:22:13.397
<v Judge>Thank you.</v>

00:22:13.397 --> 00:22:15.147
<v ->Thank you for that.</v>

00:22:16.170 --> 00:22:19.164
As I mentioned working with the finance committee,

00:22:19.164 --> 00:22:23.584
we're trying to look and hold people accountable

00:22:23.584 --> 00:22:28.584
at a director level, for managing budgets more carefully.

00:22:28.724 --> 00:22:32.517
We're trying to work with the HR folks,

00:22:32.517 --> 00:22:34.608
not only to streamline this system

00:22:34.608 --> 00:22:38.430
so that we can hire the right people in an appropriate time,

00:22:38.430 --> 00:22:43.375
but with less cumbersome bureaucracy, and paperwork,

00:22:43.375 --> 00:22:46.058
and more responsive to the business needs.

00:22:46.058 --> 00:22:48.808
We have looked at our IT systems,

00:22:50.196 --> 00:22:55.196
and are speaking with a very sophisticated data management

00:22:55.207 --> 00:22:59.853
artificial intelligence company based in California,

00:22:59.853 --> 00:23:02.889
to help us with an overlay of our data,

00:23:02.889 --> 00:23:05.389
so that we can get a more integrated picture

00:23:05.389 --> 00:23:07.018
of various parts of the business,

00:23:07.018 --> 00:23:10.268
including safety, procurement, finance.

00:23:12.357 --> 00:23:14.774
<v ->Page four-29, line 16,</v>

00:23:17.873 --> 00:23:21.475
all of the way through page four-31, line 19,

00:23:21.475 --> 00:23:23.955
you provide and extended description

00:23:23.955 --> 00:23:26.372
of PG&amp;E's two SnO committees.

00:23:26.372 --> 00:23:27.205
<v ->Yes.</v>

00:23:27.205 --> 00:23:30.898
<v ->Can you tell me what the letters SnO stand for?</v>

00:23:30.898 --> 00:23:33.566
<v ->Safety Nuclear Oversight.</v>

00:23:33.566 --> 00:23:35.551
<v ->There's an SnO committee at the utility,</v>

00:23:35.551 --> 00:23:38.991
and one at the holding company as well right?

00:23:38.991 --> 00:23:41.986
<v ->There is an SnO committee that is comprised</v>

00:23:41.986 --> 00:23:44.266
of the same people that serves both the utility

00:23:44.266 --> 00:23:45.559
and the corporation.

00:23:45.559 --> 00:23:46.963
<v ->And you're a member of committee?</v>

00:23:46.963 --> 00:23:48.826
<v ->I am a member.</v>

00:23:48.826 --> 00:23:52.057
<v ->And are you aware that the Commission requires</v>

00:23:52.057 --> 00:23:55.046
in a decision of, identified as

00:23:55.046 --> 00:23:57.879
D1906-008, PG&amp;E need to supply it,

00:24:00.692 --> 00:24:03.106
with non-confidential versions

00:24:03.106 --> 00:24:05.235
of the minutes of all board of directors

00:24:05.235 --> 00:24:07.170
and SnO committee meeting?

00:24:07.170 --> 00:24:08.435
<v ->I am.</v>

00:24:08.435 --> 00:24:11.319
<v ->Are you aware that controversy over,</v>

00:24:11.319 --> 00:24:13.606
when the minutes got sent in,

00:24:13.606 --> 00:24:15.834
that I discussed with Mr. Beasley yesterday?

00:24:15.834 --> 00:24:19.345
<v ->I am aware of it, and I can certainly comment,</v>

00:24:19.345 --> 00:24:21.786
that has been a huge issue,

00:24:21.786 --> 00:24:24.823
since we came to the company we've had probably,

00:24:24.823 --> 00:24:27.085
I don't know, four or five times as many meetings,

00:24:27.085 --> 00:24:31.312
they completely overwhelm the corporate secretaries office,

00:24:31.312 --> 00:24:33.122
so we've done a number of things.

00:24:33.122 --> 00:24:37.096
First I outsourced the committee meeting minutes

00:24:37.096 --> 00:24:39.937
and the board minutes, to our outside counsel,

00:24:39.937 --> 00:24:42.456
it's an expensive solution, but needed to be done,

00:24:42.456 --> 00:24:44.719
because we can't afford to get behind.

00:24:44.719 --> 00:24:47.376
We've chosen a new corporate secretary,

00:24:47.376 --> 00:24:49.552
who is restructuring the department

00:24:49.552 --> 00:24:51.344
so that we can be more timely,

00:24:51.344 --> 00:24:53.527
it's an embarrassment frankly to the,

00:24:53.527 --> 00:24:56.665
to me personally, as well as the company,

00:24:56.665 --> 00:25:00.259
and we respect the Commission and our obligations.

00:25:00.259 --> 00:25:03.533
We also frankly respect good corporate governance,

00:25:03.533 --> 00:25:07.032
and that is not a demonstration.

00:25:07.032 --> 00:25:07.865
<v Mr. Geesman>I really wanna thank you</v>

00:25:07.865 --> 00:25:09.210
for being here today.

00:25:09.210 --> 00:25:10.601
Those are all of my questions.

00:25:10.601 --> 00:25:12.199
Thank you your honor.

00:25:12.199 --> 00:25:13.032
<v Judge>Thank you</v>

00:25:13.032 --> 00:25:15.271
Mr. Geesman.
<v ->Good to see you.</v>

00:25:15.271 --> 00:25:17.501
<v Judge>All right, our next cross-examiner is</v>

00:25:17.501 --> 00:25:19.084
Mr. Long from TURN.

00:25:22.136 --> 00:25:23.095
<v Mr. Long>Thank you your honor.</v>

00:25:23.095 --> 00:25:26.347
Good afternoon Ms. Brownell, I'm Tom Long with TURN.

00:25:26.347 --> 00:25:27.933
I want to start by talking a little,

00:25:27.933 --> 00:25:29.737
just a little bit about your resume.

00:25:29.737 --> 00:25:32.964
I know you're a former state and federal regulator.

00:25:32.964 --> 00:25:34.444
Are you a lawyer?

00:25:34.444 --> 00:25:35.295
<v ->I am not.</v>

00:25:35.295 --> 00:25:36.270
<v Mr. Long>Well lucky you.</v>

00:25:36.270 --> 00:25:38.997
You're probably a happier person for it.

00:25:38.997 --> 00:25:41.457
<v ->Well one of my mentors was governor Dick Thornburgh</v>

00:25:41.457 --> 00:25:44.383
and when I told him I was going to law school he said,

00:25:44.383 --> 00:25:46.895
he said, "You will hate law school, don't do it",

00:25:46.895 --> 00:25:49.301
so I took his advice, 'cause he's a smart guy.

00:25:49.301 --> 00:25:50.932
<v ->Okay good.</v>

00:25:50.932 --> 00:25:53.834
Now you joined the board in April, 2019, is that right?

00:25:53.834 --> 00:25:54.899
<v ->I did.</v>

00:25:54.899 --> 00:25:57.654
<v ->Now what were the key elements</v>

00:25:57.654 --> 00:26:01.652
of PG&amp;E's history, that you felt you needed to be

00:26:01.652 --> 00:26:06.319
informed about, in order to be an effective board chair?

00:26:07.200 --> 00:26:08.975
<v ->Well first let me say that</v>

00:26:08.975 --> 00:26:13.743
having been involved in the energy crisis in 2001,

00:26:13.743 --> 00:26:18.507
during my tenure at the FERC, I followed PG&amp;E's history,

00:26:18.507 --> 00:26:21.507
and California's history very closely.

00:26:21.507 --> 00:26:24.657
We certainly had an onboarding process,

00:26:24.657 --> 00:26:27.990
that reviewed all of the major incidents

00:26:28.935 --> 00:26:33.602
that had occurred in the recent and fairly past history,

00:26:34.457 --> 00:26:37.971
to get a better understanding of the causes,

00:26:37.971 --> 00:26:40.971
and of the solutions, again that has

00:26:43.451 --> 00:26:46.487
formed some of our views in the things that we needed

00:26:46.487 --> 00:26:48.981
to focus on at the company.

00:26:48.981 --> 00:26:53.042
We also looked at issues like employee safety,

00:26:53.042 --> 00:26:55.041
which is a major concern for me,

00:26:55.041 --> 00:26:56.996
the company's been in the fourth quartile

00:26:56.996 --> 00:27:00.246
of employee safety for almost 20 years,

00:27:01.195 --> 00:27:03.419
that's just not a record we wanna continue,

00:27:03.419 --> 00:27:07.901
we wanna see our employee's, as well as the public,

00:27:07.901 --> 00:27:11.189
as safe as possible, so I don't know

00:27:11.189 --> 00:27:12.448
if that answers your question.

00:27:12.448 --> 00:27:14.869
We looked at a lot of things during our onboarding,

00:27:14.869 --> 00:27:16.452
and continue to do so.

00:27:16.452 --> 00:27:19.698
<v ->Okay you said that in this on boarding process</v>

00:27:19.698 --> 00:27:23.679
you reviewed, I think you said all major incidents

00:27:23.679 --> 00:27:26.096
of the past and recent years,

00:27:27.336 --> 00:27:31.334
based on what you've learnt about PG&amp;E's safety problems

00:27:31.334 --> 00:27:35.709
of the past decade, what is your perception of

00:27:35.709 --> 00:27:39.349
the reason or reasons for those problems?

00:27:39.349 --> 00:27:41.099
<v ->It's hard for me to</v>

00:27:42.215 --> 00:27:44.320
repeat history when I wasn't there,

00:27:44.320 --> 00:27:46.653
but my observations are one,

00:27:48.795 --> 00:27:52.295
we need to renew our commitment to safety,

00:27:54.140 --> 00:27:58.473
two, we need to and have a revamped our compensation

00:27:59.942 --> 00:28:04.143
with a much greater focus on safety metrics,

00:28:04.143 --> 00:28:05.941
to capture everyone's attention,

00:28:05.941 --> 00:28:08.700
and to get them to focus on the right issue,

00:28:08.700 --> 00:28:11.862
three, we need to develop better data

00:28:11.862 --> 00:28:16.406
and better datasets, hence our recent consultation with

00:28:16.406 --> 00:28:19.156
several firms who do that, third,

00:28:20.594 --> 00:28:24.177
I think we need to be sure that our employees

00:28:24.177 --> 00:28:28.927
have a better tools, one of the issues with recordkeeping

00:28:30.017 --> 00:28:35.017
is that it was paper driven, which increases both the

00:28:35.133 --> 00:28:38.686
opportunity for just simple human error,

00:28:38.686 --> 00:28:41.280
it's also time consuming and took supervisors

00:28:41.280 --> 00:28:44.962
out of the field, where their presence is critical

00:28:44.962 --> 00:28:47.129
to managing safety issues.

00:28:48.711 --> 00:28:52.941
I could go on and on, but I hope that gives you a picture.

00:28:52.941 --> 00:28:56.691
<v ->But looking at the types of problems that--</v>

00:28:57.808 --> 00:28:59.681
<v Judge>Let's be off the record for a second.</v>

00:28:59.681 --> 00:29:01.472
Unlike everybody else, you're too close.

00:29:01.472 --> 00:29:02.305
(laughing)
<v ->Yeah okay.</v>

00:29:02.305 --> 00:29:05.123
<v Judge>That might explain (drown out by laughter).</v>

00:29:05.123 --> 00:29:06.599
All right.
<v ->Got it.</v>

00:29:06.599 --> 00:29:10.103
<v Judge>Let's be back on the record.</v>

00:29:10.103 --> 00:29:12.935
<v ->Looking at the types of problems that have</v>

00:29:12.935 --> 00:29:14.634
taken place in the past decade,

00:29:14.634 --> 00:29:19.634
and I'm just gonna go over quick summary of some of them,

00:29:20.066 --> 00:29:23.765
there was a problem with the located mark tracking system.

00:29:23.765 --> 00:29:25.732
There were problems with recordkeeping,

00:29:25.732 --> 00:29:28.111
in both the gas transmission system,

00:29:28.111 --> 00:29:30.393
and the gas distribution system?

00:29:30.393 --> 00:29:31.798
Yeah see you're nodding your head to--

00:29:31.798 --> 00:29:32.885
<v ->Yes.</v>
<v ->For both of these you've</v>

00:29:32.885 --> 00:29:33.843
agreed that there are
<v ->yes, yes I have agreed.</v>

00:29:33.843 --> 00:29:35.670
<v ->They're again problems.</v>
<v ->Yep.</v>

00:29:35.670 --> 00:29:37.062
<v ->The monitor, the federal monitor,</v>

00:29:37.062 --> 00:29:40.874
identified problems with enhanced vegetation management

00:29:40.874 --> 00:29:42.941
recordkeeping, that right?

00:29:42.941 --> 00:29:43.774
<v ->Yes.</v>

00:29:43.774 --> 00:29:44.970
<v ->Okay.</v>

00:29:44.970 --> 00:29:49.720
There were problems with, in the October PSPS events with

00:29:50.830 --> 00:29:52.823
the website and communications, is that right?

00:29:52.823 --> 00:29:54.280
<v ->Yes.</v>

00:29:54.280 --> 00:29:56.662
<v ->There were inspections that failed to find</v>

00:29:56.662 --> 00:29:58.916
unsafe equipment leading to wildfires,

00:29:58.916 --> 00:30:00.845
that right?
<v ->Yes.</v>

00:30:00.845 --> 00:30:02.319
<v ->And again back to located mark,</v>

00:30:02.319 --> 00:30:05.053
there was a management failure to correct problems

00:30:05.053 --> 00:30:06.728
that were widely known in the organization,

00:30:06.728 --> 00:30:07.697
is that right?

00:30:07.697 --> 00:30:10.623
<v ->Apparently, I wasn't there but yes.</v>

00:30:10.623 --> 00:30:14.799
<v ->So to me these, these strike me as a wide-ranging problems</v>

00:30:14.799 --> 00:30:18.716
that in a diversity of areas of operations and,

00:30:20.586 --> 00:30:23.669
and various aspects of the operation,

00:30:24.603 --> 00:30:27.368
so does it strike you that way as well?

00:30:27.368 --> 00:30:28.868
<v ->It strikes me as</v>

00:30:32.692 --> 00:30:36.006
a problem with underlying business fundamentals.

00:30:36.006 --> 00:30:38.608
I spoke earlier of a procurement process

00:30:38.608 --> 00:30:43.558
that was not as transparent, or financially disciplined,

00:30:43.558 --> 00:30:46.141
or focused on the right things.

00:30:48.995 --> 00:30:51.395
I think I've mentioned our IT systems,

00:30:51.395 --> 00:30:54.788
and in fact that is one of the problems with

00:30:54.788 --> 00:30:56.936
our record keeping.

00:30:56.936 --> 00:31:00.042
I've mentioned technology as a solution to

00:31:00.042 --> 00:31:03.769
at least part of the inputs to those datasets,

00:31:03.769 --> 00:31:07.419
so you might define them as wide-ranging,

00:31:07.419 --> 00:31:09.168
and they certainly are,

00:31:09.168 --> 00:31:13.668
but I don't think the solutions are difficult to find.

00:31:15.678 --> 00:31:20.421
I think while we're certainly focused on wildfire safety,

00:31:20.421 --> 00:31:23.715
and improving all of that, we also have to make this

00:31:23.715 --> 00:31:27.612
an organization that follows, what I would call,

00:31:27.612 --> 00:31:29.779
common business practices.

00:31:32.017 --> 00:31:34.917
<v ->When you have a diversity of problems like this,</v>

00:31:34.917 --> 00:31:37.199
doesn't that also indicate that there were problems

00:31:37.199 --> 00:31:39.581
at the senior management level?

00:31:39.581 --> 00:31:41.082
<v ->I can't speak to a period of time</v>

00:31:41.082 --> 00:31:43.650
in which I was not present.

00:31:43.650 --> 00:31:45.805
<v ->Okay and your onboarding and learning about history</v>

00:31:45.805 --> 00:31:50.805
didn't inform you, enable you to inform yourself about that?

00:31:50.845 --> 00:31:52.184
That question?

00:31:52.184 --> 00:31:54.627
<v ->It certainly informs the way we look forward,</v>

00:31:54.627 --> 00:31:57.931
and the way we hold our current management accountable,

00:31:57.931 --> 00:32:00.691
the way we interact with our management,

00:32:00.691 --> 00:32:03.661
the level of engagement of this board,

00:32:03.661 --> 00:32:07.624
unlike a board that you would find in a typical company,

00:32:07.624 --> 00:32:10.826
is what I would almost call an activist board,

00:32:10.826 --> 00:32:13.575
really doing deep dives into places

00:32:13.575 --> 00:32:15.966
that you normally wouldn't go.

00:32:15.966 --> 00:32:18.429
<v ->But the statute that's the reason we're here</v>

00:32:18.429 --> 00:32:20.316
AB10 54, says we're supposed to

00:32:20.316 --> 00:32:25.210
consider PG&amp;E's governance in light of its safety history.

00:32:25.210 --> 00:32:27.969
So that's why I, that's why I'm focusing on history,

00:32:27.969 --> 00:32:30.108
and I'm asking whether, based on the history

00:32:30.108 --> 00:32:33.836
that you've seen, whether you have concerns about

00:32:33.836 --> 00:32:37.419
how senior management has conducted itself?

00:32:39.125 --> 00:32:42.134
<v ->Again, on our onboarding we looked at,</v>

00:32:42.134 --> 00:32:46.899
certainly the history, and then what it does is inform me

00:32:46.899 --> 00:32:51.428
on what we need to have for management going forward.

00:32:51.428 --> 00:32:54.374
Could I speculate on failures of management,

00:32:54.374 --> 00:32:57.231
or people who are participants and employees?

00:32:57.231 --> 00:33:00.888
I could, but I honestly, it would be speculation.

00:33:00.888 --> 00:33:02.796
<v Mr. Long>Okay and you did not undertake an effort</v>

00:33:02.796 --> 00:33:07.039
to determine whether issues with senior management

00:33:07.039 --> 00:33:10.503
were in any way responsible for the, the types of issues

00:33:10.503 --> 00:33:12.003
we just went over?

00:33:13.295 --> 00:33:16.545
<v ->I believe it informs what I do today,</v>

00:33:17.394 --> 00:33:20.551
I don't know that spending time speculating

00:33:20.551 --> 00:33:23.718
on the behavior of previous management

00:33:24.604 --> 00:33:27.425
would be particularly helpful.

00:33:27.425 --> 00:33:30.391
I need to spend my time on fixing problems and

00:33:30.391 --> 00:33:32.759
holding people accountable going forward.

00:33:32.759 --> 00:33:34.296
<v Mr. Long>Do you have an opinion about whether</v>

00:33:34.296 --> 00:33:37.509
PG&amp;E has been sufficiently clear about its expectations

00:33:37.509 --> 00:33:40.342
for senior management in the past?

00:33:41.395 --> 00:33:44.139
<v ->Again I wasn't there, in the past,</v>

00:33:44.139 --> 00:33:47.775
so I really can't speculate, what I can say is,

00:33:47.775 --> 00:33:52.018
we've changed our compensation to reflect,

00:33:52.018 --> 00:33:56.226
what I believe, is a greater degree of accountability

00:33:56.226 --> 00:34:01.025
for public safety, employee safety, wildfire mitigation,

00:34:01.025 --> 00:34:03.882
and infrastructure management.

00:34:03.882 --> 00:34:05.655
<v ->Okay, I'm gonna shift now to a different topic</v>

00:34:05.655 --> 00:34:07.413
and ask you to look at page four-eight

00:34:07.413 --> 00:34:08.913
of your testimony.

00:34:16.075 --> 00:34:20.242
And I'm again going to, as Ms. Sheriff did ask you

00:34:21.230 --> 00:34:23.511
a question or two about the word, the term independence

00:34:23.511 --> 00:34:28.087
that you use on a page, in the second paragraph,

00:34:28.087 --> 00:34:30.492
as I know, I know Ms. Sheriff asked you a question

00:34:30.492 --> 00:34:33.368
or two about that, but I just want to get a clear definition

00:34:33.368 --> 00:34:36.785
from you, does independence as you use it

00:34:38.309 --> 00:34:42.976
on line 10, mean that the board member is not an officer

00:34:44.894 --> 00:34:47.297
or employer, employee of the company?

00:34:47.297 --> 00:34:49.164
Is that what you mean by independence?

00:34:49.164 --> 00:34:51.767
<v ->I think no, more than that, I mean</v>

00:34:51.767 --> 00:34:55.170
they're independent from any material interests

00:34:55.170 --> 00:34:58.753
in the company, or partners to the company,

00:35:00.145 --> 00:35:03.593
I think they're independent from any special influence,

00:35:03.593 --> 00:35:06.786
if I had to paraphrase the New York Stock Exchange.

00:35:06.786 --> 00:35:10.286
So that would include all kinds of people,

00:35:11.659 --> 00:35:15.612
including vendors, including shareholders,

00:35:15.612 --> 00:35:18.779
including politics, we need not to be,

00:35:21.250 --> 00:35:23.263
we need to be free of anything

00:35:23.263 --> 00:35:26.430
that might compromise decision making.

00:35:27.460 --> 00:35:29.691
<v ->So the board...</v>

00:35:29.691 --> 00:35:32.691
So a board member to be independent,

00:35:34.347 --> 00:35:36.493
should not be a shareholder?

00:35:36.493 --> 00:35:38.027
<v ->I'm not saying that.</v>

00:35:38.027 --> 00:35:41.620
In fact in many boards, you're encouraged

00:35:41.620 --> 00:35:44.852
to be a shareholder, because it's a demonstration

00:35:44.852 --> 00:35:46.965
of your belief in the long-term viability

00:35:46.965 --> 00:35:49.136
and success in the company.

00:35:49.136 --> 00:35:52.356
So I think if you were a majority shareholder

00:35:52.356 --> 00:35:53.854
of the company that probably

00:35:53.854 --> 00:35:56.366
would not be viewed as independent

00:35:56.366 --> 00:35:59.469
from, by the New York Stock Exchange.

00:35:59.469 --> 00:36:01.244
<v Mr. Long>Okay, so independence includes</v>

00:36:01.244 --> 00:36:03.949
not being a majority shareholder?

00:36:03.949 --> 00:36:05.762
But it's okay to be a shareholder?

00:36:05.762 --> 00:36:08.011
<v ->I think in many cases it does,</v>

00:36:08.011 --> 00:36:10.719
it does give you a common interests with the company.

00:36:10.719 --> 00:36:14.281
I am not a shareholder and by the way.

00:36:14.281 --> 00:36:17.031
<v ->And you said, mention, vendors,</v>

00:36:24.178 --> 00:36:27.387
To be independent, a director should not be

00:36:27.387 --> 00:36:28.220
bouyed by a vendor?

00:36:28.220 --> 00:36:30.053
Is that what you mean?

00:36:32.096 --> 00:36:34.682
<v ->I would suggest that could possibly compromise them,</v>

00:36:34.682 --> 00:36:38.981
and as you know FERC has a rule about a board members

00:36:38.981 --> 00:36:41.726
not serving on a utility board,

00:36:41.726 --> 00:36:44.143
as well so board of a vendor.

00:36:45.153 --> 00:36:46.923
I think anything that might even

00:36:46.923 --> 00:36:51.256
create the perception of compromised decision-making

00:36:52.477 --> 00:36:56.463
would be considered under the independence definition.

00:36:56.463 --> 00:36:59.059
<v ->Okay, now I wanna delve into this a little more</v>

00:36:59.059 --> 00:37:03.142
by looking at a passage from page four-nine,

00:37:05.549 --> 00:37:09.575
beginning on line seven, and I'm going to read that,

00:37:09.575 --> 00:37:13.658
it says "The directors of PG&amp;E, in my experience"

00:37:14.809 --> 00:37:17.146
"have taken into account impacts on customers"

00:37:17.146 --> 00:37:20.420
"and other stakeholders, as we have discharged"

00:37:20.420 --> 00:37:22.999
"these fiduciary duties."

00:37:22.999 --> 00:37:24.930
"Directors must be free to consider and balance"

00:37:24.930 --> 00:37:29.599
"all such considerations in an unbiased fashion, and must"

00:37:29.599 --> 00:37:32.153
"avoid conflicts of interest that could impair"

00:37:32.153 --> 00:37:34.639
"their ability to do so", and then it goes on.

00:37:34.639 --> 00:37:35.472
You see that?

00:37:35.472 --> 00:37:36.305
<v ->I do.</v>

00:37:36.305 --> 00:37:37.138
<v ->Okay.</v>

00:37:37.138 --> 00:37:40.198
So you mentioned that passage, fiduciary duties,

00:37:40.198 --> 00:37:43.927
and earlier that same paragraph you had stated that

00:37:43.927 --> 00:37:46.324
the board members have a fiduciary duty

00:37:46.324 --> 00:37:48.158
to act in the best interests of shareholders,

00:37:48.158 --> 00:37:49.654
is that correct?

00:37:49.654 --> 00:37:52.334
<v ->That is correct, that is the commonly held definition,</v>

00:37:52.334 --> 00:37:54.016
and I believe the law.

00:37:54.016 --> 00:37:56.337
<v ->Right I was just gonna ask that, that is a legal duty?</v>

00:37:56.337 --> 00:37:57.170
<v ->Yes.</v>

00:37:57.170 --> 00:37:58.184
<v ->Okay.</v>

00:37:58.184 --> 00:38:01.072
<v ->Now you do not have a similar fiduciary duty to customers,</v>

00:38:01.072 --> 00:38:02.881
is that correct?

00:38:02.881 --> 00:38:07.387
<v ->I believe a fiduciary responsibility to shareholders,</v>

00:38:07.387 --> 00:38:10.297
means that we do everything possible

00:38:10.297 --> 00:38:13.130
to deliver value to the customers,

00:38:14.222 --> 00:38:18.055
to the communities, and to other stakeholders,

00:38:19.358 --> 00:38:21.597
that's particularly true, I think,

00:38:21.597 --> 00:38:24.680
in a utility, where both the economy,

00:38:26.285 --> 00:38:30.031
but the very well-being of individuals and the community,

00:38:30.031 --> 00:38:31.520
is part of that duty.

00:38:31.520 --> 00:38:33.442
<v ->Okay, and I am gonna repeat my question,</v>

00:38:33.442 --> 00:38:35.257
in which was a yes or no question,

00:38:35.257 --> 00:38:38.229
you do not have a fiduciary duty, as a director,

00:38:38.229 --> 00:38:41.352
to customers, is that right?

00:38:41.352 --> 00:38:43.873
<v ->As it's defined in the law, yes.</v>

00:38:43.873 --> 00:38:44.706
<v ->Okay.</v>

00:38:45.762 --> 00:38:48.646
<v ->Yet you say the board takes into account,</v>

00:38:48.646 --> 00:38:52.175
impacts on customers, and other stakeholders,

00:38:52.175 --> 00:38:55.284
and should do so in an unbiased fashion.

00:38:55.284 --> 00:38:58.319
So the question that raises from me is,

00:38:58.319 --> 00:39:02.409
how do you take customer considerations, interests,

00:39:02.409 --> 00:39:07.409
into account, without bias, when you're fiduciary duty is

00:39:07.781 --> 00:39:09.726
to the shareholders, and you don't have such a duty

00:39:09.726 --> 00:39:11.762
to the customer?

00:39:11.762 --> 00:39:14.535
<v ->If I'm not serving the customers,</v>

00:39:14.535 --> 00:39:17.528
if I have a massive failure in safety,

00:39:17.528 --> 00:39:22.111
as we have seen, if the people who purchase my services

00:39:25.476 --> 00:39:28.476
and pay my bills, are not satisfied,

00:39:30.837 --> 00:39:35.754
that has a direct translation into the financial well-being

00:39:36.702 --> 00:39:39.628
of the company, in other words,

00:39:39.628 --> 00:39:42.378
the stock price declines significantly

00:39:42.378 --> 00:39:46.894
when you have ignored these fundamental responsibilities,

00:39:46.894 --> 00:39:50.426
so I think it's, you asked the question honestly

00:39:50.426 --> 00:39:52.635
as if they're mutually exclusive,

00:39:52.635 --> 00:39:54.961
and I don't believe that's actually a

00:39:54.961 --> 00:39:56.713
reflection of how it works.

00:39:56.713 --> 00:39:58.065
<v ->Okay.</v>

00:39:58.065 --> 00:39:59.800
But doesn't fiduciary duty mean that

00:39:59.800 --> 00:40:02.993
if there is a conflict between customer interests

00:40:02.993 --> 00:40:05.060
and shareholder interests,

00:40:05.060 --> 00:40:08.143
then you have to put the interests of shareholders first?

00:40:08.143 --> 00:40:10.960
<v ->I can't imagine in which a conflict,</v>

00:40:10.960 --> 00:40:12.946
we have not been presented with one,

00:40:12.946 --> 00:40:16.495
nor have I ever, candidly on the boards that I've served.

00:40:16.495 --> 00:40:19.678
<v ->Okay let's think about this issue,</v>

00:40:19.678 --> 00:40:23.046
whether shareholders should pay

00:40:23.046 --> 00:40:26.181
for billions of dollars of wildfire liability,

00:40:26.181 --> 00:40:28.633
or should try to recover those costs in higher rates

00:40:28.633 --> 00:40:30.636
paid by rate payers?

00:40:30.636 --> 00:40:35.636
Do you not see a potential tension or a conflict of interest

00:40:36.472 --> 00:40:39.826
between the position of shareholders there,

00:40:39.826 --> 00:40:42.776
and the interests of customers?

00:40:42.776 --> 00:40:45.486
<v ->I think in our case the shareholders have</v>

00:40:45.486 --> 00:40:49.236
actually offered to pay a significant amount.

00:40:50.563 --> 00:40:55.088
I think it depends honestly on the determination

00:40:55.088 --> 00:40:56.961
of those kind of events.

00:40:56.961 --> 00:40:58.893
<v Mr. Long>Let's not, let's divorce it from</v>

00:40:58.893 --> 00:40:59.908
the particular, the plan of

00:40:59.908 --> 00:41:01.173
reorganization here--
<v ->Okay.</v>

00:41:01.173 --> 00:41:02.419
<v Mr. Long>And just talk generally about a</v>

00:41:02.419 --> 00:41:04.144
situation that could arise,

00:41:04.144 --> 00:41:05.610
and it could be a gas explosion,

00:41:05.610 --> 00:41:08.811
it could be anything where's an issue about

00:41:08.811 --> 00:41:11.801
whether or not PG&amp;E is, whether its shareholders

00:41:11.801 --> 00:41:14.987
are paying for the costs, or whether seeking

00:41:14.987 --> 00:41:18.142
the liability costs that result from an incident,

00:41:18.142 --> 00:41:21.867
or whether those costs are requested to be recovered

00:41:21.867 --> 00:41:23.209
from rate payers.

00:41:23.209 --> 00:41:24.141
Do you not see that there's the

00:41:24.141 --> 00:41:25.611
potential for a conflict there?

00:41:25.611 --> 00:41:27.911
<v ->Perhaps there is a potential for conflict,</v>

00:41:27.911 --> 00:41:30.442
I don't feel that potential,

00:41:30.442 --> 00:41:34.709
and I think it is very dependent on circumstances,

00:41:34.709 --> 00:41:38.556
on the regulatory compact, on what rules

00:41:38.556 --> 00:41:42.359
under which people are our operating,

00:41:42.359 --> 00:41:44.424
and the consistency of those rules.

00:41:44.424 --> 00:41:47.049
So I understand why you might perceive that,

00:41:47.049 --> 00:41:50.174
I just haven't had that experience at this point.

00:41:50.174 --> 00:41:54.757
<v ->And let me ask you another, another hypothetical.</v>

00:41:54.757 --> 00:41:58.246
Let's say that there's a director on the PG&amp;E board

00:41:58.246 --> 00:42:01.135
that is an avowed customer advocate,

00:42:01.135 --> 00:42:04.962
say I'm gonna put customer interests first,

00:42:04.962 --> 00:42:08.103
would that be a conflict of interest?

00:42:08.103 --> 00:42:10.546
<v ->I'd like to believe that all of our board members</v>

00:42:10.546 --> 00:42:13.629
are customer advocates, and I've seen

00:42:15.613 --> 00:42:19.552
a lot of demonstrations of that in board decisions.

00:42:19.552 --> 00:42:21.343
<v ->And so if that person said "On this matter"</v>

00:42:21.343 --> 00:42:22.943
"I'm going to put the interests of customers"

00:42:22.943 --> 00:42:26.360
"ahead of the interests of shareholders",

00:42:27.360 --> 00:42:31.193
would that person have a conflict of interest?

00:42:33.278 --> 00:42:34.695
<v ->I'm honestly...</v>

00:42:35.662 --> 00:42:40.090
I don't believe, as I've said, these are mutually exclusive.

00:42:40.090 --> 00:42:41.433
<v ->Okay I understand your position, that's okay,</v>

00:42:41.433 --> 00:42:42.295
we don't, we don't--

00:42:42.295 --> 00:42:43.128
<v ->Okay.</v>

00:42:43.128 --> 00:42:43.961
<v ->Yeah.</v>

00:42:43.961 --> 00:42:45.032
I'm not trying to cut you off, it's just

00:42:45.032 --> 00:42:46.908
I realize the question was getting a little repetitive,

00:42:46.908 --> 00:42:47.741
and I just wanted

00:42:47.741 --> 00:42:49.986
to move on, so.
<v ->Sure.</v>

00:42:49.986 --> 00:42:52.423
<v ->Let's talk about a slightly different issue,</v>

00:42:52.423 --> 00:42:55.673
on page four-23 of your testimony,

00:42:57.185 --> 00:42:59.463
and this, there are gonna be echos

00:42:59.463 --> 00:43:00.747
of what we've just been talking about.

00:43:00.747 --> 00:43:02.914
I acknowledge--
<v ->Okay, that's all right.</v>

00:43:02.914 --> 00:43:04.512
<v ->But it is slightly different.</v>

00:43:04.512 --> 00:43:09.512
And this is a section E one, and this is about how the goals

00:43:10.456 --> 00:43:14.373
of safety and financial performance relate to each other.

00:43:14.373 --> 00:43:15.755
Do you see that section I'm talking about?

00:43:15.755 --> 00:43:16.639
<v ->I do.</v>

00:43:16.639 --> 00:43:19.623
<v ->Now I think your position is that safety</v>

00:43:19.623 --> 00:43:22.046
and financial performance are not conflicting goals,

00:43:22.046 --> 00:43:23.295
is that right now?

00:43:23.295 --> 00:43:24.128
<v ->That's correct.</v>

00:43:24.128 --> 00:43:24.961
<v ->Okay.</v>

00:43:24.961 --> 00:43:28.020
<v ->Now are you saying then, that it is not even possible</v>

00:43:28.020 --> 00:43:30.960
for those goals to come into conflict?

00:43:30.960 --> 00:43:33.654
<v ->I don't see a set of circumstances in which</v>

00:43:33.654 --> 00:43:35.045
that would happen.

00:43:35.045 --> 00:43:38.443
Safety would always, always be first,

00:43:38.443 --> 00:43:42.651
because it's an underlying element of financial performance,

00:43:42.651 --> 00:43:45.248
and you can see that in the stock price of PG&amp;E,

00:43:45.248 --> 00:43:48.585
or any other company that had a major safety issue.

00:43:48.585 --> 00:43:51.026
<v Mr. Long >Okay so, I don't know if your aware,</v>

00:43:51.026 --> 00:43:54.527
TURN has recommended that PG&amp;E directors,

00:43:54.527 --> 00:43:57.049
that you're required to agree in writing,

00:43:57.049 --> 00:44:01.152
that if shareholder interests and safety come into conflict,

00:44:01.152 --> 00:44:03.394
that safety takes priority,

00:44:03.394 --> 00:44:07.447
do you have a problem with that recommendation by TURN?

00:44:07.447 --> 00:44:08.651
<v ->I'd have to think about that.</v>

00:44:08.651 --> 00:44:11.952
I'm aware of the recommendation, but we could also sign

00:44:11.952 --> 00:44:16.202
something that says "If fiduciary responsibilities"

00:44:17.579 --> 00:44:22.053
"and reliability came into conflict", or "sustainability",

00:44:22.053 --> 00:44:25.684
or "environmental stewardship", Y'know,

00:44:25.684 --> 00:44:30.267
all of those are underpinnings of a successful company,

00:44:31.177 --> 00:44:35.132
and therefore it's financial, it's financial stability,

00:44:35.132 --> 00:44:36.828
and performance.

00:44:36.828 --> 00:44:40.409
So I understand why you would like that,

00:44:40.409 --> 00:44:43.073
I just would have to have a better understanding of how

00:44:43.073 --> 00:44:47.192
one would define that, I believe we're held accountable

00:44:47.192 --> 00:44:49.639
to a standard of performance,

00:44:49.639 --> 00:44:52.922
particularly when you're elected year by year,

00:44:52.922 --> 00:44:55.024
so I appreciate that suggestion,

00:44:55.024 --> 00:44:57.869
and I'm happy to take it under consideration,

00:44:57.869 --> 00:44:59.892
I can't make that commitment without a

00:44:59.892 --> 00:45:02.779
fuller understanding of what that would actually mean.

00:45:02.779 --> 00:45:06.232
<v ->Well, with all respect this was a proposal</v>

00:45:06.232 --> 00:45:08.696
that we put in our December 13th testimony,

00:45:08.696 --> 00:45:11.869
we've asked PG&amp;E about the data request responses,

00:45:11.869 --> 00:45:14.635
and we've got nothing but evasion,

00:45:14.635 --> 00:45:16.978
and so I was hoping you would give me an answer,

00:45:16.978 --> 00:45:19.978
and I'm sorry but it sounds like you're still

00:45:19.978 --> 00:45:21.186
not able to answer the question

00:45:21.186 --> 00:45:23.596
of whether you would agree with that recommendation.

00:45:23.596 --> 00:45:25.116
<v ->I understand the recommendation,</v>

00:45:25.116 --> 00:45:27.494
I respect the recommendation, I need to understand

00:45:27.494 --> 00:45:32.494
the implications of that, before I commit an entire board.

00:45:32.624 --> 00:45:35.392
<v ->Now, in terms of whether safety</v>

00:45:35.392 --> 00:45:39.892
and financial performance can ever come into conflict,

00:45:42.315 --> 00:45:44.482
I assume you're aware that

00:45:45.586 --> 00:45:48.237
leading up to the San Bruno explosion,

00:45:48.237 --> 00:45:52.095
there was, and this is what the Commission identified

00:45:52.095 --> 00:45:55.485
as part of the problem, that there was an excessive focus

00:45:55.485 --> 00:45:59.149
on financial performance, to the detriment

00:45:59.149 --> 00:46:00.977
of doing the work that was necessary

00:46:00.977 --> 00:46:02.885
to have a safe gas infrastructure,

00:46:02.885 --> 00:46:04.635
are you familiar with that?

00:46:04.635 --> 00:46:08.586
<v ->I'm familiar that San Bruno was a call to action</v>

00:46:08.586 --> 00:46:11.519
for the entire pipeline community, who,

00:46:11.519 --> 00:46:14.519
who's recordkeeping had not kept up,

00:46:18.596 --> 00:46:22.429
Whether that was illustrated at preference for

00:46:23.908 --> 00:46:27.223
financial performance, and not spending

00:46:27.223 --> 00:46:30.691
the necessary capital, or whether it was

00:46:30.691 --> 00:46:33.646
simply an inexcusable oversight, I do know

00:46:33.646 --> 00:46:36.383
it caused an entire industry to rethink,

00:46:36.383 --> 00:46:38.414
and also check on their own records,

00:46:38.414 --> 00:46:41.324
because I was on a pipeline board at the time.

00:46:41.324 --> 00:46:45.092
<v ->So, but my question is are you ready,</v>

00:46:45.092 --> 00:46:46.347
can you accept,

00:46:46.347 --> 00:46:50.143
or do you agree, that part of what happened there

00:46:50.143 --> 00:46:53.976
was that PG&amp;E emphasized financial performance

00:46:54.849 --> 00:46:57.849
to the detriment of safety.

00:46:57.849 --> 00:46:59.407
<v ->If the Commission determined that,</v>

00:46:59.407 --> 00:47:01.856
I accept the Commissions definition.

00:47:01.856 --> 00:47:04.319
I think there are a lot of things that can go wrong

00:47:04.319 --> 00:47:06.590
with recordkeeping, and I've seen some of them,

00:47:06.590 --> 00:47:10.875
none of which have to do with not spending adequate

00:47:10.875 --> 00:47:13.610
financial resources to support

00:47:13.610 --> 00:47:15.985
the core mission of the company.

00:47:15.985 --> 00:47:18.775
<v ->Okay I'm gonna move onto a new topic,</v>

00:47:18.775 --> 00:47:20.045
which you've raised a couple times,

00:47:20.045 --> 00:47:22.509
you've talked about compensation for executives?

00:47:22.509 --> 00:47:23.342
<v ->Yes.</v>
<v ->That's what I want,</v>

00:47:23.342 --> 00:47:25.275
just to talk about it, a very high level with you now,

00:47:25.275 --> 00:47:26.980
I know there's a, another witness

00:47:26.980 --> 00:47:28.184
who's going to go into the details,

00:47:28.184 --> 00:47:30.688
but I'm gonna ask you from a high level board perspective.

00:47:30.688 --> 00:47:32.110
<v ->Yes.</v>
<v ->Okay.</v>

00:47:32.110 --> 00:47:36.277
<v ->So, and actually, if you could just look at page</v>

00:47:37.443 --> 00:47:39.703
four-four, the last bullet,

00:47:39.703 --> 00:47:42.453
that you have on that page about

00:47:43.332 --> 00:47:46.137
how the board fulfills its roles.

00:47:46.137 --> 00:47:47.940
Let me know when you're at four-four.

00:47:47.940 --> 00:47:48.773
<v ->I'm there.</v>

00:47:48.773 --> 00:47:51.015
<v ->Okay the last bullet says "One of the ways"</v>

00:47:51.015 --> 00:47:53.304
"for the board to fulfill its roles"

00:47:53.304 --> 00:47:57.799
"is to hold the CEO and management accountable for results",

00:47:57.799 --> 00:47:59.856
can we agree that one way the board can do that

00:47:59.856 --> 00:48:01.520
is through executive compensation policies?

00:48:01.520 --> 00:48:02.603
<v ->Absolutely.</v>

00:48:04.562 --> 00:48:07.294
<v ->And one component of executive compensation,</v>

00:48:07.294 --> 00:48:09.602
is incentive compensation, is that right?

00:48:09.602 --> 00:48:11.145
<v ->That is correct.</v>

00:48:11.145 --> 00:48:13.380
<v ->As opposed to foundational or based pay, right?</v>

00:48:13.380 --> 00:48:14.213
<v ->That's correct.</v>

00:48:14.213 --> 00:48:15.046
<v ->Okay.</v>

00:48:15.046 --> 00:48:19.305
Now for the incentive compensation portion, excuse me,

00:48:19.305 --> 00:48:22.788
would you agree that where the achievement milestones,

00:48:22.788 --> 00:48:26.583
to qualify for the incentive compensation,

00:48:26.583 --> 00:48:28.932
where they are set is very important?

00:48:28.932 --> 00:48:30.015
<v ->Absolutely.</v>

00:48:32.505 --> 00:48:35.702
<v ->And what would happen if those achievement miles,</v>

00:48:35.702 --> 00:48:38.702
milestones were too easy to achieve?

00:48:40.021 --> 00:48:41.773
<v ->I think the board would not be fulfilling</v>

00:48:41.773 --> 00:48:46.023
it's responsibility to hold management accountable.

00:48:49.711 --> 00:48:51.692
<v ->And it would not be a good situation</v>

00:48:51.692 --> 00:48:53.859
if the milestones were set

00:48:55.047 --> 00:48:59.291
such that they could be so easily achieved,

00:48:59.291 --> 00:49:01.504
that effectively the incentive compensation

00:49:01.504 --> 00:49:03.142
becomes guaranteed conversation?

00:49:03.142 --> 00:49:04.566
That would not be a good thing, is that right?

00:49:04.566 --> 00:49:09.566
<v ->It's not incentive compensation under those circumstances.</v>

00:49:10.022 --> 00:49:12.368
<v ->And then finally, I'd like to direct you to</v>

00:49:12.368 --> 00:49:16.785
page four-32 of your testimony, lines 21 and 22.

00:49:26.543 --> 00:49:27.445
<v ->Yes.</v>

00:49:27.445 --> 00:49:30.839
<v ->There you're referring to PG&amp;E's execution of</v>

00:49:30.839 --> 00:49:33.151
the PSPS events in October 2019,

00:49:33.151 --> 00:49:36.151
as, the word you use is "imperfect",

00:49:37.446 --> 00:49:40.734
now earlier in your testimony, you say that

00:49:40.734 --> 00:49:42.847
the board is responsible for setting the tone at the top,

00:49:42.847 --> 00:49:44.953
you're the board chair, is that the

00:49:44.953 --> 00:49:47.278
right word to capture what went wrong with

00:49:47.278 --> 00:49:50.403
PG&amp;E's shut offs last October?

00:49:50.403 --> 00:49:54.320
<v ->I think there is no word to actually describe</v>

00:49:55.335 --> 00:49:58.043
the impact of the things that went wrong,

00:49:58.043 --> 00:49:59.212
during that period of time.

00:49:59.212 --> 00:50:02.747
I was in the EOC, I was working with the teams

00:50:02.747 --> 00:50:07.134
to find quick solutions, it's why we've spent

00:50:07.134 --> 00:50:10.738
the time since then, with a number of work streams

00:50:10.738 --> 00:50:14.297
to address those issues, it's among the reasons,

00:50:14.297 --> 00:50:17.567
but there were many, that the compensation committee

00:50:17.567 --> 00:50:20.816
and John Lowe can testify that the details

00:50:20.816 --> 00:50:25.392
has readjusted the compensation to focus on safety,

00:50:25.392 --> 00:50:28.975
to focus on including a sub-metric on PSPS.

00:50:29.961 --> 00:50:32.413
<v ->I'm just curious, why you couldn't have chosen</v>

00:50:32.413 --> 00:50:36.429
a phrase like, poorly executed, instead of

00:50:36.429 --> 00:50:38.444
a word like imperfect?

00:50:38.444 --> 00:50:41.881
<v ->I accept your recommendation, poorly executed would be</v>

00:50:41.881 --> 00:50:43.798
absolutely a good term.

00:50:45.684 --> 00:50:47.189
<v ->That's all my questions, thank you.</v>

00:50:47.189 --> 00:50:48.705
<v ->Thank you.</v>

00:50:48.705 --> 00:50:50.605
<v Judge>All right, thank you Mr. Long.</v>

00:50:50.605 --> 00:50:52.202
Mr. Strauss.

00:50:52.202 --> 00:50:54.399
<v Mr. Strauss>Thank you your honor.</v>

00:50:54.399 --> 00:50:55.232
<v ->Hi.</v>

00:50:56.895 --> 00:50:58.711
<v ->Ms. Brownell, my name is Ariel Strauss,</v>

00:50:58.711 --> 00:51:01.382
I represent Small Business Utility Advocates,

00:51:01.382 --> 00:51:03.237
a non-profit, representing the interests

00:51:03.237 --> 00:51:07.876
of small businesses and other small commercial customers.

00:51:07.876 --> 00:51:11.631
A few moments ago, you said something to the effect

00:51:11.631 --> 00:51:14.278
that you could not imagine

00:51:14.278 --> 00:51:17.028
a serious conflict between safety

00:51:18.754 --> 00:51:22.767
and financial performance, is that roughly correct?

00:51:22.767 --> 00:51:23.949
<v ->That's correct.</v>

00:51:23.949 --> 00:51:26.135
<v ->And yet we're all here today,</v>

00:51:26.135 --> 00:51:28.294
because there is some sort of serious oversight

00:51:28.294 --> 00:51:31.559
and safety, that resulted in bankruptcy.

00:51:31.559 --> 00:51:32.839
<v ->I agree with that.</v>
<v ->Right?</v>

00:51:32.839 --> 00:51:33.672
Okay.

00:51:36.691 --> 00:51:40.647
And in the transition to increase focus on safety,

00:51:40.647 --> 00:51:43.380
is there a heightened risk that certain core competencies

00:51:43.380 --> 00:51:46.547
may be overlooked, in that transition?

00:51:48.433 --> 00:51:49.266
<v ->Could you clarify</v>

00:51:49.266 --> 00:51:51.557
what core competencies you might?

00:51:51.557 --> 00:51:53.357
<v ->Sure, other essential services,</v>

00:51:53.357 --> 00:51:57.522
and other essential areas of business that

00:51:57.522 --> 00:52:01.022
PG&amp;E must ensure are adequately addressed.

00:52:02.648 --> 00:52:06.981
<v ->No I don't, I don't think, it's not our intention,</v>

00:52:07.867 --> 00:52:11.408
nor do I think it's necessary to improve our safety record,

00:52:11.408 --> 00:52:14.658
to improve our operational performance,

00:52:16.334 --> 00:52:19.876
while ignoring certain other constituencies

00:52:19.876 --> 00:52:23.877
or obligations that we have, if that answers your question?

00:52:23.877 --> 00:52:25.026
<v Mr. Strauss>Not exactly.</v>
<v ->Okay.</v>

00:52:25.026 --> 00:52:26.159
<v Mr. Strauss>What I'm asking is,</v>

00:52:26.159 --> 00:52:28.848
there's a finite amount of resources available,

00:52:28.848 --> 00:52:31.162
there's a finite number of people on the board,

00:52:31.162 --> 00:52:33.858
they're very busy people, I understand that you are saying

00:52:33.858 --> 00:52:36.078
that they spend more time in the field,

00:52:36.078 --> 00:52:37.859
they'll will be transitioning more responsibilities

00:52:37.859 --> 00:52:40.975
to the SnO committee, in that environment,

00:52:40.975 --> 00:52:42.041
is there a heightened risk,

00:52:42.041 --> 00:52:46.700
that certain other responsibilities could be overlooked?

00:52:46.700 --> 00:52:49.936
<v ->I don't believe so, and we can talk about specifics,</v>

00:52:49.936 --> 00:52:51.641
if you want to talk about

00:52:51.641 --> 00:52:54.020
our commitment to the small business community,

00:52:54.020 --> 00:52:55.847
we've had a good relationship, we have--

00:52:55.847 --> 00:52:57.205
<v Mr. Strauss>That's all right, I think, thank you,</v>

00:52:57.205 --> 00:52:58.209
I think that answers the question.

00:52:58.209 --> 00:52:59.274
<v ->Okay.</v>

00:52:59.274 --> 00:53:02.000
<v ->And then, I'd guess it'd to be fair to say,</v>

00:53:02.000 --> 00:53:03.455
have you had any meetings then?

00:53:03.455 --> 00:53:07.164
That address managing risk of other areas been overlooked

00:53:07.164 --> 00:53:08.260
that are not safety?

00:53:08.260 --> 00:53:11.417
<v ->I've had several meetings with our customer group,</v>

00:53:11.417 --> 00:53:14.863
about a number of different constituencies,

00:53:14.863 --> 00:53:17.375
and how we might, not only continue to serve them,

00:53:17.375 --> 00:53:19.162
but to serve them better.

00:53:19.162 --> 00:53:21.935
I've also had a number of visits with customers,

00:53:21.935 --> 00:53:25.292
in the field, particularly those

00:53:25.292 --> 00:53:29.475
who were impacted by PSPS, to get a better understanding of

00:53:29.475 --> 00:53:32.082
how we could accommodate their needs,

00:53:32.082 --> 00:53:33.952
and will continue to do that,

00:53:33.952 --> 00:53:37.333
I think that's an important part of the boards role.

00:53:37.333 --> 00:53:40.085
<v ->Okay, and then can I draw your attention</v>

00:53:40.085 --> 00:53:43.502
to the skills matrix on four 11, four 12?

00:53:50.258 --> 00:53:51.927
Let me know when you're ready.
<v ->I'm there.</v>

00:53:51.927 --> 00:53:53.649
<v ->Thank you.</v>

00:53:53.649 --> 00:53:58.649
The skills matrix includes a long list of important skills,

00:53:59.357 --> 00:54:01.051
one of them I see, for instance,

00:54:01.051 --> 00:54:05.192
is large-scale customer experience, but I don't see anything

00:54:05.192 --> 00:54:07.559
to do with small business customer experience,

00:54:07.559 --> 00:54:09.588
is that correct?

00:54:09.588 --> 00:54:13.461
<v ->That is correct, but let me suggest this,</v>

00:54:13.461 --> 00:54:16.000
by large-scale customer experience,

00:54:16.000 --> 00:54:18.099
and we may have been inarticulate,

00:54:18.099 --> 00:54:21.419
this is a work in progress, I think we meant

00:54:21.419 --> 00:54:25.502
was a customer, major customer facing experience,

00:54:26.605 --> 00:54:28.898
could be small business,

00:54:28.898 --> 00:54:30.887
could be the big industrials

00:54:30.887 --> 00:54:33.166
that are also represented here.

00:54:33.166 --> 00:54:35.424
We have customers of all sizes,

00:54:35.424 --> 00:54:39.124
I was a small business lender, we were number one SBA

00:54:39.124 --> 00:54:43.068
lenders in our region for the 10 years I was at the bank,

00:54:43.068 --> 00:54:44.474
I'm a small business owner,

00:54:44.474 --> 00:54:47.217
so I can appreciate the perspective of how important,

00:54:47.217 --> 00:54:51.150
and often neglected, the small business community is.

00:54:51.150 --> 00:54:56.150
<v ->So with that perspective, I have heard that the change in</v>

00:54:56.262 --> 00:54:59.168
the board constituency may have been between 70

00:54:59.168 --> 00:55:04.168
to 80% over last few years, would you know if the board

00:55:04.286 --> 00:55:06.726
leveled experience, with respect small businesses,

00:55:06.726 --> 00:55:10.545
has increased, or decreased, or stay the same?

00:55:10.545 --> 00:55:13.041
<v ->I'd be happy to get back to you with that,</v>

00:55:13.041 --> 00:55:16.078
I don't have the answer, I haven't really looked at the

00:55:16.078 --> 00:55:21.015
skills matrix, or the experiences of the previous board.

00:55:21.015 --> 00:55:23.358
<v Mr. Strauss>Okay, I'm going to turn now to a question</v>

00:55:23.358 --> 00:55:27.108
that was asked by Mr. Abrams, to Mr. Johnson,

00:55:28.499 --> 00:55:31.035
and I'll read it from the transcript,

00:55:31.035 --> 00:55:34.657
my question isn't about you're familiar with the transcript,

00:55:34.657 --> 00:55:36.390
but I think it'll help set the right tone.

00:55:36.390 --> 00:55:37.223
<v ->Okay.</v>

00:55:37.223 --> 00:55:39.616
<v ->And the question is, "Are there skills that you feel",</v>

00:55:39.616 --> 00:55:41.192
this the question from Mr. Abrams,

00:55:41.192 --> 00:55:43.267
"Are there skills that you feel, are not as well"

00:55:43.267 --> 00:55:46.516
"represented on the board, that you think should be there",

00:55:46.516 --> 00:55:49.466
and Mr. Johnsons answer was "That's a good question,"

00:55:49.466 --> 00:55:51.738
"I'm not going to answer it, my answer is"

00:55:51.738 --> 00:55:54.600
"that chair, nor Brownell will be available",

00:55:54.600 --> 00:55:56.537
now would you like answer that question?

00:55:56.537 --> 00:55:57.767
<v ->Sure.</v>

00:55:57.767 --> 00:56:00.092
I think we've added several,

00:56:00.092 --> 00:56:03.675
we've added wildfire experience mitigation,

00:56:04.957 --> 00:56:09.172
we actually added in the past, the customer experience,

00:56:09.172 --> 00:56:11.755
we've added network experience,

00:56:12.867 --> 00:56:17.867
which is how we got Bill Smith from former AT&amp;T executive,

00:56:18.451 --> 00:56:22.832
I think customer experience, as I said, and we've also

00:56:22.832 --> 00:56:25.633
added experience with labor relations.

00:56:25.633 --> 00:56:27.711
<v Mr. Strauss>So in the interest of time however,</v>

00:56:27.711 --> 00:56:30.060
the question though is, are there skills that are not

00:56:30.060 --> 00:56:32.560
well represented on the board?

00:56:33.449 --> 00:56:36.961
<v ->Yes I actually think that, well we have some</v>

00:56:36.961 --> 00:56:40.554
restructuring experts who've made a huge contribution,

00:56:40.554 --> 00:56:43.321
we're moving when we emerge, into a period

00:56:43.321 --> 00:56:45.617
where we need someone who's lead a major,

00:56:45.617 --> 00:56:49.950
major transformational experience, whether it was in

00:56:51.021 --> 00:56:53.311
industry changed by technology,

00:56:53.311 --> 00:56:56.837
whether it was an IT turn around, I really think we're gonna

00:56:56.837 --> 00:56:59.345
need that experience going forward.

00:56:59.345 --> 00:57:00.748
<v ->Well, I appreciate that response,</v>

00:57:00.748 --> 00:57:03.281
but leads me to my next question, which is about

00:57:03.281 --> 00:57:05.817
the change and responsibility of shift responsibility,

00:57:05.817 --> 00:57:09.200
from the public policy committee, to the SnO committee.

00:57:09.200 --> 00:57:10.744
Now I see that a lot of added

00:57:10.744 --> 00:57:12.351
responsibilities being shifted,

00:57:12.351 --> 00:57:16.072
wildfire and PSPS events in particular,

00:57:16.072 --> 00:57:18.581
how is that being managed with the

00:57:18.581 --> 00:57:23.581
load of responsibility already existed in the SnO committee?

00:57:24.013 --> 00:57:25.407
<v ->Is your question, are they resourced?</v>

00:57:25.407 --> 00:57:27.021
Are they well enough resourced to handle this?

00:57:27.021 --> 00:57:27.854
<v ->For instance.</v>

00:57:27.854 --> 00:57:28.687
<v ->Yes.</v>

00:57:28.687 --> 00:57:31.623
We'll certainly make sure first of all,

00:57:31.623 --> 00:57:36.427
CPP, Snow, and Audit actually, have all worked very closely

00:57:36.427 --> 00:57:38.197
together, all of the committees have,

00:57:38.197 --> 00:57:41.854
but those three particularly, so the transition

00:57:41.854 --> 00:57:45.302
will be orderly, with the identification

00:57:45.302 --> 00:57:48.381
now that CPP has had some experience of

00:57:48.381 --> 00:57:50.120
the kinds of resources they need,

00:57:50.120 --> 00:57:53.542
the kinds of focus they need to have,

00:57:53.542 --> 00:57:56.434
any additional support they may need,

00:57:56.434 --> 00:57:58.680
either internally or externally.

00:57:58.680 --> 00:58:01.981
<v Judge>what does CPP stand for?</v>

00:58:01.981 --> 00:58:05.042
<v ->Compliance and Public Policy, thank you,</v>

00:58:05.042 --> 00:58:07.671
think I'm gonna get that right.

00:58:07.671 --> 00:58:09.724
Who've also began a really important initiative,

00:58:09.724 --> 00:58:11.748
I can talk about later.

00:58:11.748 --> 00:58:14.665
<v ->And then, along those same lines,</v>

00:58:16.212 --> 00:58:20.011
we heard from Mr. Vize about the importance,

00:58:20.011 --> 00:58:21.718
with respect to safety, of certain types of

00:58:21.718 --> 00:58:24.657
compliance reporting, and certain types of recordkeeping,

00:58:24.657 --> 00:58:26.844
how do you disentangle the roles,

00:58:26.844 --> 00:58:30.672
and keep those clear between the compliance side,

00:58:30.672 --> 00:58:33.074
which I actually still understand is still on

00:58:33.074 --> 00:58:34.629
the Compliance and Public Policy Committee

00:58:34.629 --> 00:58:37.229
and the SnO committees responsibilities?

00:58:37.229 --> 00:58:40.117
<v ->I think we're in this, I hope it's responsive</v>

00:58:40.117 --> 00:58:43.567
to your question, we're developing a matrix,

00:58:43.567 --> 00:58:47.479
the beginning of which, it's just in its infancy,

00:58:47.479 --> 00:58:50.146
is in, under 33 of the exhibits,

00:58:51.279 --> 00:58:53.798
and that is to keep a running tab

00:58:53.798 --> 00:58:56.269
on all of the commitments that we have either,

00:58:56.269 --> 00:59:00.789
made through settlements, through regulatory changes,

00:59:00.789 --> 00:59:04.225
through judicial orders, to make sure that we're

00:59:04.225 --> 00:59:08.360
tracking those, and there may be overlap with safety,

00:59:08.360 --> 00:59:09.999
and other kinds of compliance.

00:59:09.999 --> 00:59:14.063
So again, we wanna make sure that everyone,

00:59:14.063 --> 00:59:17.595
the Commission, intervenors, employees,

00:59:17.595 --> 00:59:19.704
everyone understands the commitments we've made,

00:59:19.704 --> 00:59:21.542
so we can hold ourselves accountable,

00:59:21.542 --> 00:59:24.434
but also, and I think this is very important

00:59:24.434 --> 00:59:27.235
when you're making rules and commitments,

00:59:27.235 --> 00:59:30.247
are those rules and commitments

00:59:30.247 --> 00:59:32.566
achieving the desired outcome?

00:59:32.566 --> 00:59:35.622
I've been involved in transformations and rule making

00:59:35.622 --> 00:59:38.439
for a long time, and I know that at the FERC

00:59:38.439 --> 00:59:41.693
we made a lot of market rules that we realized,

00:59:41.693 --> 00:59:44.409
we're not as effective as we wanted them to be

00:59:44.409 --> 00:59:46.966
in changing behaviors in the marketplace.

00:59:46.966 --> 00:59:50.239
So I think this will be a course of

00:59:50.239 --> 00:59:53.880
cross-functional information and tracking,

00:59:53.880 --> 00:59:56.350
again those committees work very closely together,

00:59:56.350 --> 00:59:59.388
and will continue to do so for the foreseeable future.

00:59:59.388 --> 01:00:01.152
<v Mr. Strauss>And then to avoid</v>

01:00:01.152 --> 01:00:03.997
the risk of anything falling between the cracks,

01:00:03.997 --> 01:00:06.924
what process or procedure do you expect to have in place,

01:00:06.924 --> 01:00:08.634
to do that?

01:00:08.634 --> 01:00:13.217
<v ->Again, we're collectively working within the company,</v>

01:00:14.821 --> 01:00:16.949
to gather in one place,

01:00:16.949 --> 01:00:19.160
everything that we have committed to.

01:00:19.160 --> 01:00:23.550
So I met for the other day, with the compliance folks

01:00:23.550 --> 01:00:27.197
from a number of different parts of the company,

01:00:27.197 --> 01:00:32.135
to get this project, let's say, moving a little faster

01:00:32.135 --> 01:00:35.466
than it has been, and we'll do a regular review at that,

01:00:35.466 --> 01:00:38.330
at the board meetings, to make sure we're keeping track,

01:00:38.330 --> 01:00:43.330
we'll also build a database that will be able to be updated

01:00:43.413 --> 01:00:47.197
and corrected, if any, it should've been needed.

01:00:47.197 --> 01:00:49.028
<v Mr. Strauss>Okay, I just have a couple more questions.</v>

01:00:49.028 --> 01:00:49.861
<v ->Sure.</v>

01:00:49.861 --> 01:00:51.870
<v ->One of them is to do with, I think something that also</v>

01:00:51.870 --> 01:00:54.453
Mr. Long raised, which is that,

01:00:56.706 --> 01:01:00.134
while the shareholders can move on, the customers,

01:01:00.134 --> 01:01:04.483
given it's a utility monopoly, are here for the long run.

01:01:04.483 --> 01:01:07.481
Is there anything in place that ensures

01:01:07.481 --> 01:01:10.365
that the safety commitments are being made now,

01:01:10.365 --> 01:01:12.948
won't be changed in the future?

01:01:14.332 --> 01:01:17.779
<v ->Well, I think once you've committed,</v>

01:01:17.779 --> 01:01:21.568
been ordered by a judge, or a regulator,

01:01:21.568 --> 01:01:25.186
or committed in a settlement, and there will now be

01:01:25.186 --> 01:01:29.617
a public document that we can all agree on, and track,

01:01:29.617 --> 01:01:34.012
it would be very difficult without giving some justification

01:01:34.012 --> 01:01:38.203
to either change, which you couldn't arbitrary do,

01:01:38.203 --> 01:01:42.001
nor would you want to, you might in collaboration

01:01:42.001 --> 01:01:43.885
with others, like the Commission,

01:01:43.885 --> 01:01:47.515
say we think this would be a better way to go about that.

01:01:47.515 --> 01:01:50.069
<v ->But in terms of mechanisms, and not any mechanism</v>

01:01:50.069 --> 01:01:51.385
proposed to be in place,

01:01:51.385 --> 01:01:54.385
to give a priority to these changes?

01:01:55.742 --> 01:01:59.708
<v ->I don't know what mechanism might be better</v>

01:01:59.708 --> 01:02:02.419
than having an ongoing living document,

01:02:02.419 --> 01:02:07.060
that is reviewed by the board, and the management.

01:02:07.060 --> 01:02:07.893
I'm not sure what--

01:02:07.893 --> 01:02:09.913
<v Mr. Strauss>I'm sorry what is that document?</v>

01:02:09.913 --> 01:02:12.714
<v ->It's a document, it's in tab 23, we've just,</v>

01:02:12.714 --> 01:02:14.908
we're just developing it, because I said

01:02:14.908 --> 01:02:17.341
"I'd like a list of all the commitments"

01:02:17.341 --> 01:02:20.446
"that we have either made voluntarily in a settlement,"

01:02:20.446 --> 01:02:22.717
"have been ordered by the Commission,"

01:02:22.717 --> 01:02:24.998
"have been legislated, or have been ordered"

01:02:24.998 --> 01:02:27.949
"as part of a judicial proceeding, I want them all"

01:02:27.949 --> 01:02:31.622
"in one place, I want to understand who owns"

01:02:31.622 --> 01:02:33.919
"that particular obligation",

01:02:33.919 --> 01:02:36.643
so that's a tool of accountability

01:02:36.643 --> 01:02:39.439
that we've imposed in a number of areas,

01:02:39.439 --> 01:02:43.325
including some audit issues, so we have an owner,

01:02:43.325 --> 01:02:46.304
we have the cost, we have the obligation,

01:02:46.304 --> 01:02:48.391
and we'll begin to track about

01:02:48.391 --> 01:02:50.601
what problem that is beginning to serve.

01:02:50.601 --> 01:02:52.452
It is not a document that is

01:02:52.452 --> 01:02:55.585
by any stretch of the imagination complete,

01:02:55.585 --> 01:02:58.774
but that will be, allow everyone, and we'll certainly

01:02:58.774 --> 01:03:03.774
make that public, when we're confident that it's accurate,

01:03:04.279 --> 01:03:06.003
and it will be updated in public,

01:03:06.003 --> 01:03:07.767
and I think that there's no better way

01:03:07.767 --> 01:03:09.974
to hold people accountable than a little sunshine

01:03:09.974 --> 01:03:11.764
on what you've committed to.

01:03:11.764 --> 01:03:12.909
<v ->And so then you envisioned that</v>

01:03:12.909 --> 01:03:17.229
this process will develop actual specific commitments?

01:03:17.229 --> 01:03:20.176
<v ->This is a list of commitments we have made.</v>

01:03:20.176 --> 01:03:22.368
<v ->And the commitments will be in what form?</v>

01:03:22.368 --> 01:03:23.829
And what document for instance?

01:03:23.829 --> 01:03:24.787
Will the commitments be located--

01:03:24.787 --> 01:03:26.225
<v Judge>Can I interject here,</v>

01:03:26.225 --> 01:03:30.078
it looks to me like what the tab 23, that Ms. Brownell

01:03:30.078 --> 01:03:34.411
is referring to is in PG&amp;E-six, and it's 4-EXH.23-1,

01:03:39.627 --> 01:03:41.770
and till the end of that section.

01:03:41.770 --> 01:03:44.084
So it's in PG&amp;E six.

01:03:44.084 --> 01:03:44.917
<v ->But I would--</v>

01:03:44.917 --> 01:03:46.955
<v Judge>It's tab 23rd, sixth of the 25th.</v>

01:03:46.955 --> 01:03:48.394
<v ->Tab 23, you're a better woman than I.</v>

01:03:48.394 --> 01:03:49.556
<v ->Thank you your honor.</v>
<v ->I wouldn't of found it.</v>

01:03:49.556 --> 01:03:50.885
But I wanna say it's--
<v ->But if--</v>

01:03:50.885 --> 01:03:53.426
<v ->In its infancy, so I don't want to give this out,</v>

01:03:53.426 --> 01:03:55.303
as a finished and complete document,

01:03:55.303 --> 01:03:58.220
this is the beginning of our desire

01:03:59.402 --> 01:04:03.136
to have a tracking mechanism, so that we can hold

01:04:03.136 --> 01:04:06.491
ourselves accountable, but we can also measure outcomes,

01:04:06.491 --> 01:04:10.090
we've talked a lot about outcomes in various hearings here

01:04:10.090 --> 01:04:12.612
at the Commission, and I think that's important.

01:04:12.612 --> 01:04:14.750
<v Mr. Strauss>And what I'd like to point out is,</v>

01:04:14.750 --> 01:04:18.056
that this process doesn't inherently establish

01:04:18.056 --> 01:04:21.370
any document, that will identify what the

01:04:21.370 --> 01:04:23.743
commitment is, it makes a determination,

01:04:23.743 --> 01:04:26.047
as I understand it, the Commission make the

01:04:26.047 --> 01:04:29.464
determination that PG&amp;E is in compliance,

01:04:30.636 --> 01:04:32.276
but what it sounds like you're saying, is that it's

01:04:32.276 --> 01:04:35.543
going to be in a document that'll identify those

01:04:35.543 --> 01:04:39.194
responsibilities it's undertaking to maintain compliance,

01:04:39.194 --> 01:04:41.352
and to maintain organizational structure,

01:04:41.352 --> 01:04:43.343
that priorities safety.

01:04:43.343 --> 01:04:44.535
<v ->That is correct.</v>

01:04:44.535 --> 01:04:47.061
<v Attorney>I object to form of the question,</v>

01:04:47.061 --> 01:04:48.960
at least I'm getting very confused about

01:04:48.960 --> 01:04:51.825
what kinds of commitments we're talking about.

01:04:51.825 --> 01:04:52.910
<v Judge>I think we should move on from this</v>

01:04:52.910 --> 01:04:54.174
line of questioning.

01:04:54.174 --> 01:04:57.103
I think she has described the document

01:04:57.103 --> 01:05:01.466
as an infant document, and you can ask a more

01:05:01.466 --> 01:05:04.979
specific question, it's a little bit vague as well.

01:05:04.979 --> 01:05:09.562
<v ->Okay, and then my last question's respect to Ms. Cain</v>

01:05:12.029 --> 01:05:15.685
and her role, and what processes are in place to ensure

01:05:15.685 --> 01:05:19.768
that the person in that role has, is independent,

01:05:21.759 --> 01:05:26.259
there's not interference with the reporting processes?

01:05:28.317 --> 01:05:32.567
<v ->I think she's established as reporting regularly,</v>

01:05:34.901 --> 01:05:38.207
to both the board, and she's in our board meetings,

01:05:38.207 --> 01:05:39.874
and the committee's.

01:05:40.934 --> 01:05:44.934
Her job description in and of itself, I suspect,

01:05:46.662 --> 01:05:49.732
will describe the need for independence.

01:05:49.732 --> 01:05:54.173
The fact that she is a regular part of discussions,

01:05:54.173 --> 01:05:57.659
and the head of CPP particularly, and Snow meet with her

01:05:57.659 --> 01:06:01.576
regular, without any interference from anybody,

01:06:04.862 --> 01:06:08.006
I think suggest that, that process is already in place.

01:06:08.006 --> 01:06:10.292
<v ->And so my last thing, fault is mine,</v>

01:06:10.292 --> 01:06:11.741
my actual last question now.

01:06:11.741 --> 01:06:13.676
For follow-up, and so that the deputy general

01:06:13.676 --> 01:06:18.676
counsel designation, what is reporting role in that fashion?

01:06:21.246 --> 01:06:23.124
<v ->I'm honestly not sure I understand the question.</v>

01:06:23.124 --> 01:06:26.297
<v ->So the term, I see that the title here, chief ethics</v>

01:06:26.297 --> 01:06:31.297
and compliance officer, and the deputy general counsel.

01:06:31.514 --> 01:06:33.465
I think I understand what chief ethics and compliance

01:06:33.465 --> 01:06:36.252
officer means, I assume,

01:06:36.252 --> 01:06:38.307
I'm sure there's a general counsel.

01:06:38.307 --> 01:06:40.983
<v ->There is a general counsel.</v>
<v ->What does it mean</v>

01:06:40.983 --> 01:06:45.316
that this person is also the deputy general counsel?

01:06:46.476 --> 01:06:49.964
<v ->It means that she has the authority of compliance</v>

01:06:49.964 --> 01:06:52.294
and ethics, and reports in the law department,

01:06:52.294 --> 01:06:55.962
because this is a legal issue, in a legal position.

01:06:55.962 --> 01:06:58.496
<v ->And would she then report to the general counsel?</v>

01:06:58.496 --> 01:07:01.115
<v ->She would report to the general counsel.</v>

01:07:01.115 --> 01:07:03.426
<v ->Okay, thank you.</v>

01:07:03.426 --> 01:07:04.259
That is all.

01:07:04.259 --> 01:07:05.298
<v ->Thank you.</v>

01:07:05.298 --> 01:07:07.298
Let's be off the record.

01:07:09.467 --> 01:07:14.148
Okay, at this time we'll take a five minute break,

01:07:14.148 --> 01:07:17.264
and then we'll come back and go into cross examination

01:07:17.264 --> 01:07:18.794
by Mr. Abrams.

01:07:18.794 --> 01:07:23.377
Okay so, on your smarts phones, please be back at 3:12.

01:07:24.961 --> 01:07:27.211
(laughing)

01:07:36.919 --> 01:07:40.025
It's 3:12, and Mr. Abrams is not back yet,

01:07:40.025 --> 01:07:44.392
but we can actually dispose of a few things.

01:07:44.392 --> 01:07:46.117
Are you going to have any redirect for the things

01:07:46.117 --> 01:07:47.371
that have occurred already?

01:07:47.371 --> 01:07:48.204
<v Man>Not so far.</v>

01:07:48.204 --> 01:07:49.787
<v ->Not so far, okay.</v>

01:07:51.064 --> 01:07:51.897
Great.

01:07:55.957 --> 01:07:57.290
Then let's go to

01:08:01.196 --> 01:08:05.580
the matter of order for when Ms. Hogle is up

01:08:05.580 --> 01:08:06.413
We have...

01:08:55.155 --> 01:08:56.998
Be back on the record.

01:08:56.998 --> 01:08:59.013
At this time we'll turn to cross examination

01:08:59.013 --> 01:09:00.180
by Mr. Abrams.

01:09:03.453 --> 01:09:04.870
<v ->Good afternoon.</v>

01:09:06.469 --> 01:09:09.801
I wanna start with picking up where some

01:09:09.801 --> 01:09:12.374
of the other questions left off.

01:09:12.374 --> 01:09:14.378
Specifically around

01:09:14.378 --> 01:09:17.295
where the interests of shareholders

01:09:18.171 --> 01:09:21.338
and the interest of customers diverge.

01:09:24.119 --> 01:09:26.202
I am a wildfire survivor,

01:09:29.526 --> 01:09:32.609
as they call in bankruptcy, a victim.

01:09:34.706 --> 01:09:38.348
Would you agree that victims interest as customers,

01:09:38.348 --> 01:09:43.098
have largely diverged from the interests of shareholders?

01:09:45.281 --> 01:09:47.448
<v ->First of all, let me say</v>

01:09:48.418 --> 01:09:50.756
I know what you survived and it's been horrific,

01:09:50.756 --> 01:09:52.423
and I can't imagine.

01:09:53.439 --> 01:09:57.689
But no I don't actually see where they've diverged.

01:09:58.868 --> 01:10:02.254
Maybe you could be more specific in an example?

01:10:02.254 --> 01:10:03.087
<v ->Sure.</v>

01:10:06.452 --> 01:10:09.085
Yeah and I'll move on and I think

01:10:09.085 --> 01:10:12.458
I'll try to illustrate that in question

01:10:12.458 --> 01:10:14.208
as I go through here.

01:10:15.472 --> 01:10:19.404
Do you see tying investor return, more specifically

01:10:19.404 --> 01:10:22.237
to safety, as a goal of the board?

01:10:23.950 --> 01:10:28.950
<v ->As I've said I think there are a number of underlying</v>

01:10:29.222 --> 01:10:33.761
factors in the financial success of a company,

01:10:33.761 --> 01:10:36.844
and its ability, to pay shareholders,

01:10:39.498 --> 01:10:43.725
and safety is first and foremost among them

01:10:43.725 --> 01:10:47.428
for a utility, frankly should be for any company,

01:10:47.428 --> 01:10:50.304
but specifically for utility.

01:10:50.304 --> 01:10:51.996
So I think they are tied together,

01:10:51.996 --> 01:10:54.765
because an unsafe company,

01:10:54.765 --> 01:10:58.022
and as this company has experienced,

01:10:58.022 --> 01:11:00.522
is unable to pay shareholders.

01:11:06.907 --> 01:11:10.490
<v ->So since the bankruptcy occurred in 2000,</v>

01:11:13.995 --> 01:11:17.951
have you provided payments to shareholders?

01:11:17.951 --> 01:11:21.251
<v ->We have at the low end of the utility spectrum.</v>

01:11:21.251 --> 01:11:23.834
I looked at a couple weeks ago.

01:11:26.172 --> 01:11:30.730
<v ->Do you not agree that the deferred maintenance</v>

01:11:30.730 --> 01:11:32.980
across your infrastructure,

01:11:34.575 --> 01:11:35.992
has not occurred?

01:11:36.954 --> 01:11:38.288
<v ->I believe there's--</v>
<v Attorney>I'm sorry.</v>

01:11:38.288 --> 01:11:39.588
I object to the form of the question,

01:11:39.588 --> 01:11:41.921
I got lost in the negatives.

01:11:43.235 --> 01:11:44.699
<v Judge>I did to, to be honest.</v>

01:11:44.699 --> 01:11:45.580
(laughing)
<v ->Okay.</v>

01:11:45.580 --> 01:11:48.913
I'll rephrase the question, I apologize.

01:11:50.397 --> 01:11:54.108
Deferred maintenance, do you believe

01:11:54.108 --> 01:11:58.173
that deferred maintenance across the infrastructure

01:11:58.173 --> 01:11:59.256
has occurred?

01:12:00.801 --> 01:12:03.019
<v ->I think there a number of issues that have affected</v>

01:12:03.019 --> 01:12:06.305
the safety performance of this company,

01:12:06.305 --> 01:12:08.775
it is certainly been found

01:12:08.775 --> 01:12:12.300
that deferred maintenance, vegetation management,

01:12:12.300 --> 01:12:15.871
as well as dramatically different climate conditions,

01:12:15.871 --> 01:12:18.371
have affected the performance.

01:12:19.623 --> 01:12:20.456
<v ->Okay.</v>

01:12:21.331 --> 01:12:23.070
With all due respect I'm asking your opinion,

01:12:23.070 --> 01:12:25.549
I know that, that's what's been found.

01:12:25.549 --> 01:12:29.279
I'm asking do you agree that differed maintenance,

01:12:29.279 --> 01:12:33.165
across the infrastructure, has occurred?

01:12:33.165 --> 01:12:37.248
<v ->I agree that it has in some instances occurred.</v>

01:12:38.693 --> 01:12:39.526
<v ->Okay.</v>

01:12:40.442 --> 01:12:43.812
Do you not see that as evidence,

01:12:43.812 --> 01:12:48.186
that investor interests in short-term yield

01:12:48.186 --> 01:12:52.755
has been provided, without putting those investments

01:12:52.755 --> 01:12:54.755
into the infrastructure?

01:12:57.608 --> 01:13:00.796
<v ->I actually can't say that conclusively.</v>

01:13:00.796 --> 01:13:04.189
I think among the issues that I see

01:13:04.189 --> 01:13:06.439
are inadequate inspections,

01:13:08.874 --> 01:13:12.041
for example we now know, and are using

01:13:12.939 --> 01:13:17.640
more extensively, technology to inspect our infrastructure,

01:13:17.640 --> 01:13:22.640
some of the visual inspections simply were not adequate

01:13:22.933 --> 01:13:26.049
to determine the actual condition.

01:13:26.049 --> 01:13:28.116
So we're making changes in response to that--

01:13:28.116 --> 01:13:30.360
<v ->I appreciate that, I'm not asking about</v>

01:13:30.360 --> 01:13:33.480
inspections right now, if I can,

01:13:33.480 --> 01:13:36.994
I'm just asking about a very specific thing.

01:13:36.994 --> 01:13:38.842
You've got, let me rephrase,

01:13:38.842 --> 01:13:40.003
'cause I know--
<v ->okay.</v>

01:13:40.003 --> 01:13:41.950
A part of it may be how I'm asking the question,

01:13:41.950 --> 01:13:44.281
and I'm not an attorney, I'm not used to this.

01:13:44.281 --> 01:13:45.753
<v ->Neither am I, and nor am I.</v>

01:13:45.753 --> 01:13:47.379
<v ->All right.</v>

01:13:47.379 --> 01:13:50.046
So basically what I'm asking is,

01:13:51.412 --> 01:13:55.579
there is a million dollars that the company, PG&amp;E,

01:13:57.691 --> 01:14:02.191
can do with, they can either choose to put all or some

01:14:06.072 --> 01:14:11.072
as a return to their investors, or they can put all or some

01:14:11.279 --> 01:14:15.612
into replacing sea hooks, or putting in more covered

01:14:17.510 --> 01:14:21.010
conductors, and you not see that sometimes

01:14:23.148 --> 01:14:26.315
those trade-offs could be compromised?

01:14:27.646 --> 01:14:31.063
And do you not see that, that was part of

01:14:32.971 --> 01:14:37.638
the contributing factors to the current state of things?

01:14:39.661 --> 01:14:41.360
<v ->We're gonna try and answer your question,</v>

01:14:41.360 --> 01:14:44.693
because it's more complicated than that.

01:14:45.634 --> 01:14:49.051
I have not seen evidence that trade-offs,

01:14:50.516 --> 01:14:53.196
as you suggest, to pay investors,

01:14:53.196 --> 01:14:58.029
over investing in infrastructure, or safety have occurred.

01:15:00.814 --> 01:15:04.314
But let's consider that the utility model,

01:15:05.833 --> 01:15:10.290
in this country, and others, was developed to attract

01:15:10.290 --> 01:15:13.112
long-term inexpensive capital.

01:15:13.112 --> 01:15:17.598
In order to continue to do that, companies pay dividends,

01:15:17.598 --> 01:15:21.666
as I said this company, relative to its utility peers,

01:15:21.666 --> 01:15:24.083
has paid for quite some time,

01:15:25.015 --> 01:15:30.015
at the low end of the spectrum, now is not paying at all.

01:15:30.197 --> 01:15:34.030
What I see is not merely deferred maintenance,

01:15:36.960 --> 01:15:41.793
but inadequate maintenance, that is not necessarily driven

01:15:43.463 --> 01:15:46.963
by a willingness to invest, or not invest,

01:15:48.143 --> 01:15:52.015
it's driven by a number of factors in...

01:15:52.015 --> 01:15:53.796
I'll let, go ahead.

01:15:53.796 --> 01:15:55.864
<v ->I'm sorry, I appreciate that,</v>

01:15:55.864 --> 01:15:58.017
I know there's lots of factors,

01:15:58.017 --> 01:16:01.500
again I'm just trying to focus on this one factor,

01:16:01.500 --> 01:16:05.417
which is clearly, I think, and you have stated,

01:16:08.954 --> 01:16:12.188
that deferred maintenance, is at least part of the equation.

01:16:12.188 --> 01:16:14.937
I'm not looking, I'm not saying it solves everything,

01:16:14.937 --> 01:16:18.916
'cause there are lots of other issues, what I'm asking is,

01:16:18.916 --> 01:16:21.651
is that not part of the issue?

01:16:21.651 --> 01:16:25.883
Is that, in some cases, investor interests,

01:16:25.883 --> 01:16:28.051
and as you said, attracting those investors,

01:16:28.051 --> 01:16:32.016
and keeping those investors, has been more of a priority

01:16:32.016 --> 01:16:34.828
than replacing the sea hooks that have failed,

01:16:34.828 --> 01:16:39.159
or jumpers that have failed, or all of the infrastructure

01:16:39.159 --> 01:16:44.159
that is related to failures, and fires, and loss of life,

01:16:44.716 --> 01:16:49.475
and loss of structures, that, that is not part of

01:16:49.475 --> 01:16:51.131
the problem of PG&amp;E?

01:16:51.131 --> 01:16:53.069
<v Attorney>Objection, asked and answered.</v>

01:16:53.069 --> 01:16:54.380
<v Judge>Agreed.</v>

01:16:54.380 --> 01:16:56.677
Please move on to the next question.

01:16:56.677 --> 01:16:58.260
<v ->I think it was...</v>

01:17:00.390 --> 01:17:02.307
(sigh)

01:17:03.883 --> 01:17:07.550
So part of what you stated earlier was that,

01:17:08.840 --> 01:17:12.238
the reason why shareholder interests,

01:17:12.238 --> 01:17:14.194
and the interests of customers are aligned,

01:17:14.194 --> 01:17:17.930
are because when there's a big fire

01:17:17.930 --> 01:17:21.930
those interests come together, do you not agree,

01:17:23.936 --> 01:17:26.904
and I appreciate that I'm also asking a double negative,

01:17:26.904 --> 01:17:30.651
do not agree that waiting for fires and penalties,

01:17:30.651 --> 01:17:35.568
has been ineffectual, in terms of creating change for PG&amp;E?

01:17:41.522 --> 01:17:44.855
<v ->I don't think PG&amp;E, nor its employees,</v>

01:17:45.759 --> 01:17:48.137
are waiting for fires.

01:17:48.137 --> 01:17:51.387
I don't think, I think one could argue,

01:17:53.797 --> 01:17:56.880
and it has been argued, that PG&amp;E was

01:18:01.615 --> 01:18:05.615
not as fast in responding to, what clearly were,

01:18:07.176 --> 01:18:09.781
the impacts of climate change.

01:18:09.781 --> 01:18:12.698
So I think they were slow to follow

01:18:14.621 --> 01:18:16.737
San Diego Gas and Electrics example,

01:18:16.737 --> 01:18:19.904
which is a really good one, and we've,

01:18:21.072 --> 01:18:24.433
I visited them, our employees have visited them,

01:18:24.433 --> 01:18:27.327
I think, but I think to suggest that anyone was

01:18:27.327 --> 01:18:30.494
waiting for a fire to change behavior,

01:18:31.522 --> 01:18:34.272
doesn't represent what I've seen.

01:18:36.205 --> 01:18:40.860
<v ->So when you describe that investor interests,</v>

01:18:40.860 --> 01:18:44.196
and customer interests are aligned,

01:18:44.196 --> 01:18:48.613
because fires, are something that is to the detriment

01:18:51.831 --> 01:18:55.998
of both investors, and customers, are there things

01:18:58.837 --> 01:19:03.004
that are more leading activities, that are aligned

01:19:04.282 --> 01:19:06.547
with those interests?

01:19:06.547 --> 01:19:09.449
Rather than the fires or the penalties?

01:19:09.449 --> 01:19:11.264
<v Attorney>Object to the form of the question.</v>

01:19:11.264 --> 01:19:13.423
<v ->I don't understand the question.</v>

01:19:13.423 --> 01:19:15.032
<v Judge>I don't think</v>

01:19:15.032 --> 01:19:16.182
I understand the question as well.

01:19:16.182 --> 01:19:17.427
<v Mr. Abrams>All right, I will rephrase.</v>

01:19:17.427 --> 01:19:18.930
<v Judge>Thank you.</v>

01:19:18.930 --> 01:19:23.730
<v ->My understanding, and you can correct me if I am wrong,</v>

01:19:23.730 --> 01:19:28.300
was that you described the interests of shareholders,

01:19:28.300 --> 01:19:31.787
and the interests of customers, as aligned,

01:19:31.787 --> 01:19:34.091
because both of them, of course,

01:19:34.091 --> 01:19:37.440
don't want to have fires occur.

01:19:37.440 --> 01:19:39.878
And what I'm asking are, what are the other ways,

01:19:39.878 --> 01:19:43.599
prior to those fires occurring, when you're coming to

01:19:43.599 --> 01:19:46.307
the dollars and cents of things,

01:19:46.307 --> 01:19:49.397
are those interests aligned through

01:19:49.397 --> 01:19:51.980
the actions of the corporation?

01:19:55.177 --> 01:19:57.131
<v ->I'm gonna give it a shot Mr. Abrams.</v>

01:19:57.131 --> 01:19:58.345
<v ->Thank you.</v>
<v ->But I'm still not sure</v>

01:19:58.345 --> 01:20:01.041
I understand.
<v ->All right.</v>

01:20:01.041 --> 01:20:03.124
<v ->Well managed companies,</v>

01:20:06.401 --> 01:20:07.568
have a greater

01:20:11.605 --> 01:20:15.438
likelihood of attracting financial investment,

01:20:19.881 --> 01:20:23.298
that only, that's certainly in this case,

01:20:25.308 --> 01:20:29.925
one of the things investors look at is our safety record,

01:20:29.925 --> 01:20:32.925
but well-managed companies also have

01:20:35.523 --> 01:20:38.935
strong performance in many ways,

01:20:38.935 --> 01:20:43.268
have clear transparent financials, have strong data,

01:20:47.171 --> 01:20:50.944
have good customer ratings, there are a lot of measures,

01:20:50.944 --> 01:20:55.361
all of which are important, and many of which concern

01:20:58.841 --> 01:21:03.758
customers, so I don't think, if I'm grasping your question,

01:21:10.563 --> 01:21:15.534
wildfires or safety issues are certainly the most paramount,

01:21:15.534 --> 01:21:19.077
and certainly the biggest commitment that we have,

01:21:19.077 --> 01:21:22.180
there are many things that can go wrong in a company.

01:21:22.180 --> 01:21:23.453
<v Mr. Abrams>So, thank you.</v>

01:21:23.453 --> 01:21:24.286
<v ->Does that--</v>

01:21:24.286 --> 01:21:25.119
<v Mr. Abrams>Yes.</v>

01:21:25.119 --> 01:21:26.136
<v ->Get there?</v>

01:21:26.136 --> 01:21:28.137
<v Mr. Abrams>I appreciate that.</v>

01:21:28.137 --> 01:21:29.565
Let me do a follow up.

01:21:29.565 --> 01:21:30.398
<v ->Okay.</v>

01:21:30.398 --> 01:21:34.922
<v ->So companies where there's is a competitive environment,</v>

01:21:34.922 --> 01:21:39.716
drives success, 'cause you wanna beat out your competition,

01:21:39.716 --> 01:21:44.383
in PG&amp;E, a monopoly, you can call it a natural monopoly,

01:21:46.479 --> 01:21:51.146
those competitive pressures don't exist, to that extent.

01:21:52.182 --> 01:21:56.015
How do you create the incentives for a company

01:21:58.514 --> 01:22:02.265
that doesn't have to innovate their sea hook,

01:22:02.265 --> 01:22:04.484
because if they don't do it their customer

01:22:04.484 --> 01:22:07.688
will beat them out, how do you provide incentives that,

01:22:07.688 --> 01:22:10.855
that becomes a priority, as opposed to

01:22:13.421 --> 01:22:18.162
what the incentives are in the competitive space?

01:22:18.162 --> 01:22:21.591
<v ->Well first of all, I'm a big believe in markets and,</v>

01:22:21.591 --> 01:22:25.315
but this is a natural monopoly, and the origin of

01:22:25.315 --> 01:22:28.398
the regulatory system in our country,

01:22:29.752 --> 01:22:34.252
is to superimpose that, would be competitive pressure,

01:22:38.385 --> 01:22:40.575
it's a challenge, having been a regulator,

01:22:40.575 --> 01:22:43.274
I can tell you, but the fact of the matter is,

01:22:43.274 --> 01:22:46.050
when you have natural monopolies that are so critical

01:22:46.050 --> 01:22:49.215
to communities, it's really important to have that

01:22:49.215 --> 01:22:52.823
regulatory compact, and that regulatory structure,

01:22:52.823 --> 01:22:57.099
but there are lots of ways, there are lots of ways

01:22:57.099 --> 01:23:00.618
that companies are incented to do the right thing,

01:23:00.618 --> 01:23:03.882
again I've spent time with our employees,

01:23:03.882 --> 01:23:08.770
and the pride that they take, in doing the job that they do,

01:23:08.770 --> 01:23:13.398
I think is commendable, particularly under the circumstances

01:23:13.398 --> 01:23:15.872
in which they've been operating,

01:23:15.872 --> 01:23:18.377
but I think it'd be who's the company

01:23:18.377 --> 01:23:20.432
to give adequate tools,

01:23:20.432 --> 01:23:23.694
adequate training, pay people for performance,

01:23:23.694 --> 01:23:26.986
make sure the metrics are clear, but also make sure

01:23:26.986 --> 01:23:29.476
the metrics are reasonable, if you have a

01:23:29.476 --> 01:23:33.225
limited amount of time to do an inspection,

01:23:33.225 --> 01:23:36.975
you might be a little more casual than you wanted to,

01:23:36.975 --> 01:23:40.642
any company, however has to allocate capital

01:23:42.044 --> 01:23:46.570
according to, what they determine, is its needs.

01:23:46.570 --> 01:23:48.996
One of the things we're working on is

01:23:48.996 --> 01:23:53.663
a better asset management understanding and better data,

01:23:55.228 --> 01:23:59.446
so we can manage those assets more carefully,

01:23:59.446 --> 01:24:02.030
and with a greater positive outcome

01:24:02.030 --> 01:24:04.428
for our safety record.

01:24:04.428 --> 01:24:08.021
<v Mr. Abrams>So, the allocation of capital to its needs,</v>

01:24:08.021 --> 01:24:12.604
and regulatory proxies for the competitive marketplace.

01:24:14.580 --> 01:24:16.436
<v ->Among others.</v>
<v Mr. Abrams>Among others.</v>

01:24:16.436 --> 01:24:17.385
<v ->Yep, I listed a lot.</v>

01:24:17.385 --> 01:24:20.468
<v ->But do you not see the part of what</v>

01:24:23.151 --> 01:24:26.864
could be done in this plan of reorganization,

01:24:26.864 --> 01:24:29.922
and the regulatory structure that could come out of it,

01:24:29.922 --> 01:24:34.254
is to tie more specific regulatory controls

01:24:34.254 --> 01:24:37.309
over the allocation of capital,

01:24:37.309 --> 01:24:40.142
so that the public can understand,

01:24:41.392 --> 01:24:44.559
and trust, that PG&amp;E is going to spend

01:24:45.438 --> 01:24:47.475
that allocated capital towards the things

01:24:47.475 --> 01:24:50.479
that are around our safety, as opposed to other areas

01:24:50.479 --> 01:24:55.315
that the business might want to put those resources towards?

01:24:55.315 --> 01:24:58.044
<v ->Well first of all, again, having been a regulator,</v>

01:24:58.044 --> 01:25:00.803
it puts the regulator in a tough position,

01:25:00.803 --> 01:25:04.721
you're asking them to effectively manage a company,

01:25:04.721 --> 01:25:08.431
and I'm not sure that's a role they would choose to,

01:25:08.431 --> 01:25:11.412
well I'm not sure that's a role that's appropriate,

01:25:11.412 --> 01:25:15.363
nor one that they would choose to play.

01:25:15.363 --> 01:25:19.866
A company can be held accountable for how it manages,

01:25:19.866 --> 01:25:21.965
and I think the Commission has done that,

01:25:21.965 --> 01:25:25.957
and continues to do that, as do others.

01:25:25.957 --> 01:25:30.624
So I think deciding how a company allocates its capital,

01:25:31.768 --> 01:25:35.305
is probably not the right answer, the right answer,

01:25:35.305 --> 01:25:38.967
is to have a management team in place,

01:25:38.967 --> 01:25:41.907
with well trained employees, who are incented

01:25:41.907 --> 01:25:45.882
to do the right thing, and I have never seen a decision

01:25:45.882 --> 01:25:50.299
in this company, where people purposely make a choice

01:25:51.466 --> 01:25:55.466
to put safety as a secondary commitment, I just,

01:25:58.266 --> 01:25:59.188
I haven't seen it.

01:25:59.188 --> 01:26:00.762
We may not have been artfully,

01:26:00.762 --> 01:26:03.021
we may not have been efficient, we may not have

01:26:03.021 --> 01:26:07.393
done as many things right as we would like,

01:26:07.393 --> 01:26:10.881
but the reality is, it is and will remain a priority.

01:26:10.881 --> 01:26:15.082
And our capital is allocated according to need,

01:26:15.082 --> 01:26:17.888
and there are asset management structures,

01:26:17.888 --> 01:26:20.197
again which we're trying to improve,

01:26:20.197 --> 01:26:24.315
to look at the fundamental components of our assets.

01:26:24.315 --> 01:26:25.523
<v Mr. Abrams>So are you not aware of the</v>

01:26:25.523 --> 01:26:28.152
falsification of documents that has occurred within PG&amp;E?

01:26:28.152 --> 01:26:31.569
<v ->I am aware of the falsification of documents.</v>

01:26:31.569 --> 01:26:32.630
<v ->So--</v>
<v ->Do I--</v>

01:26:32.630 --> 01:26:35.384
<v ->So was that intentional?</v>

01:26:35.384 --> 01:26:40.384
<v ->I wasn't, I can't, I cannot speak to what employees</v>

01:26:40.479 --> 01:26:42.646
choose to do or not to do.

01:26:43.607 --> 01:26:44.716
<v ->I thought you just?</v>

01:26:44.716 --> 01:26:48.131
Sorry, but I thought you just stated, for the record,

01:26:48.131 --> 01:26:50.521
that you are not aware of employees

01:26:50.521 --> 01:26:52.426
doing intentional things to the detriment

01:26:52.426 --> 01:26:54.445
of the company and safety?

01:26:54.445 --> 01:26:56.341
<v ->You're asking me to assign a motive.</v>

01:26:56.341 --> 01:26:59.374
I am aware that companies, that employees

01:26:59.374 --> 01:27:03.895
have falsified records, I'm absolutely aware of that.

01:27:03.895 --> 01:27:07.122
I cannot tell you what motivated them to do that.

01:27:07.122 --> 01:27:09.630
I thought you were suggesting motivation.

01:27:09.630 --> 01:27:14.160
<v ->So, through the investigations into those incidences,</v>

01:27:14.160 --> 01:27:17.241
as the chair of the board, what have you found

01:27:17.241 --> 01:27:20.408
as the motivations of those employees?

01:27:28.535 --> 01:27:30.035
<v ->I'm trying to...</v>

01:27:31.394 --> 01:27:35.644
There have been one incident since I've been there,

01:27:38.064 --> 01:27:41.529
and I can't tell you what the motivation was,

01:27:41.529 --> 01:27:42.588
I can't tell you.

01:27:42.588 --> 01:27:46.255
I think they were terminated, because we can

01:27:47.573 --> 01:27:49.203
only have zero tolerance

01:27:49.203 --> 01:27:52.899
for people who intentionally falsify records.

01:27:52.899 --> 01:27:54.324
Why they falsify records?

01:27:54.324 --> 01:27:55.741
I can't tell you.

01:27:59.633 --> 01:28:01.876
<v ->Do you not think it's the boards</v>

01:28:01.876 --> 01:28:06.376
responsibility to understand what might have motivated

01:28:07.572 --> 01:28:12.572
staff to falsify records, so it does not happen again?

01:28:12.775 --> 01:28:15.553
<v ->Absolutely, and I can answer that question.</v>

01:28:15.553 --> 01:28:20.377
So there are a variety of things that can motivate people

01:28:20.377 --> 01:28:23.927
to make the wrong choice, they felt under pressure,

01:28:23.927 --> 01:28:28.471
you had the wrong metrics, you didn't have the right tools,

01:28:28.471 --> 01:28:32.357
people didn't understand, it's a paper driven system,

01:28:32.357 --> 01:28:35.267
and people actually make mistakes--

01:28:35.267 --> 01:28:36.100
<v Mr. Abrams>I understand, sorry--</v>

01:28:36.100 --> 01:28:38.580
<v ->But I'm not a psychiatrist, so I can't tell you why</v>

01:28:38.580 --> 01:28:41.927
individuals choose to make the wrong choices.

01:28:41.927 --> 01:28:42.909
I just can't tell you that.

01:28:42.909 --> 01:28:46.433
<v ->Yeah, I know there's a whole host of reasons why that</v>

01:28:46.433 --> 01:28:51.033
could occur, but I also have worked for a lot of companies,

01:28:51.033 --> 01:28:53.036
and when there's a transgression like that,

01:28:53.036 --> 01:28:55.711
typically there's an investigation,

01:28:55.711 --> 01:28:58.591
and part of that investigation would should say,

01:28:58.591 --> 01:29:03.276
what motivated this so it doesn't happen again?

01:29:03.276 --> 01:29:06.245
And are you saying that nothing like that has occurred,

01:29:06.245 --> 01:29:08.612
or that the board thought to investigate?

01:29:08.612 --> 01:29:11.126
Not in general all the plethora of things,

01:29:11.126 --> 01:29:13.537
or become a psychiatrist, and try to understand

01:29:13.537 --> 01:29:15.711
what was in people's heads,

01:29:15.711 --> 01:29:18.792
but clearly there is some evidence that you could look to,

01:29:18.792 --> 01:29:22.413
to understand what drove that activity,

01:29:22.413 --> 01:29:24.880
so you could ensure that it doesn't happen again,

01:29:24.880 --> 01:29:27.659
doesn't that make sense and fit within

01:29:27.659 --> 01:29:28.917
the purview of the board?

01:29:28.917 --> 01:29:31.306
<v ->It does and perhaps I was not clear.</v>

01:29:31.306 --> 01:29:34.900
In every instance, there is an investigation,

01:29:34.900 --> 01:29:37.278
in absolutely every incident.

01:29:37.278 --> 01:29:41.972
In every investigation, there is an attempt to determine

01:29:41.972 --> 01:29:43.601
why people did what they did,

01:29:43.601 --> 01:29:46.042
and I've given you the various reasons,

01:29:46.042 --> 01:29:46.928
that people do those things.
<v ->But in this case</v>

01:29:46.928 --> 01:29:48.817
(mumbles) general.
<v Attorney>Can you--</v>

01:29:48.817 --> 01:29:51.913
<v Judge>You can't talk over one another.</v>

01:29:51.913 --> 01:29:52.845
<v ->I apologize.</v>

01:29:52.845 --> 01:29:54.164
<v Judge>Okay.</v>

01:29:54.164 --> 01:29:56.581
Please continue Ms. Brownell.

01:29:59.595 --> 01:30:02.905
<v ->So there have been a variety of investigations,</v>

01:30:02.905 --> 01:30:06.636
if you're asking about a specific investigation,

01:30:06.636 --> 01:30:08.754
I don't know which one it is, nor might I

01:30:08.754 --> 01:30:11.143
have all of the details at hand.

01:30:11.143 --> 01:30:14.476
I'm giving you a picture of the results,

01:30:17.208 --> 01:30:20.503
of a number of investigations, about which

01:30:20.503 --> 01:30:23.896
I as a board member, and others have been made aware.

01:30:23.896 --> 01:30:26.563
And the board has taken steps to

01:30:27.925 --> 01:30:31.591
address some of those issues, for example,

01:30:31.591 --> 01:30:35.341
we found metrics that gave too limited a time

01:30:36.189 --> 01:30:40.658
to inspect, as I said earlier, transmission towers,

01:30:40.658 --> 01:30:42.873
so we've said that's not really good metric,

01:30:42.873 --> 01:30:47.670
the number that you do a day is perhaps not a good metric,

01:30:47.670 --> 01:30:50.920
may suggest to people that they need to

01:30:52.075 --> 01:30:55.380
ignore certain things, not file reports on certain things.

01:30:55.380 --> 01:30:58.071
Another very common thing that we've found,

01:30:58.071 --> 01:31:00.654
is when people are using paper,

01:31:02.621 --> 01:31:03.978
they not only make mistakes,

01:31:03.978 --> 01:31:07.537
they make choices in filling out that are not adequate

01:31:07.537 --> 01:31:11.370
to determine, to create an appropriate record.

01:31:13.120 --> 01:31:16.329
So we are deploying more and more tablets,

01:31:16.329 --> 01:31:19.505
and I've asked them to escalate that deployment,

01:31:19.505 --> 01:31:22.188
so that you'll have templates, where you have to

01:31:22.188 --> 01:31:25.040
fill out a form accurately, or

01:31:25.040 --> 01:31:29.623
you have to answer each question within a certain

01:31:29.623 --> 01:31:34.488
range of answers, you can't say NA, or you can't go on.

01:31:34.488 --> 01:31:36.977
So I'm just giving you some samples.

01:31:36.977 --> 01:31:38.133
Are there people who--

01:31:38.133 --> 01:31:39.983
<v Mr. Abrams>Sorry, sorry if I can--</v>

01:31:39.983 --> 01:31:41.265
<v ->Sorry go ahead.</v>

01:31:41.265 --> 01:31:43.632
<v ->I appreciate that, I'm not really looking for samples,</v>

01:31:43.632 --> 01:31:46.722
and if this is the answer to my question that's fine,

01:31:46.722 --> 01:31:48.908
but what I'm asking is for these,

01:31:48.908 --> 01:31:52.481
I mean it's been clearly reported out, right?

01:31:52.481 --> 01:31:56.020
That there were falsifications of documents,

01:31:56.020 --> 01:31:58.765
so for those specific instance,

01:31:58.765 --> 01:32:01.932
not in general sample what could possibly happen.

01:32:01.932 --> 01:32:04.726
Was it time for those incidences?

01:32:04.726 --> 01:32:07.393
Time pressures, and the fact that it was on paper

01:32:07.393 --> 01:32:10.913
that caused them to be motivated to falsify documents?

01:32:10.913 --> 01:32:12.433
<v ->It was-</v>
<v Attorney>Wait, wait!</v>

01:32:12.433 --> 01:32:13.584
I'm going to admonish you

01:32:13.584 --> 01:32:15.592
not to divulge privileged information.

01:32:15.592 --> 01:32:16.425
<v ->Okay.</v>

01:32:21.668 --> 01:32:26.585
<v Judge>In the example that you gave Ms. Brownell,</v>

01:32:27.422 --> 01:32:30.622
just a moment ago, were those examples

01:32:30.622 --> 01:32:32.955
from a particular proceeding

01:32:35.534 --> 01:32:37.902
that the Commission has before it?

01:32:37.902 --> 01:32:39.985
Or has recently resolved?

01:32:41.554 --> 01:32:44.399
<v ->I honestly, I can't tell you.</v>

01:32:44.399 --> 01:32:45.232
<v Judge>Okay.</v>

01:32:45.232 --> 01:32:48.732
<v ->But they are personal issues, so there are</v>

01:32:48.732 --> 01:32:50.114
specific issues.

01:32:50.114 --> 01:32:51.947
<v Judge>Okay.</v>

01:32:55.525 --> 01:32:59.275
I think that each set of specific violations,

01:33:02.166 --> 01:33:06.249
or charges in particular enforcement proceedings,

01:33:07.454 --> 01:33:12.035
are part of the enforcement proceeding itself.

01:33:12.035 --> 01:33:15.866
What here we're focused on is the governance role

01:33:15.866 --> 01:33:18.346
for purposes of emerging from bankruptcy.

01:33:18.346 --> 01:33:20.429
So can you, one more shot

01:33:21.484 --> 01:33:25.213
at getting the answer that you're looking for Mr Abraham's--

01:33:25.213 --> 01:33:26.046
<v ->Sure.</v>

01:33:26.046 --> 01:33:26.879
<v Judge>Related to this topic,</v>

01:33:26.879 --> 01:33:28.078
and then let's move onto the next question.

01:33:28.078 --> 01:33:28.911
<v ->Sure.</v>

01:33:29.858 --> 01:33:30.795
<v ->We'll get there.</v>

01:33:30.795 --> 01:33:31.900
<v ->One more question.</v>

01:33:31.900 --> 01:33:35.553
I'm not sure we will, given the response from council.

01:33:35.553 --> 01:33:36.386
But,

01:33:39.939 --> 01:33:44.689
we're here to discuss how we PG&amp;E will resolve bankruptcy

01:33:46.279 --> 01:33:50.112
and come out with the safety oriented culture.

01:33:53.575 --> 01:33:56.771
Any corporation that I've been associated with,

01:33:56.771 --> 01:34:00.052
part of a safety culture is transparency,

01:34:00.052 --> 01:34:03.267
part of a safety culture is investigating,

01:34:03.267 --> 01:34:04.891
a proper investigation,

01:34:04.891 --> 01:34:08.926
before you are legally obligated to do so,

01:34:08.926 --> 01:34:13.016
to find these answers and provide transparency,

01:34:13.016 --> 01:34:16.339
so that the public can have more trust

01:34:16.339 --> 01:34:18.162
in the corporation,

01:34:18.162 --> 01:34:21.304
that you're not gonna burn our houses down anymore.

01:34:21.304 --> 01:34:24.221
So this goes to that central point,

01:34:25.350 --> 01:34:29.767
for these specific instances, are you able to tell us

01:34:32.480 --> 01:34:35.730
the investigation, and the motivations,

01:34:36.904 --> 01:34:39.007
associated with those personnel

01:34:39.007 --> 01:34:41.910
that you have been able to find out?

01:34:41.910 --> 01:34:43.077
And ascertain?

01:34:46.678 --> 01:34:50.337
<v ->Mr. Abrams, we always do an investigation.</v>

01:34:50.337 --> 01:34:54.276
So let me just be very clear about that.

01:34:54.276 --> 01:34:57.346
The results of those investigations are reported

01:34:57.346 --> 01:35:00.635
to various committees of the board,

01:35:00.635 --> 01:35:02.385
and the board itself.

01:35:03.254 --> 01:35:07.337
We examine the causes of what drove people to do,

01:35:08.216 --> 01:35:11.158
to the extent that they have acknowledged,

01:35:11.158 --> 01:35:14.715
and by the way people don't always acknowledge,

01:35:14.715 --> 01:35:18.882
to the extent that we, they have acknowledged and,

01:35:21.036 --> 01:35:22.606
we have examined.

01:35:22.606 --> 01:35:27.273
I've given you the range of reasons that people give us,

01:35:28.846 --> 01:35:31.107
I can't say that anyone has ever said

01:35:31.107 --> 01:35:33.422
"I've purposefully set out to lie to you".

01:35:33.422 --> 01:35:34.255
<v ->Okay.</v>

01:35:38.362 --> 01:35:40.957
So what did you take away from those investigations,

01:35:40.957 --> 01:35:43.788
in terms of a changed culture?

01:35:43.788 --> 01:35:47.391
What did you do as an action to ensure that PG&amp;E

01:35:47.391 --> 01:35:52.006
wouldn't have any more falsification documents?

01:35:52.006 --> 01:35:54.914
<v ->The board has worked with management,</v>

01:35:54.914 --> 01:35:57.081
to do a variety of things,

01:35:58.303 --> 01:36:01.440
including, as I've mentioned,

01:36:01.440 --> 01:36:04.190
setting more appropriate metrics,

01:36:07.054 --> 01:36:11.567
giving people technology that will make it easier for them

01:36:11.567 --> 01:36:15.196
to do their jobs, and easier for them

01:36:15.196 --> 01:36:17.332
to report accurate data--

01:36:17.332 --> 01:36:18.165
<v ->Okay.</v>

01:36:18.165 --> 01:36:19.751
<v ->Holding people, I'm not finished.</v>

01:36:19.751 --> 01:36:20.584
<v ->Okay.</v>

01:36:20.584 --> 01:36:23.026
<v ->Holding people accountable,</v>

01:36:23.026 --> 01:36:25.367
even though traditionally,

01:36:25.367 --> 01:36:26.480
when people are terminated,

01:36:26.480 --> 01:36:31.424
we might be grieved, we just have to have zero tolerance,

01:36:31.424 --> 01:36:33.570
and the fourth thing I would say,

01:36:33.570 --> 01:36:35.790
and there are a lots,

01:36:35.790 --> 01:36:39.236
is better training, having people understand

01:36:39.236 --> 01:36:42.230
the import of their behaviors.

01:36:42.230 --> 01:36:44.216
<v ->Okay thank you.</v>

01:36:44.216 --> 01:36:49.145
You mention that there's wildfire mitigation experience

01:36:49.145 --> 01:36:50.605
that has been added to the board,

01:36:50.605 --> 01:36:54.824
can you describe that wildfire mitigation experience?

01:36:54.824 --> 01:36:58.284
<v ->It's been recently added to the matrix,</v>

01:36:58.284 --> 01:37:00.623
which has been a work in progress.

01:37:00.623 --> 01:37:03.740
We're working with, two search firms,

01:37:03.740 --> 01:37:06.990
one of which is giving job descriptions

01:37:08.300 --> 01:37:11.450
for the NOM GOV committee and the board to review.

01:37:11.450 --> 01:37:15.558
So I don't have a fulsome definition of that

01:37:15.558 --> 01:37:19.595
at this moment in time, but we will have a job description.

01:37:19.595 --> 01:37:21.053
Could be.
<v Mr. Abrams>Okay so,</v>

01:37:21.053 --> 01:37:23.406
currently that does not exist on the board?

01:37:23.406 --> 01:37:25.130
<v ->It does not exist on the board.</v>

01:37:25.130 --> 01:37:29.047
It does exist on our safety advisory committee,

01:37:30.481 --> 01:37:32.445
that's headed by Chris Hart.

01:37:32.445 --> 01:37:35.427
We have a former Cal fire, I think he's a

01:37:35.427 --> 01:37:38.694
battalion chief, who's been added to that,

01:37:38.694 --> 01:37:41.210
and they are advising both management,

01:37:41.210 --> 01:37:43.121
and the board.

01:37:43.121 --> 01:37:45.293
<v ->And I know your new to your position,</v>

01:37:45.293 --> 01:37:49.094
so do you think it was not a failure prior to your arrival,

01:37:49.094 --> 01:37:50.033
that they didn't recognize,

01:37:50.033 --> 01:37:53.269
due to the many fires, that they needed to ensure

01:37:53.269 --> 01:37:57.621
that someone who had that experience was on the board prior?

01:37:57.621 --> 01:38:00.371
<v ->I really don't feel comfortable</v>

01:38:01.257 --> 01:38:05.030
passing judgment on people when I wasn't there.

01:38:05.030 --> 01:38:07.360
<v ->No problem, thank you.</v>

01:38:07.360 --> 01:38:11.460
You mentioned that you were looking to bring someone on

01:38:11.460 --> 01:38:13.990
who would be able to provide

01:38:13.990 --> 01:38:16.823
major transformational experience.

01:38:18.761 --> 01:38:21.761
Given that Mr. Johnson stated in his

01:38:26.004 --> 01:38:28.504
hearing, in this hearing room,

01:38:29.593 --> 01:38:32.952
that his role was not to inspire,

01:38:32.952 --> 01:38:35.035
but just provide purpose?

01:38:36.150 --> 01:38:39.431
How do you expect, with him in that role,

01:38:39.431 --> 01:38:41.281
that you're gonna get transformation

01:38:41.281 --> 01:38:44.031
and inspiring leadership in PG&amp;E?

01:38:44.865 --> 01:38:45.703
<v Attorney>Object, that's</v>

01:38:45.703 --> 01:38:49.132
mischaracterizes Mr. Johnson testimony.

01:38:49.132 --> 01:38:49.965
<v Mr. Abrams>I believe it's</v>

01:38:49.965 --> 01:38:52.620
directly quoted from Mr. Johnson,

01:38:52.620 --> 01:38:54.953
he stated "It's not my role"

01:38:56.022 --> 01:38:58.689
"to inspire, I can give purpose"

01:38:59.745 --> 01:39:00.953
<v Attorney>And he went on to</v>

01:39:00.953 --> 01:39:04.166
quite a lot more testimony on that topic.

01:39:04.166 --> 01:39:05.454
<v Judge>The witness can answer to the best of</v>

01:39:05.454 --> 01:39:06.454
her ability.

01:39:08.058 --> 01:39:12.122
<v ->I'm not gonna comment on what Mr. Johnson said,</v>

01:39:12.122 --> 01:39:15.484
I wasn't there and I haven't read the transcript.

01:39:15.484 --> 01:39:20.114
Although I have seen the leadership he has provided

01:39:20.114 --> 01:39:24.234
in employee meetings, and I would call it transformation,

01:39:24.234 --> 01:39:27.948
even if he would not, or inspirational.

01:39:27.948 --> 01:39:32.594
What I'm talking about is attracting someone to the board,

01:39:32.594 --> 01:39:36.177
who has been through a major transformation

01:39:37.421 --> 01:39:38.891
of an industry.

01:39:38.891 --> 01:39:41.241
So I came from banking,

01:39:41.241 --> 01:39:43.187
to the Pennsylvania state Commission,

01:39:43.187 --> 01:39:46.955
and I was recruited specifically because,

01:39:46.955 --> 01:39:48.525
I had been through the transformation

01:39:48.525 --> 01:39:50.934
of the banking industry, and they were going through

01:39:50.934 --> 01:39:53.607
restructuring in Pennsylvania.

01:39:53.607 --> 01:39:55.980
So I think it would be helpful,

01:39:55.980 --> 01:39:57.281
and by the way this is me,

01:39:57.281 --> 01:39:58.603
we're still working on the matrix,

01:39:58.603 --> 01:40:01.802
I may get out voted, but I don't think so ,

01:40:01.802 --> 01:40:05.412
that I think it would be hugely helpful

01:40:05.412 --> 01:40:07.186
to get somebody who's been through,

01:40:07.186 --> 01:40:10.042
for example, a major IT transformation.

01:40:10.042 --> 01:40:13.737
Major transformation because of technology changes,

01:40:13.737 --> 01:40:18.737
not that's happened, for example in the Healthcare industry.

01:40:19.435 --> 01:40:23.141
<v ->Are there examples, because I appreciate that,</v>

01:40:23.141 --> 01:40:25.658
are there examples of corporations that you can point

01:40:25.658 --> 01:40:28.163
to that have been through bankruptcy,

01:40:28.163 --> 01:40:32.139
and arose, that you feel like are examples for PG&amp;E

01:40:32.139 --> 01:40:35.472
on how you can overcome these obstacles?

01:40:37.130 --> 01:40:39.797
<v ->Yanno, that's a good question.</v>

01:40:40.721 --> 01:40:42.971
And off the top of my head,

01:40:44.037 --> 01:40:44.870
I am...

01:40:46.691 --> 01:40:48.650
I'm actually not able to come up with that,

01:40:48.650 --> 01:40:51.784
but it would be a conversation I'd be happy to have.

01:40:51.784 --> 01:40:55.277
I have looked a lot at what it takes

01:40:55.277 --> 01:40:57.254
to be a transformational leader,

01:40:57.254 --> 01:41:00.254
and I've looked at industries where,

01:41:01.268 --> 01:41:05.108
in fact you see it happening right now actually at GE,

01:41:05.108 --> 01:41:08.581
as they restructured themselves,

01:41:08.581 --> 01:41:10.791
not having been through bankruptcy,

01:41:10.791 --> 01:41:13.372
but I'd have to really think about that,

01:41:13.372 --> 01:41:16.086
but it's a thoughtful question, thank you.

01:41:16.086 --> 01:41:17.086
<v ->Thank you.</v>

01:41:21.808 --> 01:41:26.558
If there is a, as you stated, "a mass failure in safety",

01:41:29.347 --> 01:41:32.276
do you feel like that, that is a

01:41:32.276 --> 01:41:35.484
wagging indicator of performance?

01:41:35.484 --> 01:41:36.642
<v Attorney>Object to the form of the question,</v>

01:41:36.642 --> 01:41:38.350
I don't remember her using the term

01:41:38.350 --> 01:41:41.167
"mass failing of safety".

01:41:41.167 --> 01:41:44.339
<v Judge>Can you point us to where your...</v>

01:41:44.339 --> 01:41:45.995
Where that term comes from Mr. Abrams?

01:41:45.995 --> 01:41:46.987
Was from her test--
<v ->It was stated in</v>

01:41:46.987 --> 01:41:48.487
earlier testimony.

01:41:49.459 --> 01:41:51.337
<v Attorney>Objection.</v>

01:41:51.337 --> 01:41:52.170
<v ->Okay.</v>
<v Judge>Can you</v>

01:41:52.170 --> 01:41:53.761
rephrase your question Mr. Abrams?

01:41:53.761 --> 01:41:55.042
<v ->I'll just skip the question,</v>

01:41:55.042 --> 01:41:59.625
I made note of it when she said it, but I will move on.

01:42:05.710 --> 01:42:08.710
So as a victim, I am soon to become,

01:42:11.392 --> 01:42:15.142
if this plan of reorganization comes through,

01:42:18.202 --> 01:42:21.342
part of a major shareholder class

01:42:21.342 --> 01:42:23.675
of Pacific Gas and Electric.

01:42:26.486 --> 01:42:29.482
I described this issue with Mr. Wells,

01:42:29.482 --> 01:42:30.844
and asked his opinion on it,

01:42:30.844 --> 01:42:33.011
and I'll ask you the same.

01:42:35.495 --> 01:42:37.495
If shareholders are now,

01:42:39.784 --> 01:42:43.867
these major shareholders, are now also customers,

01:42:46.172 --> 01:42:49.505
rates when they change, increased rates,

01:42:51.387 --> 01:42:53.970
given the wide price elasticity

01:42:56.897 --> 01:42:59.659
associated with the natural monopoly,

01:42:59.659 --> 01:43:03.076
increases in rates, benefit shareholders,

01:43:05.226 --> 01:43:08.688
when, but they do not benefit customers

01:43:08.688 --> 01:43:12.961
to have increased rates, 'cause it affects affordability.

01:43:12.961 --> 01:43:16.211
So how do you see that playing out with

01:43:17.703 --> 01:43:21.370
the next fire, or the next need for capital?

01:43:22.305 --> 01:43:26.183
How do you see that playing out in terms of the

01:43:26.183 --> 01:43:28.600
terror for a wildfire victim,

01:43:30.733 --> 01:43:34.457
who wants to see return on their investment,

01:43:34.457 --> 01:43:36.299
while at the same time,

01:43:36.299 --> 01:43:38.637
looking to make sure your rates are low?

01:43:38.637 --> 01:43:42.637
<v Attorney>Object to the form of the question.</v>

01:43:46.624 --> 01:43:47.457
<v Judge>The question</v>

01:43:47.457 --> 01:43:49.294
got a little long for me.
(laughing)

01:43:49.294 --> 01:43:50.127
<v ->Okay.</v>
<v Judge>My coffee</v>

01:43:50.127 --> 01:43:51.210
has worn off.

01:43:52.291 --> 01:43:53.124
Could you--

01:43:53.124 --> 01:43:53.958
<v ->Yeah I know.</v>
<v Judge>Try to</v>

01:43:53.958 --> 01:43:54.791
shorten it a little bit?

01:43:54.791 --> 01:43:55.874
<v ->Absolutely.</v>
<v ->Thank you.</v>

01:43:55.874 --> 01:43:59.457
<v ->And it was long winded, so I fully admit.</v>

01:44:01.582 --> 01:44:05.999
Raising rates, I'm now a shareholder victim customer,

01:44:07.684 --> 01:44:10.759
I have interest as my share, as a shareholder,

01:44:10.759 --> 01:44:15.426
for increasing rates, so that I get a greater return

01:44:15.426 --> 01:44:19.676
on my investment, as a customer I want lower rates.

01:44:21.232 --> 01:44:24.065
and my neighbors want lower rates.

01:44:25.337 --> 01:44:29.133
How is that gonna be treated, now that you have this new

01:44:29.133 --> 01:44:32.383
21% shareholder class within PG&amp;E?

01:44:38.429 --> 01:44:39.987
<v ->I'm not sure I entirely understand,</v>

01:44:39.987 --> 01:44:44.085
but understand inherently that you feel perhaps a conflict.

01:44:44.085 --> 01:44:47.331
First of all, we do not go in for rate increases,

01:44:47.331 --> 01:44:51.331
in order to give greater returns to shareholder.

01:44:52.386 --> 01:44:54.831
We go in for rate increases,

01:44:54.831 --> 01:44:59.164
and the Commission is pretty disciplined about this,

01:45:01.264 --> 01:45:04.627
to be able to fund needed expenditures,

01:45:04.627 --> 01:45:09.077
to serve customers, reliably, safely, and affordably,

01:45:09.077 --> 01:45:12.286
and certainly I know that they take all of those

01:45:12.286 --> 01:45:13.869
into consideration.

01:45:17.275 --> 01:45:21.501
So the premise of your question, I think it's one

01:45:21.501 --> 01:45:24.967
which we're probably just not on the same page,

01:45:24.967 --> 01:45:28.634
and yet as a shareholder you may, or may not

01:45:30.662 --> 01:45:33.708
choose to continue to own that stock,

01:45:33.708 --> 01:45:37.844
that's a possibility, those were settlement to which

01:45:37.844 --> 01:45:40.802
I was not, with which I was not involved.

01:45:40.802 --> 01:45:45.333
So the outcome I think, would best be discussed

01:45:45.333 --> 01:45:48.333
with the people who negotiated them.

01:45:50.646 --> 01:45:51.479
<v ->Okay.</v>

01:45:59.084 --> 01:46:01.557
So you're aware that in the year 2000,

01:46:01.557 --> 01:46:03.810
PG&amp;E also was in bankruptcy?

01:46:03.810 --> 01:46:05.044
<v ->I am aware of that.</v>

01:46:05.044 --> 01:46:06.523
<v ->Okay.</v>

01:46:06.523 --> 01:46:09.865
Are you aware upon the exit of bankruptcy,

01:46:09.865 --> 01:46:13.649
Commissioner Loretta Lynch at the time stated,

01:46:13.649 --> 01:46:16.461
"I think we are moving, we are in a more,"

01:46:16.461 --> 01:46:19.378
"we are more vulnerable than ever",

01:46:21.441 --> 01:46:24.006
does this give you the sense that

01:46:24.006 --> 01:46:26.276
we've been here before?

01:46:26.276 --> 01:46:28.109
<v Attorney>Objection.</v>

01:46:28.109 --> 01:46:29.511
Lacks foundation.

01:46:29.511 --> 01:46:32.676
We don't know the context of that remark.

01:46:32.676 --> 01:46:34.384
<v Judge>I agree, it does lack foundation,</v>

01:46:34.384 --> 01:46:36.229
but I think the question can be answered

01:46:36.229 --> 01:46:39.312
to the best of the witnesses ability.

01:46:40.819 --> 01:46:45.478
<v ->I knew Commissioner Lynch, and we work together</v>

01:46:45.478 --> 01:46:47.646
to resolve many of the market issues

01:46:47.646 --> 01:46:49.630
that we're facing, California,

01:46:49.630 --> 01:46:52.679
along with the infrastructure issues,

01:46:52.679 --> 01:46:56.424
but I honestly don't know why she said that.

01:46:56.424 --> 01:46:57.968
So it is hard to answer.

01:46:57.968 --> 01:47:00.340
At the circumstances of that bankruptcy,

01:47:00.340 --> 01:47:03.319
were entirely different than this.

01:47:03.319 --> 01:47:04.152
<v Mr. Abrams>Thank you.</v>

01:47:04.152 --> 01:47:06.861
<v ->So it may not be apples to apples.</v>

01:47:06.861 --> 01:47:09.887
I don't feel giving the bankruptcy process

01:47:09.887 --> 01:47:14.887
in the rigor with which, bankruptcy judges manage those,

01:47:15.029 --> 01:47:18.959
they would have emerged from bankruptcy,

01:47:18.959 --> 01:47:21.584
with the concept that they were weaker.

01:47:21.584 --> 01:47:22.501
So I think,

01:47:25.138 --> 01:47:26.423
I don't know why she thought that.

01:47:26.423 --> 01:47:27.256
<v ->Okay.</v>

01:47:28.894 --> 01:47:32.319
Are you aware that after that bankruptcy,

01:47:32.319 --> 01:47:36.172
the chairman at the time, Robert Glynn Jr,

01:47:36.172 --> 01:47:38.089
was awarded 17 million,

01:47:39.301 --> 01:47:43.424
and Gordon Smith received 10 million dollars.

01:47:43.424 --> 01:47:44.805
Are you aware that?

01:47:44.805 --> 01:47:45.638
<v Attorney>Objection.</v>

01:47:45.638 --> 01:47:48.535
Foundation and relevance.

01:47:48.535 --> 01:47:50.785
<v ->The relevance, or, sorry.</v>

01:47:53.011 --> 01:47:53.976
<v Judge>You can explain what you think</v>

01:47:53.976 --> 01:47:56.582
the relevance is, and then I will...

01:47:56.582 --> 01:48:00.931
<v ->The relevance is, I am trying to understand</v>

01:48:00.931 --> 01:48:05.848
if those types of things will be done with this bankruptcy.

01:48:07.605 --> 01:48:09.846
<v Judge>The objection is sustained.</v>

01:48:09.846 --> 01:48:12.627
You can ask that question.

01:48:12.627 --> 01:48:13.460
<v ->Okay.</v>

01:48:17.376 --> 01:48:21.959
Will those types of awards be provided post bankruptcy,

01:48:24.662 --> 01:48:26.079
this time around?

01:48:28.980 --> 01:48:32.813
<v ->We've recently redone our compensation plan,</v>

01:48:33.933 --> 01:48:36.964
which is part of our plan of reorganization,

01:48:36.964 --> 01:48:39.579
which I believe has both short-term,

01:48:39.579 --> 01:48:41.580
and long-term metrics, that are clearly

01:48:41.580 --> 01:48:45.330
associated with safety, and I can assure you,

01:48:46.190 --> 01:48:48.580
the both, the compensation committee, and the board,

01:48:48.580 --> 01:48:51.663
have the authority to reduce anything

01:48:55.147 --> 01:49:00.147
that they see fit, based on a catastrophic safety event,

01:49:00.168 --> 01:49:03.335
or any kind of major event, that would

01:49:05.379 --> 01:49:08.449
lead one to conclude they had not behaved appropriately,

01:49:08.449 --> 01:49:11.966
or responsibly, and I actually have been involved

01:49:11.966 --> 01:49:16.966
in a situation, on a board, where we reduced compensation

01:49:17.124 --> 01:49:19.540
because of a safety incident.

01:49:19.540 --> 01:49:21.879
So I wouldn't hesitate to do so.

01:49:21.879 --> 01:49:23.806
I don't envision that.

01:49:23.806 --> 01:49:24.639
<v ->Okay.</v>

01:49:26.180 --> 01:49:30.460
Are you aware that through this bankruptcy,

01:49:30.460 --> 01:49:31.877
the victim class,

01:49:33.672 --> 01:49:37.589
was the only one being compensated with shares?

01:49:40.099 --> 01:49:44.847
<v ->Again as I said, I did not negotiate that settlement,</v>

01:49:44.847 --> 01:49:48.145
so I think that question, I am aware of it,

01:49:48.145 --> 01:49:50.382
but I think though, how it came to be,

01:49:50.382 --> 01:49:53.397
and why it came to be, is best left to those

01:49:53.397 --> 01:49:55.150
who were at the negotiating table,

01:49:55.150 --> 01:49:58.521
and I know that there were legal representative.

01:49:58.521 --> 01:50:02.311
So I would encourage you to have that conversation.

01:50:02.311 --> 01:50:04.255
<v ->I understand you're aware.</v>

01:50:04.255 --> 01:50:07.074
As the chair of the board,

01:50:07.074 --> 01:50:09.407
do you think that it is fair

01:50:10.655 --> 01:50:15.305
that the entrenched investors,

01:50:15.305 --> 01:50:19.472
were not compensated with shares, but that victims

01:50:22.373 --> 01:50:25.123
are given stake in a company that

01:50:27.111 --> 01:50:31.278
burned their homes down and decimated their lives?

01:50:33.601 --> 01:50:35.125
<v ->As I acknowledged to you earlier,</v>

01:50:35.125 --> 01:50:37.875
I can understand your discomfort,

01:50:38.835 --> 01:50:43.155
perhaps distaste, certainly can understand that.

01:50:43.155 --> 01:50:46.418
I did not negotiate that arrangement,

01:50:46.418 --> 01:50:49.941
and I think the answer to your question,

01:50:49.941 --> 01:50:54.941
I think while I'll acknowledge, kind of maybe some of the

01:50:55.491 --> 01:50:58.805
ethical dilemma, or discomfort you may feel,

01:50:58.805 --> 01:51:03.152
I didn't negotiate it, so I can't really comment.

01:51:03.152 --> 01:51:03.985
<v ->Okay.</v>

01:51:05.242 --> 01:51:07.891
Have you been familiar at all

01:51:07.891 --> 01:51:11.775
with the letters that have been coming in from victims,

01:51:11.775 --> 01:51:14.860
into the bankruptcy court docket?

01:51:14.860 --> 01:51:16.577
<v ->I've read about them, yes.</v>

01:51:16.577 --> 01:51:17.410
<v ->Okay.</v>

01:51:20.938 --> 01:51:23.687
Have you understood from those letters,

01:51:23.687 --> 01:51:26.604
that they go well beyond discomfort

01:51:28.028 --> 01:51:29.695
with that agreement?

01:51:32.848 --> 01:51:36.337
<v ->I understand this is a very emotional topic.</v>

01:51:36.337 --> 01:51:40.149
I understand the inherent conflicts that people feel.

01:51:40.149 --> 01:51:44.149
And I recognize, that the feelings are raw here.

01:51:46.031 --> 01:51:47.031
This is a...

01:51:49.731 --> 01:51:53.189
People have been through horrible things.

01:51:53.189 --> 01:51:55.851
So I'm certainly aware of what they've said,

01:51:55.851 --> 01:51:57.606
and I'm sure the judge will consider it,

01:51:57.606 --> 01:52:00.691
but I again, I have to tell you Mr. Abrams,

01:52:00.691 --> 01:52:03.858
I was not involved in that settlement,

01:52:05.904 --> 01:52:08.413
and I think you would really be better served

01:52:08.413 --> 01:52:11.456
to have this conversation with the people who were.

01:52:11.456 --> 01:52:13.367
<v Mr. Abrams>And I'm not having a conversation about it,</v>

01:52:13.367 --> 01:52:17.937
and I'm asking you, your opinion as the chair of the board.

01:52:17.937 --> 01:52:19.937
Do you think it is fair?

01:52:21.486 --> 01:52:23.226
Is the question.

01:52:23.226 --> 01:52:24.059
<v Attorney>Objection.</v>

01:52:24.059 --> 01:52:24.892
Asked and answered.

01:52:24.892 --> 01:52:26.173
<v Mr. Abrams>It was not answered.</v>

01:52:26.173 --> 01:52:28.404
<v Judge>It was answered to the best of her ability.</v>

01:52:28.404 --> 01:52:29.559
Next question please.

01:52:29.559 --> 01:52:30.392
<v ->Okay.</v>

01:52:34.003 --> 01:52:35.920
(sigh)

01:52:42.084 --> 01:52:45.282
You indicated in your testimony

01:52:45.282 --> 01:52:48.615
that you are an independent board chair,

01:52:50.680 --> 01:52:53.065
I know you described this a bit earlier,

01:52:53.065 --> 01:52:55.822
but is there anything you would like to elaborate on

01:52:55.822 --> 01:52:59.072
regarding how the board is independent?

01:53:05.921 --> 01:53:08.453
<v ->I could wax eloquent I'm sure for a long time,</v>

01:53:08.453 --> 01:53:10.107
but I'm not sure on a Friday afternoon

01:53:10.107 --> 01:53:11.272
people want to hear that.

01:53:11.272 --> 01:53:12.605
<v Mr. Abrams>Okay.</v>

01:53:12.605 --> 01:53:14.282
I am very comfortable, let me say this

01:53:14.282 --> 01:53:18.042
with absolute certainty, that the board individually

01:53:18.042 --> 01:53:22.814
and collectively, is acting in the best interests

01:53:22.814 --> 01:53:26.397
of what they call the estate in bankruptcy,

01:53:27.540 --> 01:53:29.121
which includes a lot of things.

01:53:29.121 --> 01:53:33.015
So I am very comfortable with the behavior,

01:53:33.015 --> 01:53:35.348
and commitment to the board.

01:53:37.152 --> 01:53:39.133
<v Mr. Abrams>Okay.</v>

01:53:39.133 --> 01:53:40.472
<v ->Of the board, excuse me.</v>

01:53:40.472 --> 01:53:42.995
<v ->And let me state that,</v>

01:53:42.995 --> 01:53:43.889
in case it wasn't an apparent,

01:53:43.889 --> 01:53:46.311
I'm not looking for a job through this question,

01:53:46.311 --> 01:53:47.436
(laughing)

01:53:47.436 --> 01:53:49.519
but I will ask it anyway.

01:53:52.854 --> 01:53:56.937
It's been recommended, by some, that you consider

01:53:58.393 --> 01:54:02.643
having a wildfire victim, represented on the board.

01:54:04.100 --> 01:54:06.696
Is that under consideration?

01:54:06.696 --> 01:54:08.446
<v ->Not at this moment.</v>

01:54:13.221 --> 01:54:17.967
<v ->On page four-four, line 19 of your testimony,</v>

01:54:17.967 --> 01:54:21.796
you state "Holding the CEO and management accountable"

01:54:21.796 --> 01:54:24.963
"for results, is a primary objective",

01:54:27.763 --> 01:54:29.699
can you describe, the degree to which,

01:54:29.699 --> 01:54:32.029
the board has had success with this,

01:54:32.029 --> 01:54:34.029
over the past few years?

01:54:36.019 --> 01:54:39.805
<v ->I can't speak to the board for the past few years,</v>

01:54:39.805 --> 01:54:43.822
because I've been here, what seems like a lot of years,

01:54:43.822 --> 01:54:47.562
but it's been almost less than a year.

01:54:47.562 --> 01:54:49.986
Have we had success?

01:54:49.986 --> 01:54:53.581
I think we have a good working relationship

01:54:53.581 --> 01:54:55.914
with the CEO and management.

01:54:57.282 --> 01:54:58.449
I think we are

01:55:00.140 --> 01:55:03.140
agreed that we want to drive change.

01:55:04.195 --> 01:55:07.278
I think the board has been very clear

01:55:09.597 --> 01:55:13.430
about certain things, like the pace of change,

01:55:14.678 --> 01:55:17.678
which we would like to see increase,

01:55:18.694 --> 01:55:21.527
about the need to focus on certain

01:55:23.464 --> 01:55:26.111
specific business practices,

01:55:26.111 --> 01:55:28.769
which we feel need to be improved,

01:55:28.769 --> 01:55:32.943
particularly to support better safety operations,

01:55:32.943 --> 01:55:36.577
like the data issue, and I'm not talking merely about

01:55:36.577 --> 01:55:38.639
the data that you were referencing earlier

01:55:38.639 --> 01:55:40.213
in terms of recordkeeping,

01:55:40.213 --> 01:55:43.476
I'm talking about our overall ability to integrate

01:55:43.476 --> 01:55:46.309
and manage disparate data systems,

01:55:48.153 --> 01:55:52.434
because we're not getting the full picture of what we want,

01:55:52.434 --> 01:55:55.693
which is why we're about to engage a well-known firm

01:55:55.693 --> 01:55:59.839
that's solved this asset management problem

01:55:59.839 --> 01:56:03.708
in a large way, by the Airlines industry,

01:56:03.708 --> 01:56:06.469
who also do a lot of work for government,

01:56:06.469 --> 01:56:08.774
and have worked for some big telecom companies,

01:56:08.774 --> 01:56:10.080
with whom we've spoken.

01:56:10.080 --> 01:56:10.913
<v ->Okay.</v>

01:56:13.668 --> 01:56:16.577
On page four-six, and see your council

01:56:16.577 --> 01:56:20.066
checking the time, so I'm going to try to move quickly.

01:56:20.066 --> 01:56:22.254
On page four-six, line one through four,

01:56:22.254 --> 01:56:24.298
you indicate that diversity is important,

01:56:24.298 --> 01:56:26.920
and then you talk about gender diversity.

01:56:26.920 --> 01:56:28.828
How are you looking to get other diversity,

01:56:28.828 --> 01:56:31.184
economic, racial, and other types

01:56:31.184 --> 01:56:33.641
of diversity on the board?

01:56:33.641 --> 01:56:36.367
<v ->Certainly that's part of our refreshment process.</v>

01:56:36.367 --> 01:56:40.168
So we have, in fact, made a commitment

01:56:40.168 --> 01:56:43.999
to increasing the number of Californians,

01:56:43.999 --> 01:56:46.079
but I'm always committed.

01:56:46.079 --> 01:56:49.354
We have five women now, we wanna increase that,

01:56:49.354 --> 01:56:53.083
we have some demographic diversity,

01:56:53.083 --> 01:56:56.250
that ethnic diversity, that I think we

01:56:57.643 --> 01:57:01.287
certainly want to maintain, if not enhance.

01:57:01.287 --> 01:57:05.132
When you read the too many board attachments

01:57:05.132 --> 01:57:07.215
that I have from experts,

01:57:08.068 --> 01:57:09.735
from, and investors,

01:57:11.228 --> 01:57:13.500
from best corporate practices,

01:57:13.500 --> 01:57:16.006
the issue of diversity, of experience,

01:57:16.006 --> 01:57:20.163
diversity of background, is critically important,

01:57:20.163 --> 01:57:23.425
and I myself have had the benefit of that,

01:57:23.425 --> 01:57:26.186
with people coming from different business experiences,

01:57:26.186 --> 01:57:27.295
having different skills.

01:57:27.295 --> 01:57:30.591
I think we've all been enhanced by this process,

01:57:30.591 --> 01:57:33.486
and I certainly would want to maintain that for the future.

01:57:33.486 --> 01:57:34.319
<v ->Okay so,</v>

01:57:36.437 --> 01:57:37.270
let me ask this.

01:57:37.270 --> 01:57:39.463
So it is currently not a goal,

01:57:39.463 --> 01:57:41.194
of the board recruitment process,

01:57:41.194 --> 01:57:44.353
to have economic diversity, folks who have

01:57:44.353 --> 01:57:47.290
a low income background, or racial diversity,

01:57:47.290 --> 01:57:51.207
having more black representatives on the board?

01:57:52.839 --> 01:57:57.006
<v ->It is the goal of the board refreshment process,</v>

01:57:58.366 --> 01:58:02.366
to focus on the skills that have been identified

01:58:03.670 --> 01:58:05.597
in that matrix, 'cause first and foremost,

01:58:05.597 --> 01:58:07.334
that's important--
<v ->Yes.</v>

01:58:07.334 --> 01:58:09.485
<v ->For the appropriate oversight,</v>

01:58:09.485 --> 01:58:12.735
but certainly we want as much diversity

01:58:13.967 --> 01:58:16.570
as we can, and that bring those skills,

01:58:16.570 --> 01:58:18.213
it's how we got five women,

01:58:18.213 --> 01:58:20.588
and the current ethnic diversity,

01:58:20.588 --> 01:58:22.769
and will, that will continue to be a focus.

01:58:22.769 --> 01:58:23.602
<v ->Okay.</v>

01:58:38.528 --> 01:58:40.872
At the bottom of page four-17,

01:58:40.872 --> 01:58:44.751
you indicate that "a board must be agile",

01:58:44.751 --> 01:58:47.084
what do you mean by "agile"?

01:58:50.302 --> 01:58:54.219
<v ->Agile in, there's a couple of different ways.</v>

01:58:55.683 --> 01:59:00.110
First of all, agile in the terms of this board,

01:59:00.110 --> 01:59:02.650
is that you need to have adequate time,

01:59:02.650 --> 01:59:05.056
you really need to be prepared to spend a lot of time,

01:59:05.056 --> 01:59:06.547
and that may not seem like agile,

01:59:06.547 --> 01:59:08.839
but I think it is.

01:59:08.839 --> 01:59:11.889
Secondly, you need to be able to prioritize,

01:59:11.889 --> 01:59:14.962
and re-prioritize, as conditions change,

01:59:14.962 --> 01:59:18.527
as rules change, as regulations change,

01:59:18.527 --> 01:59:21.341
as technology changes, I mean that's one of the things,

01:59:21.341 --> 01:59:25.585
I think that the utility industry has been challenged by,

01:59:25.585 --> 01:59:26.989
just in my experience,

01:59:26.989 --> 01:59:30.489
that isn't maybe a view universal changed,

01:59:32.320 --> 01:59:36.487
shared, but I think we need to be quicker to adapt

01:59:37.333 --> 01:59:40.244
new ways of doing business, I think we need to look at,

01:59:40.244 --> 01:59:44.118
for example, other businesses, not every utility

01:59:44.118 --> 01:59:46.147
is a leader in every business practice,

01:59:46.147 --> 01:59:50.596
and so I think you need to look outside the normal

01:59:50.596 --> 01:59:51.734
course of business.

01:59:51.734 --> 01:59:53.619
So there's a lot of different ways.

01:59:53.619 --> 01:59:54.619
<v ->Thank you.</v>

01:59:56.119 --> 01:59:59.452
You mentioned in earlier testimony that,

02:00:01.260 --> 02:00:04.594
you've changed some of your procurement practices,

02:00:04.594 --> 02:00:07.047
and then now you're expecting to have an RFP,

02:00:07.047 --> 02:00:09.464
before you sign the contract.

02:00:13.806 --> 02:00:17.346
Part of what I understand through this process,

02:00:17.346 --> 02:00:21.093
that occurring right now, is a LOTO,

02:00:21.093 --> 02:00:24.759
in a lot of ways, similar to that?

02:00:24.759 --> 02:00:26.426
My question is this,

02:00:27.522 --> 02:00:32.241
is asking the Commission, parties in this room,

02:00:32.241 --> 02:00:34.550
and victims who are currently being solicited

02:00:34.550 --> 02:00:38.579
for their vote, prior to a plan and even being inked,

02:00:38.579 --> 02:00:40.205
premature?

02:00:40.205 --> 02:00:42.671
And like you have asked,

02:00:42.671 --> 02:00:45.299
to change your procurement processes,

02:00:45.299 --> 02:00:47.299
to have the RFP's first,

02:00:48.223 --> 02:00:51.806
should we not be looking at having a solid,

02:00:53.938 --> 02:00:58.855
finished plan, before we're having this type of proceeding?

02:01:03.550 --> 02:01:06.383
<v ->I think we're working very hard.</v>

02:01:07.493 --> 02:01:10.993
A, to provide a comprehensive robust plan.

02:01:14.653 --> 02:01:17.271
People may differ on how robust,

02:01:17.271 --> 02:01:20.021
or certain elements of that plan,

02:01:21.227 --> 02:01:24.366
but I think we're all striving to get

02:01:24.366 --> 02:01:28.116
emerged from bankruptcy, as soon as possible,

02:01:29.474 --> 02:01:31.806
because we wanna pay the victims,

02:01:31.806 --> 02:01:34.422
I think that's driving,

02:01:34.422 --> 02:01:36.826
I think that's why everyone is focused

02:01:36.826 --> 02:01:38.743
on that June 30th date.

02:01:40.004 --> 02:01:43.436
So in a perfect world, or in many bankruptcies,

02:01:43.436 --> 02:01:47.182
this bankruptcy would go on for years,

02:01:47.182 --> 02:01:51.099
but no one believes that's in the best interest

02:01:51.994 --> 02:01:54.715
of the victims, of the state of California,

02:01:54.715 --> 02:01:58.382
of the customers, and of the company itself.

02:01:59.585 --> 02:02:00.418
<v Mr. Abrams>You don't think there are people</v>

02:02:00.418 --> 02:02:04.041
that feel like this is a rushed process?

02:02:04.041 --> 02:02:05.062
<v ->I'm sure there are people</v>

02:02:05.062 --> 02:02:07.702
who feel that this is a rush process.

02:02:07.702 --> 02:02:10.380
Everyone's entitled to their opinion Mr Abrams.

02:02:10.380 --> 02:02:11.757
<v ->Thank you.</v>
<v ->I'm simply telling</v>

02:02:11.757 --> 02:02:14.056
you that, first and foremost,

02:02:14.056 --> 02:02:16.183
while transforming a company,

02:02:16.183 --> 02:02:20.016
we also wanna make sure that victims get paid.

02:02:26.355 --> 02:02:30.175
<v ->Would you not expect that like an RFP,</v>

02:02:30.175 --> 02:02:33.084
we should be looking at measurable things,

02:02:33.084 --> 02:02:34.537
that might be like an SLA,

02:02:34.537 --> 02:02:37.876
a service level type of agreement,

02:02:37.876 --> 02:02:40.805
baked into this plan of reorganization,

02:02:40.805 --> 02:02:43.305
so that we aren't reliant upon

02:02:44.374 --> 02:02:47.277
subjective measures, that we actually have

02:02:47.277 --> 02:02:51.210
specific metrics tied to investor return,

02:02:51.210 --> 02:02:53.929
tied to executive compensation,

02:02:53.929 --> 02:02:58.265
so that we no longer have to trust this time around

02:02:58.265 --> 02:03:00.137
that PG&amp;E will do the right thing?

02:03:00.137 --> 02:03:04.404
<v Attorney>Object to form of the question.</v>

02:03:04.404 --> 02:03:05.393
<v Judge>The witness can to answer</v>

02:03:05.393 --> 02:03:08.127
to the best of her ability.

02:03:08.127 --> 02:03:10.710
<v ->I think you've already seen a</v>

02:03:12.369 --> 02:03:16.787
compensation plan that has very clear objective metrics,

02:03:16.787 --> 02:03:19.787
according to, and very specifically,

02:03:20.844 --> 02:03:24.463
actually we started to do that before 10:54,

02:03:24.463 --> 02:03:25.682
and the Commissions proceeding,

02:03:25.682 --> 02:03:29.386
but we are trying to have verifiable objective metrics

02:03:29.386 --> 02:03:32.940
that are tied to safety, and all the metrics under safety.

02:03:32.940 --> 02:03:37.877
There are a lot of things that we can all ask for,

02:03:37.877 --> 02:03:41.010
but we need to remember that this is a business,

02:03:41.010 --> 02:03:44.609
and if there are too many limitations,

02:03:44.609 --> 02:03:48.716
and too many rules, particularly rules that are

02:03:48.716 --> 02:03:53.154
a challenge to enforce, or that are not well understood,

02:03:53.154 --> 02:03:56.226
we really won't attract, I mean the goal

02:03:56.226 --> 02:03:58.840
is ultimately to attract the long-term investors

02:03:58.840 --> 02:04:02.083
that you had before, the Kelpers, the Kelstors,

02:04:02.083 --> 02:04:05.584
the Vanguards, nobody seems to like the hedge funds,

02:04:05.584 --> 02:04:08.088
well we need to attract those long-term investors.

02:04:08.088 --> 02:04:11.547
So if you put too many restrictions that

02:04:11.547 --> 02:04:14.630
are not understood, or do not lead to

02:04:16.742 --> 02:04:19.659
a company that is held accountable,

02:04:21.201 --> 02:04:24.247
but is run like a business,

02:04:24.247 --> 02:04:26.615
I think you limit the opportunities,

02:04:26.615 --> 02:04:30.032
but again, reasonable people can disagree

02:04:31.122 --> 02:04:34.038
on what they wanna see in the plan.

02:04:34.038 --> 02:04:35.967
<v Mr. Abrams>Thank you.</v>

02:04:35.967 --> 02:04:38.338
<v Judge>Just as a time check,</v>

02:04:38.338 --> 02:04:41.373
you have just under five minutes.

02:04:41.373 --> 02:04:45.790
<v ->Okay, I will make sure I adhere to that, thank you.</v>

02:04:47.027 --> 02:04:49.071
Do you understand the difference between

02:04:49.071 --> 02:04:52.763
activity metrics and performance-based metrics?

02:04:52.763 --> 02:04:55.359
<v ->I do, I think I do, I should.</v>

02:04:55.359 --> 02:04:56.359
<v ->All right.</v>

02:04:59.093 --> 02:05:03.526
Do you feel that the board should be making sure

02:05:03.526 --> 02:05:04.865
that throughout the company,

02:05:04.865 --> 02:05:07.147
there are performance-based metrics,

02:05:07.147 --> 02:05:11.034
and that ties to compensation, and not

02:05:11.034 --> 02:05:13.309
activity-based metrics on the whole?

02:05:13.309 --> 02:05:14.887
<v ->Couldn't agree with you more.</v>

02:05:14.887 --> 02:05:15.887
<v ->Thank you.</v>

02:05:20.273 --> 02:05:22.984
I'll leave it there, thank you.

02:05:22.984 --> 02:05:25.091
<v Judge>Thank you.</v>

02:05:25.091 --> 02:05:27.437
Commissioner Rechtschaffen, you had a few questions?

02:05:27.437 --> 02:05:28.331
<v Rechtschaffen>I do thank you.</v>

02:05:28.331 --> 02:05:29.843
Thank you Ms. Brownell

02:05:29.843 --> 02:05:31.637
for your testimony.
<v ->Nice to be back.</v>

02:05:31.637 --> 02:05:33.298
<v Rechtschaffen>Nice to see you again.</v>

02:05:33.298 --> 02:05:36.582
Do you have a view about how regionalization

02:05:36.582 --> 02:05:39.915
of PG's operations could improve safety?

02:05:44.161 --> 02:05:45.836
<v ->Commissioner, I think we're in the</v>

02:05:45.836 --> 02:05:47.919
early stages of planning.

02:05:48.931 --> 02:05:51.802
I have been on the board of National Grid,

02:05:51.802 --> 02:05:56.552
which has a regional structure, it's done state-by-state,

02:05:57.485 --> 02:05:58.318
and I...

02:06:03.316 --> 02:06:05.091
I think if you have the,

02:06:05.091 --> 02:06:08.413
If you build in the right structure,

02:06:08.413 --> 02:06:11.246
if you build in the right metrics,

02:06:13.375 --> 02:06:15.692
it can, and should,

02:06:15.692 --> 02:06:17.972
but overall I don't,

02:06:17.972 --> 02:06:20.714
I think the stated goal of regionalization,

02:06:20.714 --> 02:06:22.224
is to get closer to the customer,

02:06:22.224 --> 02:06:25.605
admirable, you know, all those things.

02:06:25.605 --> 02:06:27.665
I think changing safety

02:06:27.665 --> 02:06:31.773
has to be an enterprise-level initiative.

02:06:31.773 --> 02:06:34.994
I'm really pleased that we're finally getting

02:06:34.994 --> 02:06:37.000
a chief safety officer, who brings

02:06:37.000 --> 02:06:39.715
vast industrial experience, so that we can

02:06:39.715 --> 02:06:44.048
operationalize and really, really drive down metrics

02:06:47.497 --> 02:06:49.042
that change safety.

02:06:49.042 --> 02:06:51.959
So regionalization can, I can't say

02:06:53.199 --> 02:06:55.266
my current understanding of the plan,

02:06:55.266 --> 02:06:59.683
which is very early stages, that it necessarily will.

02:07:00.821 --> 02:07:02.796
I'm not being vague, I'm saying,

02:07:02.796 --> 02:07:04.200
I think it's a desirable goal,

02:07:04.200 --> 02:07:05.906
I think it depends on how you structure it,

02:07:05.906 --> 02:07:07.739
and how it's executed,

02:07:08.868 --> 02:07:11.171
but I also think this enterprise-wide.

02:07:11.171 --> 02:07:14.754
We can't have pockets of different metrics,

02:07:15.640 --> 02:07:16.932
and different perceptions,

02:07:16.932 --> 02:07:19.682
in the same way we've changed our

02:07:21.179 --> 02:07:23.628
operating risk management system,

02:07:23.628 --> 02:07:27.295
instead of at a very granular business based

02:07:31.019 --> 02:07:32.624
bureau by bureau director,

02:07:32.624 --> 02:07:36.106
it's event based, and it's much more broadly understood,

02:07:36.106 --> 02:07:37.857
and able to be measured.

02:07:37.857 --> 02:07:39.669
So I don't want to lose side of that,

02:07:39.669 --> 02:07:41.883
there are benefits to regionalization,

02:07:41.883 --> 02:07:43.231
there are challenges.

02:07:43.231 --> 02:07:44.371
<v ->Just a follow up.</v>

02:07:44.371 --> 02:07:47.094
When you said their pockets,

02:07:47.094 --> 02:07:50.483
you just referred to pockets of the company

02:07:50.483 --> 02:07:52.617
that don't follow the same metrics,

02:07:52.617 --> 02:07:54.874
I'm not sure I totally understand what you were saying.

02:07:54.874 --> 02:07:56.827
<v ->I was actually talking about risk.</v>

02:07:56.827 --> 02:07:59.995
So I was probably confusing apples and oranges.

02:07:59.995 --> 02:08:02.745
So we've moved to a better system

02:08:03.731 --> 02:08:07.481
of risk management, previously it was done at

02:08:12.768 --> 02:08:16.209
bureau level, different businesses viewed risk,

02:08:16.209 --> 02:08:18.009
and measured risk differently,

02:08:18.009 --> 02:08:19.973
in order to effectively measure risk,

02:08:19.973 --> 02:08:22.011
have to have an agreement

02:08:22.011 --> 02:08:24.732
enterprise-wide on with those risks are.

02:08:24.732 --> 02:08:27.058
So the same thing is true of safety,

02:08:27.058 --> 02:08:30.308
I think you have to have a company-wide

02:08:32.086 --> 02:08:35.682
commitment and understanding of safety,

02:08:35.682 --> 02:08:40.682
and to do that you have to have a changed leader at the top,

02:08:42.836 --> 02:08:45.288
now there are different safety metrics

02:08:45.288 --> 02:08:48.097
in gas and electric, I'm not getting that specific,

02:08:48.097 --> 02:08:51.088
but I think in order to effect change,

02:08:51.088 --> 02:08:52.896
you have to have a sustained commitment

02:08:52.896 --> 02:08:56.920
at a very senior level, with an experienced person,

02:08:56.920 --> 02:09:01.503
and I think our incoming chief safety officer has that,

02:09:03.937 --> 02:09:07.270
to really drive a dynamic in the company

02:09:09.112 --> 02:09:11.445
that just hasn't been there.

02:09:13.881 --> 02:09:16.203
<v ->I wanted to ask you a follow-up question or two</v>

02:09:16.203 --> 02:09:19.505
about your view, that you need

02:09:19.505 --> 02:09:21.773
transformational elements on the board,

02:09:21.773 --> 02:09:25.440
and Mr. Abrams asked you about that as well,

02:09:26.739 --> 02:09:29.584
just so I understand what you're suggesting,

02:09:29.584 --> 02:09:32.751
is it that transformational experience

02:09:34.203 --> 02:09:37.692
should be, or restructuring experience should be,

02:09:37.692 --> 02:09:39.425
one of the factors that are considered

02:09:39.425 --> 02:09:42.848
for all board members, or some board members,

02:09:42.848 --> 02:09:45.295
or there should be one or two people

02:09:45.295 --> 02:09:46.962
with that expertise?

02:09:48.358 --> 02:09:50.563
<v ->Sure and let me distinguish between</v>

02:09:50.563 --> 02:09:52.819
what I see as restructuring experts,

02:09:52.819 --> 02:09:56.047
and we have restructuring experts who made

02:09:56.047 --> 02:09:58.027
a terrific contribution, they are familiar

02:09:58.027 --> 02:09:59.575
with bankruptcy, they're are familiar

02:09:59.575 --> 02:10:03.142
with different financial aspects of bankruptcy,

02:10:03.142 --> 02:10:06.235
but a transformational leader, I'm thinking of someone

02:10:06.235 --> 02:10:08.681
who has been in an industry

02:10:08.681 --> 02:10:12.308
where seismic changes has occurred,

02:10:12.308 --> 02:10:16.126
you could even say somebody from Amazon,

02:10:16.126 --> 02:10:18.642
I'm not suggesting we talking anybody from Amazon,

02:10:18.642 --> 02:10:21.434
the early stages, but somebody who's seen

02:10:21.434 --> 02:10:23.506
a different way of serving customers,

02:10:23.506 --> 02:10:26.042
who knows what it takes.

02:10:26.042 --> 02:10:28.668
Having a monopoly, Mr. Abrams is right,

02:10:28.668 --> 02:10:31.351
we tend to lose sight of the customer,

02:10:31.351 --> 02:10:32.472
we talked a lot about customers,

02:10:32.472 --> 02:10:35.278
but we tend to lose sight and not touch customers

02:10:35.278 --> 02:10:38.965
in the way that a competitive business might.

02:10:38.965 --> 02:10:43.715
So I'm talking about, we're somebody who has been through

02:10:45.058 --> 02:10:50.058
IT transformations, that's a really, really complicated

02:10:50.279 --> 02:10:52.247
thing to accomplish, but we have to do that.

02:10:52.247 --> 02:10:54.837
Somebody who's been through a technology

02:10:54.837 --> 02:10:58.444
changes, industry this being changed by technology.

02:10:58.444 --> 02:11:01.777
I think a person who has that, a couple,

02:11:03.293 --> 02:11:05.156
but that would be the only skill.

02:11:05.156 --> 02:11:05.989
Does that help?

02:11:05.989 --> 02:11:07.580
<v ->Yes you answered my first question,</v>

02:11:07.580 --> 02:11:08.527
so now I have a follow-up for the

02:11:08.527 --> 02:11:09.485
second question--
<v ->Okay.</v>

02:11:09.485 --> 02:11:11.025
<v ->Which you have been discussing,</v>

02:11:11.025 --> 02:11:13.899
but is it, you review that it should be someone

02:11:13.899 --> 02:11:15.240
who's been in an industry

02:11:15.240 --> 02:11:16.865
that's gone through transformation,

02:11:16.865 --> 02:11:18.738
because the utility industry

02:11:18.738 --> 02:11:20.873
is certainly going through transformation,

02:11:20.873 --> 02:11:24.868
or someone who has transformed a company

02:11:24.868 --> 02:11:27.196
from one point to another, in other words,

02:11:27.196 --> 02:11:29.918
what do you think the biggest need is

02:11:29.918 --> 02:11:30.751
for PG&amp;E?

02:11:33.470 --> 02:11:36.407
<v ->Well the utility industry has been</v>

02:11:36.407 --> 02:11:40.126
undergoing a transformation for as long as I've been in it,

02:11:40.126 --> 02:11:42.707
and when I look at other transformation

02:11:42.707 --> 02:11:45.374
it's taking kind of a long time.

02:11:46.236 --> 02:11:48.303
So I wouldn't necessarily say

02:11:48.303 --> 02:11:50.533
someone who's transformed the energy industry,

02:11:50.533 --> 02:11:53.029
I'm thinking of maybe banking,

02:11:53.029 --> 02:11:56.015
of maybe IT, of maybe retail,

02:11:56.015 --> 02:12:00.042
who also bring that customer experience,

02:12:00.042 --> 02:12:03.336
not etched in stone, we're developing job descriptions

02:12:03.336 --> 02:12:07.753
as I said, but I think it would add value and bring a

02:12:08.679 --> 02:12:10.512
different perspective.

02:12:12.921 --> 02:12:15.754
<v ->You said that the board has authority</v>

02:12:15.754 --> 02:12:18.421
to reduce compensation, based on

02:12:19.406 --> 02:12:22.223
a catastrophic event, and you've exercised that

02:12:22.223 --> 02:12:23.728
on another board--

02:12:23.728 --> 02:12:24.771
<v ->I have.</v>
<v ->You've been on.</v>

02:12:24.771 --> 02:12:26.698
Do you happen to know if

02:12:26.698 --> 02:12:30.052
the compensation of any PG&amp;E executives was

02:12:30.052 --> 02:12:34.975
reduced as a result of the 2017, or 2018, wildfires?

02:12:34.975 --> 02:12:37.915
<v ->I don't know, I'm sorry.</v>

02:12:37.915 --> 02:12:40.564
<v ->I have one last question for you,</v>

02:12:40.564 --> 02:12:45.314
this relates to the independent safety oversight counsel,

02:12:46.444 --> 02:12:47.726
I'm trying to figure out where it fits in with

02:12:47.726 --> 02:12:50.832
everything else, so we have a chief risk officer,

02:12:50.832 --> 02:12:53.051
a chief safety officer,

02:12:53.051 --> 02:12:55.624
the safety and nuclear oversight committee,

02:12:55.624 --> 02:12:58.938
a soon to be independent safety officer,

02:12:58.938 --> 02:13:02.286
and an independent safety oversight counsel,

02:13:02.286 --> 02:13:03.138
is that correct?

02:13:03.138 --> 02:13:04.531
<v ->That's correct.</v>

02:13:04.531 --> 02:13:06.094
<v ->And are you sure that--</v>

02:13:06.094 --> 02:13:08.985
<v ->Can't get it right one way or the other.</v>

02:13:08.985 --> 02:13:09.818
<v ->Well,</v>

02:13:10.716 --> 02:13:13.194
I'm trying to figure out one...

02:13:13.194 --> 02:13:16.527
Are some of those functions duplicative?

02:13:18.792 --> 02:13:21.929
<v ->No, I actually don't think they are,</v>

02:13:21.929 --> 02:13:23.346
I think the ISOC,

02:13:24.660 --> 02:13:28.077
who's reporting to the corporation's CEO,

02:13:29.894 --> 02:13:32.620
also producing reports that will be used throughout

02:13:32.620 --> 02:13:37.120
the organization, gives just that outside perspective,

02:13:38.654 --> 02:13:40.737
the chief safety operator

02:13:41.957 --> 02:13:46.635
is gonna be responsible for identifying the rules,

02:13:46.635 --> 02:13:49.175
identifying the needs, identifying the technologies,

02:13:49.175 --> 02:13:50.701
and operationalizing those,

02:13:50.701 --> 02:13:53.044
making those part of the system.

02:13:53.044 --> 02:13:56.085
Chief risk officer, has the responsibility

02:13:56.085 --> 02:14:00.097
for enterprise risk, safety being one of them,

02:14:00.097 --> 02:14:04.889
but a massive asset failure, being another a massive IT,

02:14:04.889 --> 02:14:07.081
so they're different kinds,

02:14:07.081 --> 02:14:11.248
so they identify the risks at an enterprise level,

02:14:14.888 --> 02:14:17.305
they create the risk register

02:14:18.170 --> 02:14:21.130
we're using, currently what is commonly accepted

02:14:21.130 --> 02:14:23.731
at most companies, is a

02:14:23.731 --> 02:14:25.064
bowtie analysis,

02:14:26.051 --> 02:14:27.723
if there were safety issues

02:14:27.723 --> 02:14:31.145
recognized on that risk register,

02:14:31.145 --> 02:14:35.060
that would inform, both the safety committee,

02:14:35.060 --> 02:14:36.756
as well as the chief safety officer,

02:14:36.756 --> 02:14:40.296
and let me give one good example of kind of how

02:14:40.296 --> 02:14:43.045
that information goes back and forth.

02:14:43.045 --> 02:14:47.246
On our open audits list, when we got there,

02:14:47.246 --> 02:14:50.829
there were too many, actual safety related,

02:14:54.774 --> 02:14:59.009
open operating audits, that had gone on too long,

02:14:59.009 --> 02:15:02.421
and had no owner identified, the audit committee,

02:15:02.421 --> 02:15:06.064
which is typically populated by financial folk,

02:15:06.064 --> 02:15:10.528
said "We're not full able to kind of understand these,"

02:15:10.528 --> 02:15:12.483
"rationalize these to drive change.",

02:15:12.483 --> 02:15:14.821
Snow and the audit committee,

02:15:14.821 --> 02:15:16.734
who ultimately has responsibility,

02:15:16.734 --> 02:15:18.408
but Snow and the audit committee

02:15:18.408 --> 02:15:21.621
worked very carefully together to make sure,

02:15:21.621 --> 02:15:25.468
number one, they fully understood the risk

02:15:25.468 --> 02:15:27.558
that those open audits presented,

02:15:27.558 --> 02:15:32.104
drove closure to those, while also assigning accountability,

02:15:32.104 --> 02:15:33.365
so there is no audit now

02:15:33.365 --> 02:15:35.163
that doesn't have an owner assigned,

02:15:35.163 --> 02:15:38.616
accountability is about identifying the owner.

02:15:38.616 --> 02:15:41.116
So I think those are actually,

02:15:42.926 --> 02:15:47.926
kind of integrated, and but one is, several or Snow's

02:15:48.002 --> 02:15:51.812
oversight, the other have specific responsibilities.

02:15:51.812 --> 02:15:54.329
<v ->And the relationship between the independent safety</v>

02:15:54.329 --> 02:15:56.827
counsel, and Snow is what exactly?

02:15:56.827 --> 02:16:00.928
They're both external to the operating part of the company?

02:16:00.928 --> 02:16:02.928
<v ->Right well the ISOC is</v>

02:16:05.148 --> 02:16:07.609
an advisory board that advises management,

02:16:07.609 --> 02:16:11.233
but also whose reports will go to Snow,

02:16:11.233 --> 02:16:12.838
to see if there's anything, for example,

02:16:12.838 --> 02:16:15.604
that they recommend, and there's a remarkable similarity

02:16:15.604 --> 02:16:18.420
by the way, between what the ISOC has recommended

02:16:18.420 --> 02:16:21.345
in its recent report, and what North Star has recommended,

02:16:21.345 --> 02:16:24.023
so some of these things are already underway.

02:16:24.023 --> 02:16:26.373
Snow drive that though.

02:16:26.373 --> 02:16:28.563
<v ->Okay, thank you.</v>

02:16:28.563 --> 02:16:31.767
So has the ISOC prepared any reports so far?

02:16:31.767 --> 02:16:33.331
<v Ms. Brownell>They have just completed,</v>

02:16:33.331 --> 02:16:35.699
I think it's relatively recent, yes.

02:16:35.699 --> 02:16:37.199
<v ->Okay, thank you.</v>

02:16:38.110 --> 02:16:40.900
<v Judge>All right, thank you.</v>

02:16:40.900 --> 02:16:42.728
Mr. Weissman is there any redirect?

02:16:42.728 --> 02:16:44.300
<v Mr. Weissman>If I could just a moment please.</v>

02:16:44.300 --> 02:16:47.133
<v Judge>Let's be off the record.</v>

02:16:49.206 --> 02:16:50.426
While we're off the record,

02:16:50.426 --> 02:16:52.622
and you're taking care of things,

02:16:52.622 --> 02:16:55.475
Ms. Hogle should start getting ready.

02:16:55.475 --> 02:16:56.308
<v ->While we're off,</v>

02:16:56.308 --> 02:16:58.837
could I also just maybe offer a statement of counsel,

02:16:58.837 --> 02:17:02.194
responsive to your question Commissioner?

02:17:02.194 --> 02:17:05.444
The board did make the decision in 2018

02:17:06.983 --> 02:17:10.565
not to pay the short-term incentive in 2019.

02:17:10.565 --> 02:17:11.398
<v Woman>I'll ask him.</v>

02:17:11.398 --> 02:17:14.100
<v ->I can introduce that as a statement of counsel</v>

02:17:14.100 --> 02:17:17.240
or a (mumbles) exhibit or some.

02:17:17.240 --> 02:17:18.490
<v Judge>Okay.</v>

02:17:26.683 --> 02:17:29.683
<v Woman>Yes, as an employee, ISOC.</v>

02:17:34.249 --> 02:17:36.416
(chatter)

02:17:37.357 --> 02:17:38.190
Got it.

02:17:41.923 --> 02:17:42.756
Got it.

02:17:59.682 --> 02:18:00.515
Yes okay.

02:18:09.063 --> 02:18:11.483
No, no, I just wanna...

02:18:11.483 --> 02:18:12.316
Yeah.

02:18:27.451 --> 02:18:29.368
<v ->All right okay, okay.</v>

02:18:37.286 --> 02:18:38.119
<v ->Thank you your honor.</v>

02:18:38.119 --> 02:18:38.952
<v Judge>All right.</v>

02:18:38.952 --> 02:18:42.384
<v ->Good to have an adult supervisor, thank you Henry.</v>

02:18:42.384 --> 02:18:44.884
<v ->Let's be back on the record.</v>

02:18:45.975 --> 02:18:47.483
Mr. Weissman did you have any redirect?

02:18:47.483 --> 02:18:48.520
<v Mr. Weissman>Thank you your honor.</v>

02:18:48.520 --> 02:18:50.677
You were asked some questions

02:18:50.677 --> 02:18:53.481
about the reporting relationship of the chief ethics

02:18:53.481 --> 02:18:55.193
and compliance officer,

02:18:55.193 --> 02:18:57.739
do you wish to clarify the testimony on that topic?

02:18:57.739 --> 02:18:58.572
<v ->I do.</v>

02:18:59.456 --> 02:19:03.123
Julie Cain reports to Bill Johnson, our CEO,

02:19:04.344 --> 02:19:06.581
and she does, while she does have a legal function

02:19:06.581 --> 02:19:09.707
for purposes of investigations and all of those things,

02:19:09.707 --> 02:19:12.395
she reports to the CEO, which is an important distinction,

02:19:12.395 --> 02:19:14.395
I'm sorry I missed that.

02:19:15.396 --> 02:19:17.558
<v ->But you made some comments about</v>

02:19:17.558 --> 02:19:19.190
the extent of the Commissions role

02:19:19.190 --> 02:19:22.121
in deciding how to allocate

02:19:22.121 --> 02:19:23.414
capital,

02:19:23.414 --> 02:19:25.388
can you elaborate on your understanding

02:19:25.388 --> 02:19:27.813
of the Commissions role on that regard,

02:19:27.813 --> 02:19:29.613
with respect to capital

02:19:29.613 --> 02:19:31.804
to be spent under the wildfire mitigation plan?

02:19:31.804 --> 02:19:33.167
<v ->Yes, that's not fundable.</v>

02:19:33.167 --> 02:19:35.317
So I did not mean to suggest the Commission

02:19:35.317 --> 02:19:37.022
has no role that they've

02:19:37.022 --> 02:19:39.531
very specifically directed allocation,

02:19:39.531 --> 02:19:42.614
and we would absolutely respect that.

02:19:44.962 --> 02:19:47.049
<v ->Okay you were asked some questions about</v>

02:19:47.049 --> 02:19:49.092
the use of activity based metrics

02:19:49.092 --> 02:19:51.342
and incentive compensation,

02:19:54.504 --> 02:19:57.823
are you aware of whether the long-term incentive plan,

02:19:57.823 --> 02:20:01.828
as proposed by the company, includes activity-based metrics?

02:20:01.828 --> 02:20:04.849
<v ->It does, with apologies to Mr. Abrams,</v>

02:20:04.849 --> 02:20:08.946
it does but I think the primary focus in the

02:20:08.946 --> 02:20:11.588
direction that the compensation committee is taking

02:20:11.588 --> 02:20:14.088
is more outcome based metrics.

02:20:15.288 --> 02:20:16.559
<v Mr. Weissman>It's all I have here.</v>

02:20:16.559 --> 02:20:18.354
<v Judge>All right thank you.</v>

02:20:18.354 --> 02:20:20.203
Mr. Abrams do you have any re-cross

02:20:20.203 --> 02:20:22.713
as a result of these redirect question?

02:20:22.713 --> 02:20:23.817
<v Mr. Abrams>No I do not your honor.</v>

02:20:23.817 --> 02:20:25.326
<v Judge>All right thank you.</v>

02:20:25.326 --> 02:20:26.536
<v ->Your honor.</v>

02:20:26.536 --> 02:20:30.848
I believe, if I may, I believe that one of the

02:20:30.848 --> 02:20:32.895
redirect was in response to my question.

02:20:32.895 --> 02:20:35.360
<v Judge>My apologies, I thought we had done that already.</v>

02:20:35.360 --> 02:20:36.193
Go ahead.

02:20:36.193 --> 02:20:37.193
<v ->Thank you.</v>

02:20:39.449 --> 02:20:41.618
Ms. Brownell, with respect to the responsibility

02:20:41.618 --> 02:20:44.285
of Ms. Cain, are you saying that

02:20:45.667 --> 02:20:47.097
her reporting authority differs

02:20:47.097 --> 02:20:49.874
based on the role that she is playing in the organization?

02:20:49.874 --> 02:20:50.707
<v ->No, I'm not.</v>

02:20:50.707 --> 02:20:54.159
I was referring to the fact that her title,

02:20:54.159 --> 02:20:57.257
deputy counsel, general counsel,

02:20:57.257 --> 02:20:59.624
suggests she does have legal responsibilities,

02:20:59.624 --> 02:21:01.861
but that she reports for all purposes,

02:21:01.861 --> 02:21:04.591
to the CEO of the corporation, Bill Johnson.

02:21:04.591 --> 02:21:05.782
<v ->And for the purpose of clarity,</v>

02:21:05.782 --> 02:21:07.529
she does not report to general counsel?

02:21:07.529 --> 02:21:08.591
<v ->She does not, no.</v>

02:21:08.591 --> 02:21:10.029
<v ->Thank you.</v>
<v ->That was my correction.</v>

02:21:10.029 --> 02:21:10.862
Sorry.

02:21:12.327 --> 02:21:14.410
<v Judge>All right, thank you.</v>

02:21:14.410 --> 02:21:16.765
Any redirect Mr. Weissman?

02:21:16.765 --> 02:21:17.598
<v Mr. Weissman>No.</v>

02:21:17.598 --> 02:21:18.688
<v Judge>All right, thank you.</v>

02:21:18.688 --> 02:21:19.672
Thank you for your testimony

02:21:19.672 --> 02:21:21.060
<v Ms. Brownell>Thank you.</v>
<v ->Ms. Brownell you're excused.</v>

02:21:21.060 --> 02:21:23.060
Let's be off the record.

02:21:24.261 --> 02:21:27.428
While Ms. Brownell gets off the stand,

02:21:28.720 --> 02:21:31.553
Ms. Hogle get ready to come on up.

02:21:32.880 --> 02:21:36.297
For Ms. Hogle we're having SBUA go first,

02:21:37.938 --> 02:21:39.605
and then Mr. Abrams.

02:21:41.718 --> 02:21:42.551
<v Mr. Abrams>Sorry your honor,</v>

02:21:42.551 --> 02:21:44.108
I'm gonna need to leave.

02:21:44.108 --> 02:21:44.941
<v ->Oh okay.</v>

02:21:44.941 --> 02:21:46.804
<v Mr. Abrams>So I was hoping to be able to address</v>

02:21:46.804 --> 02:21:50.332
my procedural questions on the record,

02:21:50.332 --> 02:21:51.792
before I left.

02:21:51.792 --> 02:21:53.088
<v ->Okay.</v>

02:21:53.088 --> 02:21:54.911
So you don't have questions for Ms. Hogle?

02:21:54.911 --> 02:21:58.120
<v Mr. Abrams>I do but I have to,</v>

02:21:58.120 --> 02:21:58.953
I need to leave, I'm sorry.

02:21:58.953 --> 02:22:01.766
<v ->Okay and what is your procedural issue?</v>

02:22:01.766 --> 02:22:04.645
<v ->So I have two procedural</v>

02:22:04.645 --> 02:22:06.339
issues to bring up,

02:22:06.339 --> 02:22:09.922
one is given the fact that the TCC has been

02:22:13.169 --> 02:22:16.167
unengaged in the proceeding,

02:22:16.167 --> 02:22:18.372
I'm concerned that,

02:22:18.372 --> 02:22:21.530
and I was not expecting to be representing

02:22:21.530 --> 02:22:25.377
broad wildfire survivor, victim interest,

02:22:25.377 --> 02:22:28.266
and I think it requires a need for

02:22:28.266 --> 02:22:30.345
public participation hearings,

02:22:30.345 --> 02:22:34.266
so that the words and the voice of victims

02:22:34.266 --> 02:22:37.698
can be articulated in the proceeding,

02:22:37.698 --> 02:22:39.616
I would ask, I've already submitted,

02:22:39.616 --> 02:22:41.917
a motion for public participation,

02:22:41.917 --> 02:22:43.986
that has not been ruled upon,

02:22:43.986 --> 02:22:46.871
that, that be considered, especially given

02:22:46.871 --> 02:22:51.204
that the TCC has not been active in this proceeding.

02:22:53.859 --> 02:22:56.692
<v Judge>Okay I will allow you to</v>

02:22:57.659 --> 02:23:01.576
renew your request for a ruling on that motion.

02:23:02.950 --> 02:23:04.997
But very briefly when back on the record.

02:23:04.997 --> 02:23:07.097
And what is your second item?

02:23:07.097 --> 02:23:11.155
<v ->My second item is because there has been a number of</v>

02:23:11.155 --> 02:23:14.345
comments regarding issues with the plan,

02:23:14.345 --> 02:23:17.895
that are still in works, that we have,

02:23:17.895 --> 02:23:20.456
at least a day, if not two days,

02:23:20.456 --> 02:23:22.489
at the conclusion of the plan,

02:23:22.489 --> 02:23:26.394
when it is fully completed, for evidentiary hearings,

02:23:26.394 --> 02:23:29.061
so that a completed plan can be,

02:23:30.915 --> 02:23:34.093
we can provide cross-examination regarding a completed

02:23:34.093 --> 02:23:38.760
plan, because I understand that it's in PG&amp;E's interests

02:23:39.976 --> 02:23:43.154
to rush this process through,

02:23:43.154 --> 02:23:46.236
I don't wanna short circuit and have us pre-judge

02:23:46.236 --> 02:23:47.927
a plan that is incompleted.

02:23:47.927 --> 02:23:49.765
<v ->Okay so that one, Mr. Abrams,</v>

02:23:49.765 --> 02:23:53.450
is more appropriately done through a written motion,

02:23:53.450 --> 02:23:54.950
for that activity.

02:23:56.614 --> 02:23:57.532
<v Mr. Abrams>Okay.</v>
<v ->Yet so I'd ask you to</v>

02:23:57.532 --> 02:24:01.359
prepare it as a written motion, rather than

02:24:01.359 --> 02:24:02.882
doing it orally today.

02:24:02.882 --> 02:24:03.715
<v ->Okay.</v>

02:24:03.715 --> 02:24:04.548
<v Judge>Okay.</v>

02:24:04.548 --> 02:24:07.465
<v ->Thank you your honor.</v>
<v ->All right.</v>

02:24:09.881 --> 02:24:13.379
And do you agree to see your time

02:24:13.379 --> 02:24:17.195
related to Ms. Hogle, or would you like to go first,

02:24:17.195 --> 02:24:18.925
and stay for a few minutes, and get a few questions

02:24:18.925 --> 02:24:19.842
in for her?

02:24:21.021 --> 02:24:23.960
<v ->If someone would like my time?</v>

02:24:23.960 --> 02:24:25.100
<v Man>There's only one other party.</v>

02:24:25.100 --> 02:24:26.141
<v Judge>Yeah.</v>
<v Man>I think.</v>

02:24:26.141 --> 02:24:26.974
<v Mr. Strauss>You're welcome--</v>

02:24:26.974 --> 02:24:28.016
<v Judge>You can go first if you want.</v>

02:24:28.016 --> 02:24:29.306
<v Mr. Strauss>To take a few moments.</v>

02:24:29.306 --> 02:24:30.479
A few minutes if you wish.

02:24:30.479 --> 02:24:31.312
<v ->Yeah that's okay.</v>

02:24:31.312 --> 02:24:32.145
<v Judge>Okay.</v>

02:24:32.145 --> 02:24:33.692
<v ->I'll ask of the other (mumbles).</v>

02:24:33.692 --> 02:24:35.485
<v Judge>Ms. Hogle come on up.</v>

02:24:35.485 --> 02:24:37.068
And we'll do the...

02:24:41.203 --> 02:24:43.661
Requesting, you're requesting a prompt ruling

02:24:43.661 --> 02:24:46.820
on your motion for public participation hearing?

02:24:46.820 --> 02:24:47.741
You can be seated--
<v ->Yes.</v>

02:24:47.741 --> 02:24:49.143
<v Judge>While we're doing this.</v>

02:24:49.143 --> 02:24:50.313
<v ->Yes.</v>

02:24:50.313 --> 02:24:53.982
<v Judge>All right let's be on the record.</v>

02:24:53.982 --> 02:24:58.482
Mr. Abrams has asked to renew his request for a ruling

02:25:00.947 --> 02:25:04.923
on a motion, go ahead and please renew that request.

02:25:04.923 --> 02:25:06.390
<v ->Thank you your honor.</v>

02:25:06.390 --> 02:25:07.703
I'd like to renew my request

02:25:07.703 --> 02:25:10.266
for public participation hearing,

02:25:10.266 --> 02:25:14.131
given that the TCC has not engaged in this proceeding,

02:25:14.131 --> 02:25:17.776
and the voices of victims have been largely absent

02:25:17.776 --> 02:25:20.016
from the proceeding, I think it's important

02:25:20.016 --> 02:25:22.724
that we hold public participation hearings

02:25:22.724 --> 02:25:26.195
and we actively seek the engagement of victims,

02:25:26.195 --> 02:25:28.769
and the question they have around this plan

02:25:28.769 --> 02:25:30.643
of reorganization.

02:25:30.643 --> 02:25:32.601
<v Judge>And it's my understanding that you have filed</v>

02:25:32.601 --> 02:25:34.880
a written motion along these lines?

02:25:34.880 --> 02:25:35.874
<v ->Yes I have your honor.</v>

02:25:35.874 --> 02:25:36.765
<v Judge>Okay, thank you,</v>

02:25:36.765 --> 02:25:40.949
and I will bring it back to the attention

02:25:40.949 --> 02:25:42.594
of the Administrative Law Judge,

02:25:42.594 --> 02:25:43.946
and the assigned Commissioner,

02:25:43.946 --> 02:25:46.605
and await their ruling on that motion.

02:25:46.605 --> 02:25:47.438
<v ->Thank you your honor.</v>

02:25:47.438 --> 02:25:48.923
<v Judge>All right thank you.</v>

02:25:48.923 --> 02:25:52.595
At this time we will begin with cross-examine,

02:25:52.595 --> 02:25:55.574
we will call to the stand Ms. Hogle,

02:25:55.574 --> 02:25:59.463
on behalf of Pacific Gas and Electric company.

02:25:59.463 --> 02:26:01.550
Ms. Hogle please stand.

02:26:01.550 --> 02:26:03.153
And raise your right hand,

02:26:03.153 --> 02:26:04.715
do you solemnly swear or affirm,

02:26:04.715 --> 02:26:05.945
that the testimony you're about to give,

02:26:05.945 --> 02:26:07.405
shall be the truth, the whole truth,

02:26:07.405 --> 02:26:08.555
and nothing but the truth?

02:26:08.555 --> 02:26:09.462
<v ->Yes.</v>

02:26:09.462 --> 02:26:11.385
<v Judge>Thank you.</v>

02:26:11.385 --> 02:26:12.762
Please be seated, and state your name

02:26:12.762 --> 02:26:15.310
and place of business for the record.

02:26:15.310 --> 02:26:16.980
<v ->My name is Jessica Hogle,</v>

02:26:16.980 --> 02:26:20.944
my place of business is PG&amp;E corporation.

02:26:20.944 --> 02:26:22.310
<v Judge>Okay, thank you.</v>

02:26:22.310 --> 02:26:23.143
Mr. Weissman?

02:26:23.143 --> 02:26:26.229
<v Mr. Weissman>Actually my colleague, Teresa Reed Dippo</v>

02:26:26.229 --> 02:26:27.312
will examine.

02:26:28.243 --> 02:26:29.432
<v Judge>Let's be off the record.</v>

02:26:29.432 --> 02:26:30.452
Can you give a spelling of your name?

02:26:30.452 --> 02:26:32.220
'Cause you're not Mr. Rutten.

02:26:32.220 --> 02:26:33.232
<v Ms. Dippo>No I'm Not.</v>

02:26:33.232 --> 02:26:38.232
T-E-R-E-S-A R-E-E-D D-I-P-P-O.

02:26:39.442 --> 02:26:41.224
<v Judge>D-I-P.</v>

02:26:41.224 --> 02:26:42.494
<v Ms. Dippo>P-O.</v>

02:26:42.494 --> 02:26:44.827
<v Judge>O, okay thank you.</v>

02:26:46.411 --> 02:26:48.744
Let's be back on the record.

02:26:49.591 --> 02:26:50.424
Please proceed.

02:26:50.424 --> 02:26:52.481
<v ->Ms. Hogle, do you have in front of you PG&amp;E</v>

02:26:52.481 --> 02:26:55.600
prepared testimony, volume one, which has been marked as

02:26:55.600 --> 02:26:56.433
PG&amp;E one?

02:26:57.352 --> 02:26:58.185
<v ->Yes.</v>

02:26:59.505 --> 02:27:04.505
<v ->And can you turn to chapter nine of that testimony please?</v>

02:27:25.222 --> 02:27:26.055
Let me ask you, yeah.
<v Judge>Let be off</v>

02:27:26.055 --> 02:27:27.268
the record.

02:27:27.268 --> 02:27:30.833
I think you're in the wrong document.

02:27:30.833 --> 02:27:33.086
That's the plan of reorganization.

02:27:33.086 --> 02:27:35.313
(laughing)

02:27:35.313 --> 02:27:36.730
Okay.
<v ->I'm sorry.</v>

02:27:45.961 --> 02:27:47.703
<v Judge>Let's be back on the record.</v>

02:27:47.703 --> 02:27:49.999
<v ->Are you sponsoring chapter nine of that testimony,</v>

02:27:49.999 --> 02:27:54.028
page one, line one, through page 16, line 12?

02:27:54.028 --> 02:27:55.172
<v ->Yes.</v>

02:27:55.172 --> 02:27:57.848
<v ->Was that chapter prepared by you or under your direction?</v>

02:27:57.848 --> 02:27:58.762
<v ->Yes.</v>

02:27:58.762 --> 02:28:00.489
<v ->Have there been any updates or corrections</v>

02:28:00.489 --> 02:28:01.322
to that chapter?

02:28:01.322 --> 02:28:02.155
<v ->No.</v>

02:28:02.155 --> 02:28:03.428
<v ->Is your testimony true and correct</v>

02:28:03.428 --> 02:28:04.471
to the best of your knowledge?

02:28:04.471 --> 02:28:05.342
<v ->Yes.</v>

02:28:05.342 --> 02:28:07.469
<v ->Ms. Hogle is available for cross-examination.</v>

02:28:07.469 --> 02:28:10.363
<v Judge>All right, thank you.</v>

02:28:10.363 --> 02:28:11.894
Mr. Strauss?

02:28:11.894 --> 02:28:13.115
<v ->Thank you your honor.</v>

02:28:13.115 --> 02:28:15.032
Ms. Hogle my name is Ariel Strauss,

02:28:15.032 --> 02:28:17.704
I'm counsel to Small Business Utility Advocates,

02:28:17.704 --> 02:28:20.199
advocates on behalf, interests of small business,

02:28:20.199 --> 02:28:23.019
and small load commercial customers.

02:28:23.019 --> 02:28:25.504
I'm sorry for bring you here just for this one question,

02:28:25.504 --> 02:28:27.087
but my question is,

02:28:28.559 --> 02:28:30.314
in light of the wildfires,

02:28:30.314 --> 02:28:32.342
and the release of greenhouse gases

02:28:32.342 --> 02:28:35.940
from those fires, and the diminishment of vegetation

02:28:35.940 --> 02:28:39.227
by those fires, has PG&amp;E adjusted

02:28:39.227 --> 02:28:43.394
it's greenhouse gas emissions, mitigation programs

02:28:44.361 --> 02:28:46.559
to account for that.

02:28:46.559 --> 02:28:48.534
<v ->So right, I think I'll say that the best way</v>

02:28:48.534 --> 02:28:51.601
to address greenhouse gas emissions from wildfires

02:28:51.601 --> 02:28:53.778
is to prevent wildfires form occurring,

02:28:53.778 --> 02:28:56.030
there's a chapter, chapter six,

02:28:56.030 --> 02:28:57.702
that describes all the actions that we're

02:28:57.702 --> 02:28:59.387
taking for that.

02:28:59.387 --> 02:29:02.010
Beyond that, as it related to meeting climate goals,

02:29:02.010 --> 02:29:05.566
California has very stringent climate goals in place,

02:29:05.566 --> 02:29:07.969
PG&amp;E is committed to beating those goals,

02:29:07.969 --> 02:29:10.060
this plan puts us on good footing

02:29:10.060 --> 02:29:12.239
to be able to continue to do that.

02:29:12.239 --> 02:29:15.572
So we will meet the 80% reductions,

02:29:16.577 --> 02:29:18.432
below 1990 levels by 2050,

02:29:18.432 --> 02:29:21.165
and the related renewable portfolio standard

02:29:21.165 --> 02:29:24.435
requirements of that, those goals.

02:29:24.435 --> 02:29:26.456
<v ->Thank you, I will note that as a no,</v>

02:29:26.456 --> 02:29:28.451
to respond to my question.

02:29:28.451 --> 02:29:30.875
<v ->I am not aware of any specific activities</v>

02:29:30.875 --> 02:29:33.565
to account for wildfire emissions.

02:29:33.565 --> 02:29:34.398
<v Mr. Strauss>Thank you.</v>
<v ->I am of what</v>

02:29:34.398 --> 02:29:36.565
we're doing going forward.

02:29:37.603 --> 02:29:38.741
<v Mr. Strauss>That is all your honor.</v>

02:29:38.741 --> 02:29:41.738
<v Judge>Okay, is there any redirect Mr. Weissman?</v>

02:29:41.738 --> 02:29:43.354
I'm sorry Ms. Reed Dippo?

02:29:43.354 --> 02:29:44.187
<v Ms. Dippo>No.</v>

02:29:44.187 --> 02:29:46.252
<v Judge>All right thank you.</v>

02:29:46.252 --> 02:29:48.047
All right well that was quick.

02:29:48.047 --> 02:29:50.023
Thank you for your testimony today Ms. Hogle,

02:29:50.023 --> 02:29:50.990
you're excused.
<v Ms. Hogle>Thank you.</v>

02:29:50.990 --> 02:29:54.603
<v Judge>Let's be off the record.</v>

02:29:54.603 --> 02:29:55.436
<v ->Sorry.</v>

02:29:56.475 --> 02:29:58.308
<v Judge>Go ahead.</v>

02:29:58.308 --> 02:30:00.168
<v ->I was just wondering, just to follow-up</v>

02:30:00.168 --> 02:30:03.150
on that (mumbles) we've had, didn't want to state

02:30:03.150 --> 02:30:04.110
the record or?

02:30:04.110 --> 02:30:06.414
<v Judge>Yes I think we'll do that.</v>

02:30:06.414 --> 02:30:10.914
So, before I would like to let the court reporters go,

02:30:12.339 --> 02:30:14.666
I think that the primary thing

02:30:14.666 --> 02:30:17.900
is that we need to get on the record,

02:30:17.900 --> 02:30:20.505
before the end of today is,

02:30:20.505 --> 02:30:22.602
and then we will continue talking

02:30:22.602 --> 02:30:24.869
about some of the scheduling related things,

02:30:24.869 --> 02:30:26.536
but it is, what time

02:30:29.577 --> 02:30:31.187
we're starting on Monday?

02:30:31.187 --> 02:30:32.607
(laughing)

02:30:32.607 --> 02:30:34.407
and who the witness is on Monday,

02:30:34.407 --> 02:30:35.907
that is the first witness,

02:30:35.907 --> 02:30:37.605
that I'd like to get on the record,

02:30:37.605 --> 02:30:39.601
and then everything else we will try

02:30:39.601 --> 02:30:40.936
to plan out more of next week.

02:30:40.936 --> 02:30:42.394
<v Mr. Weissman>Sure.</v>

02:30:42.394 --> 02:30:44.005
<v Judge>After I excuse the court reporter.</v>

02:30:44.005 --> 02:30:44.838
<v Mr. Weissman>Okay.</v>

02:30:44.838 --> 02:30:46.514
<v ->Is there anything else besides that.</v>

02:30:46.514 --> 02:30:50.737
<v ->Sorry, I had, I think there were four outstanding</v>

02:30:50.737 --> 02:30:54.218
statements of counsel that (mumbles) to make,

02:30:54.218 --> 02:30:55.953
there was a (mumbles) request,

02:30:55.953 --> 02:30:58.536
for (mumbles).

02:31:05.211 --> 02:31:06.278
<v ->Okay, but is there any other</v>

02:31:06.278 --> 02:31:08.441
things, besides those statements of counsel?

02:31:08.441 --> 02:31:10.170
<v Mr. Long>The only other question your honor,</v>

02:31:10.170 --> 02:31:12.973
was when you want us to move in exhibits

02:31:12.973 --> 02:31:14.420
for cross-examination?

02:31:14.420 --> 02:31:15.753
<v ->Okay.</v>

02:31:15.753 --> 02:31:19.327
<v ->We have not done that for any witness yet.</v>

02:31:19.327 --> 02:31:22.408
<v ->Right my understanding is there's only been one</v>

02:31:22.408 --> 02:31:24.884
exhibit that was moved in to evidence.

02:31:24.884 --> 02:31:26.717
<v Mr. Long>Yeah.</v>

02:31:26.717 --> 02:31:28.050
<v ->I know it's my personal practice</v>

02:31:28.050 --> 02:31:30.080
to wait until the end of the proceeding,

02:31:30.080 --> 02:31:31.176
and do the moving then,

02:31:31.176 --> 02:31:34.649
I think I'd rather leave that to L.J.Alan

02:31:34.649 --> 02:31:36.399
to take care of that.

02:31:37.260 --> 02:31:39.510
If there's no objection to that approach.

02:31:39.510 --> 02:31:40.343
<v Mr. Long>That's fine,</v>

02:31:40.343 --> 02:31:42.064
from TURNS perspective, I just wanted to make sure

02:31:42.064 --> 02:31:43.536
weren't missing a boat on that.

02:31:43.536 --> 02:31:44.482
<v ->Right I don't think you,</v>

02:31:44.482 --> 02:31:46.382
I don't think anybody's missing the boat on that one.

02:31:46.382 --> 02:31:47.942
<v Mr. Long>Okay.</v>

02:31:47.942 --> 02:31:48.847
<v ->Okay so,</v>

02:31:48.847 --> 02:31:51.454
we'll do the statements of counsel,

02:31:51.454 --> 02:31:55.012
we'll also do a start time from Monday,

02:31:55.012 --> 02:31:56.090
and the first witness.

02:31:56.090 --> 02:31:57.340
So, start time?

02:32:00.500 --> 02:32:01.583
<v Man>8:30?</v>

02:32:03.532 --> 02:32:04.585
<v ->8:30?</v>

02:32:04.585 --> 02:32:06.730
Is that what people want?

02:32:06.730 --> 02:32:10.339
<v Mr. Weissman>I'm just worried about having (mumbles).</v>

02:32:10.339 --> 02:32:11.325
<v ->But look, you didn't think we we're</v>

02:32:11.325 --> 02:32:12.333
gonna get through this today.

02:32:12.333 --> 02:32:15.864
<v Mr. Long>That's true.</v>
(laughing)

02:32:15.864 --> 02:32:17.183
<v Mr. Weissman>You were right, I was wrong.</v>

02:32:17.183 --> 02:32:18.985
(laughing)

02:32:18.985 --> 02:32:20.133
<v Judge>Okay.</v>

02:32:20.133 --> 02:32:22.466
So does everybody want 8:30?

02:32:23.477 --> 02:32:25.817
So I will just pause it.
<v Man>I would vote for nine.</v>

02:32:25.817 --> 02:32:27.050
<v ->I will pause it for the record,</v>

02:32:27.050 --> 02:32:28.158
that if we start at 8:30,

02:32:28.158 --> 02:32:30.216
it's gonna be me starting.

02:32:30.216 --> 02:32:34.461
'Cause I don't know yet whether Bale J Alan

02:32:34.461 --> 02:32:37.982
is gonna be sufficient, available on Monday,

02:32:37.982 --> 02:32:42.472
he will let me know on Sunday how he's feeling.

02:32:42.472 --> 02:32:45.440
But in any event I suspect if it's the earlier time,

02:32:45.440 --> 02:32:48.014
I will start out and if he is available on Monday,

02:32:48.014 --> 02:32:51.614
he will come in and then take back over.

02:32:51.614 --> 02:32:53.644
If we do nine o'clock, there's more likely that

02:32:53.644 --> 02:32:55.811
it'll be him starting, so,

02:32:57.055 --> 02:33:00.305
pick your poison.
(laughing)

02:33:00.305 --> 02:33:03.343
<v Man>(mumbles) half hour (mumbles) big a difference.</v>

02:33:03.343 --> 02:33:05.360
(mumbles)

02:33:05.360 --> 02:33:06.354
(laughing)

02:33:06.354 --> 02:33:07.619
<v ->As much as we</v>

02:33:07.619 --> 02:33:08.556
have enjoyed your

02:33:08.556 --> 02:33:09.998
presiding over proceedings.
(laughing)

02:33:09.998 --> 02:33:11.774
I would suggest 9:00 AM

02:33:11.774 --> 02:33:13.749
<v ->All right so 9:00 AM okay?</v>

02:33:13.749 --> 02:33:16.248
I'm not guaranteeing it will be him,

02:33:16.248 --> 02:33:18.151
but if he's not feeling well it'll still be me,

02:33:18.151 --> 02:33:20.812
but I think it's more likely that way.

02:33:20.812 --> 02:33:22.774
Okay so let's do nine o'clock.

02:33:22.774 --> 02:33:26.441
And then, who is our first victim on Monday?

02:33:28.627 --> 02:33:29.460
Oh sorry.
<v Mr. Weissman>Do you wanna</v>

02:33:29.460 --> 02:33:32.120
do this after the reporters leave?

02:33:32.120 --> 02:33:33.480
<v ->Well I would like to get who the first witness is--</v>

02:33:33.480 --> 02:33:34.601
<v Mr. Weissman>Put it on the record.</v>

02:33:34.601 --> 02:33:35.916
<v ->On the record.</v>
<v Mr. Weissman>Got it.</v>

02:33:35.916 --> 02:33:40.416
<v Man>I know that (mumbles) Monday.</v>

02:33:43.005 --> 02:33:45.414
<v ->Yeah, I know Ms. Yapp isn't only available</v>

02:33:45.414 --> 02:33:47.113
on Monday is my understanding,

02:33:47.113 --> 02:33:49.892
if we would like to have that be the thing,

02:33:49.892 --> 02:33:51.521
I will--

02:33:51.521 --> 02:33:53.688
(mumbles)

02:33:54.834 --> 02:33:56.890
<v Mr. Weissman>So we were, our plan</v>

02:33:56.890 --> 02:34:00.486
has been to call Ms. Cain, Julie Cain,

02:34:00.486 --> 02:34:03.209
as our first witness on Monday,

02:34:03.209 --> 02:34:05.128
and then from there we would go to,

02:34:05.128 --> 02:34:07.366
what we're referring to as, the wildfire

02:34:07.366 --> 02:34:08.866
chapter six panel.

02:34:09.988 --> 02:34:11.628
There's three witness who're sponsoring

02:34:11.628 --> 02:34:13.172
different parts of chapter six,

02:34:13.172 --> 02:34:17.922
and the discussed Bale J Alan (mumbles).

02:34:19.175 --> 02:34:20.383
<v ->Okay and then--</v>
<v ->Then Cathy Yapp after that.</v>

02:34:20.383 --> 02:34:22.656
<v ->And then we can do Ms. Yapp after that.</v>

02:34:22.656 --> 02:34:26.489
So, the proposal then from PG&amp;E is to do Cain,

02:34:29.888 --> 02:34:32.971
chapter six panel, and then Ms. Yapp.

02:34:36.029 --> 02:34:36.862
<v Mr. Weissman>Right.</v>

02:34:36.862 --> 02:34:41.862
Panel it's Powell, (mumbles) and (mumbles).

02:34:52.840 --> 02:34:57.840
<v ->Okay is that an agreeable preliminary order for everybody?</v>

02:34:59.341 --> 02:35:00.331
(mumbles)

02:35:00.331 --> 02:35:01.802
Well she, I mean, as long as Ms. Yapp is done.

02:35:01.802 --> 02:35:03.791
<v ->Monday yeah.</v>
<v ->I think on Monday,</v>

02:35:03.791 --> 02:35:05.374
that, that is fine.

02:35:06.993 --> 02:35:08.743
<v ->Those, I mean if we</v>

02:35:09.756 --> 02:35:13.673
run short, if we have time, we could talk about

02:35:15.908 --> 02:35:19.158
Mr. Spansky (mumbles).

02:35:21.178 --> 02:35:22.011
<v ->Well let's--</v>
<v ->Monday.</v>

02:35:22.011 --> 02:35:23.003
I think this is far enough for

02:35:23.003 --> 02:35:23.836
purposes of getting it on the record.

02:35:23.836 --> 02:35:25.583
<v ->Okay sure.</v>
<v ->And we'll do a little bit</v>

02:35:25.583 --> 02:35:27.499
discussion after that.

02:35:27.499 --> 02:35:28.332
Okay.

02:35:31.648 --> 02:35:33.880
Let's be back on the record.

02:35:33.880 --> 02:35:34.999
While we were off the record,

02:35:34.999 --> 02:35:37.447
we had a brief discussion,

02:35:37.447 --> 02:35:40.780
we will reconvene on Monday at 9:00 AM

02:35:42.232 --> 02:35:44.938
The preliminary set of witnesses,

02:35:44.938 --> 02:35:46.842
and we will have further discussion on that,

02:35:46.842 --> 02:35:50.039
is that the first witness that will be up,

02:35:50.039 --> 02:35:53.057
is witness Cain, followed by

02:35:53.057 --> 02:35:57.405
a panel, of three people, that are sponsoring chapter six,

02:35:57.405 --> 02:35:59.988
of volume, of exhibit PG&amp;E one,

02:36:00.836 --> 02:36:03.586
Powell, Pender and Mark Tuckalom,

02:36:05.188 --> 02:36:09.342
and then Ms. Yapp who has a date certain for CLECA,

02:36:09.342 --> 02:36:12.455
will be completed on Monday.

02:36:12.455 --> 02:36:14.206
We'll add some people to it just to know

02:36:14.206 --> 02:36:17.435
the order for the, starting on the order for

02:36:17.435 --> 02:36:18.904
rest of the week.

02:36:18.904 --> 02:36:20.500
We also have a few statements of counsel,

02:36:20.500 --> 02:36:22.245
that are follow ups that I had requested

02:36:22.245 --> 02:36:24.284
over the course of the last day or so.

02:36:24.284 --> 02:36:25.117
Mr. Weissman?

02:36:25.117 --> 02:36:26.069
<v ->Thank you your honor.</v>

02:36:26.069 --> 02:36:28.350
First a question was raised about

02:36:28.350 --> 02:36:31.938
the various capital structure adjustment,

02:36:31.938 --> 02:36:34.272
that PG&amp;E is proposing,

02:36:34.272 --> 02:36:36.855
and those appear in PG&amp;E seven,

02:36:40.028 --> 02:36:43.445
on pages two-22, and two-22 A, so this is

02:36:46.230 --> 02:36:49.647
just to explain, this is the amendment to

02:36:52.292 --> 02:36:53.959
Mr. Wells testimony,

02:36:55.457 --> 02:36:57.999
that addresses the three adjustments

02:36:57.999 --> 02:37:02.544
to the capital structure that are being requested.

02:37:02.544 --> 02:37:07.377
Second, a request, a question was raised as to whether the

02:37:08.800 --> 02:37:13.709
bridge bone commitment, who are PG&amp;E corporation is

02:37:13.709 --> 02:37:14.542
in the record,

02:37:14.542 --> 02:37:17.398
we had a discussion about the utility (mumbles),

02:37:17.398 --> 02:37:20.565
the answer is no, the PG&amp;E corporation

02:37:21.529 --> 02:37:24.825
bridge is not in the record because they're not seeking

02:37:24.825 --> 02:37:28.215
approval for it, it's not a utility obligation,

02:37:28.215 --> 02:37:29.919
it is however a public document that is

02:37:29.919 --> 02:37:34.711
been filed with the bankruptcy (mumbles).

02:37:34.711 --> 02:37:36.743
Third of all, a question was raised,

02:37:36.743 --> 02:37:39.393
I believe by Commissioner Rechtschaffen,

02:37:39.393 --> 02:37:41.694
as to, or maybe it was you, sorry,

02:37:41.694 --> 02:37:45.506
as to the list of the 2017 and 2018,

02:37:45.506 --> 02:37:49.546
fires that appears in the plan of reorganization,

02:37:49.546 --> 02:37:51.152
as exhibit A,

02:37:51.152 --> 02:37:56.152
and plan of reorganization has been filed in the docket.

02:37:56.637 --> 02:38:01.254
Fourth, Commissioner Rechtschaffen asked a question about

02:38:01.254 --> 02:38:03.421
whether there had been any

02:38:06.821 --> 02:38:09.345
deduction in incentive compensation as a result

02:38:09.345 --> 02:38:11.595
of the 2017 and 2018 fires,

02:38:13.008 --> 02:38:16.324
and I would report that in 2018,

02:38:16.324 --> 02:38:21.324
the board decided not to pay anything on the short-term

02:38:21.407 --> 02:38:24.100
incentive (mumbles).

02:38:24.100 --> 02:38:25.933
<v ->All right thank you.</v>

02:38:27.409 --> 02:38:29.171
Let's be off the record.

02:38:29.171 --> 02:38:32.535
Okay before we send the reporters home,

02:38:32.535 --> 02:38:37.035
anything else that we need to get on the record today?

02:38:37.973 --> 02:38:42.040
Okay don't leave right away when I go off the record okay?

02:38:42.040 --> 02:38:44.072
Let's be back on the record.

02:38:44.072 --> 02:38:46.775
All right this concludes our business for today,

02:38:46.775 --> 02:38:47.678
thank you everybody,

02:38:47.678 --> 02:38:49.139
it's been a very long day,

02:38:49.139 --> 02:38:53.516
and I appreciate people being as concise as they could be

02:38:53.516 --> 02:38:56.510
in their questioning and answers,

02:38:56.510 --> 02:39:00.245
with that, today's evidentiary hearing is adjourned,

02:39:00.245 --> 02:39:03.459
and we will reconvene on Monday at 9:00 AM

02:39:03.459 --> 02:39:04.709
Off the record.