Resilience

The Epitome of Failure – Part 1

by William H. Austin

At about 6:15 a.m. on 8 November 2018, an iron hook holding up a 115,000-volt line broke, dropping the live wire and sparking a blaze. Thirty minutes later, what would come to be known as the Camp Fire was out of control. Officials ordered the evacuation of the nearby town of Paradise, home to 26,000 people. The town was soon burned to the ground. Within hours, the fire destroyed 13,893 homes and killed more people (85), than any other California wildfire.

William Austin headshotThis article chronicles the story of a mega-disaster. However, it turns out the Camp Fire was just one piece of a much larger catastrophe that began a decade before. Part one of a three-part feature begins here.

The Villain Evolves

While most who live in highly populated areas of America are dealing with the COVID-19 pandemic, responders in California and many areas of the great Northwest are beginning preparation for the coming annual fire season. California officials know from experience and academic studies from consultants, prestigious universities, and governmental agencies what to expect.

Beginning with the dry and windy conditions that are sure to come in just a few months, the nation’s most populous state may face more risk than previously imagined. Add to the coming firestorm such factors as:

  • The fire season being longer than it was 40 years ago;
  • The impact of the changing climate on soil moisture; and
  • Approximately a fourth of the population now living in the wildland-urban interface.

With these three factors, it is easy to see the potential for disastrous fires to occur. Some of the most recent fires have even followed the same path of previous major fires, except for one major point…there are thousands of homes and businesses in the way that were not there in years past.

State and federal foresters have increased the number of controlled burns and allowed increased logging in efforts to limit the fire load. Most experts would argue that it has not yet made much of a difference in resolving the problem.

One of the major utility companies in California is Pacific Gas and Electric (PG&E), which provides service in most of the central and northern areas of the state. Headquartered in San Francisco, PG&E has become the villain in this story. But first, here is a short background sketch to help clarify how the situation has gone from bad to worse and many would argue how PG&E has become the epitome of failure.

Camp Fire. Source: NASA, 8 November 2018.Camp Fire. Source: NASA, 8 November 2018.
 

History of PG&E

PG&E, like many major organizations, has and is suffering through major changes brought on over the past two decades. Aging infrastructure, dated technology, distractions from constant growth in California, climate change, governmental pressure (such as green-energy mandates, consumer concerns, and legal battles), and a deteriorating public image have all had a severe impact on the company.

PG&E covers a utility service area that contains 70,000 square miles. By comparison, that is equal in size to the state of North Dakota and just misses equaling the entire New England area of the United States, which has six states.

Currently in their second bankruptcy in the past ten years, PG&E has caused many officials, regulators, and the general public to question PG&E’s competence and its ability to safely function in today’s demanding environment. Many consumers openly question if PG&E may be too large to continue safe operations.

The California Camp Fire on 8 November 2018 was the 408th of the year started by PG&E powerline failures and the 1,961st reported since 2014.

Aging infrastructure currently tops the utility’s list of problems. Yet, while replacement and repair funds have increased about 50% over the last few years, the changing leadership direction and past strategic plans seem to be tone-deaf to its crucial impact on success. In fact, leadership philosophy over the past decade has ranged from maximizing cost-saving efforts designed to improve the stock price, to failed political moves, such as proposition 16. Of course, the obligatory “back to basics” program appeared regularly, as well as the constant program of annual rate increases. For sure, all forms of the company’s reimaging efforts did not change the public perception.

During this same period, PG&E and other state utilities experienced what has become the expected fire activity during a normal fire season. Then, on 9 September 2010, San Bruno, California experienced a huge gas line explosion. Over 200 firefighters responded to the 8-Alarm blaze. Eight people died and 38 homes were destroyed. PG&E’s future changed for the worse.

Legal Battles           

In the months following the San Bruno explosion, PG&E took a proverbial beating by the local government, state regulators, the media, and the public in general. Federal prosecutors filed criminal charges against PG&E on 14 April 2011 for “knowingly and willfully” failing to maintain gas pipeline records. In early 2015, state regulators levied a $1.6 billion fine, which was the largest penalty ever charged against a utility in the state. The good news was that no PG&E employees were personally charged. With no one to file criminal charges against, the situation seemed to gradually change. The prosecutors dropped the charges and a judge reduced the maximum liability for the company to only $6 million. However, there was an outcry from citizens who thought that PG&E was not being held accountable. PG&E was forced to file for bankruptcy because of the state fine. Shares of PG&E stock fell 8% within days after the explosion, and the company’s value dropped $1.57 billion.

PG&E was also placed on federal probation, overseen by a U.S. district judge. The National Transportation Safety Board began an investigation and ruled in January 2011 that they found numerous defective welds in the San Bruno pipeline. A few months later in 2011, the chief executive officer left the company with little fanfare and a sizeable payout.

During the next few years, PG&E would try various new leaders and philosophies, turning to solar and green-energy programs to move into the future as a viable entity. Executives buried themselves in the details of running the utility, managing the legal requirements of the first bankruptcy, dealing with increasing regulatory requirements, and facing an ever-increasing wildfire environment in the state. The state of California added new regulations, which required utilities to report fires that they started.

The Camp Fire on 8 November 2018 was the 408th of the year started by PG&E powerline failures and the 1,961st reported since 2014.

The story continues in part two of this article.

William H. Austin, DABCHS, CFO, CHS-V, MIFire, currently teaches in the Emergency Management master’s degree program at the University of New Haven in Connecticut (2016-present). He formed his own consulting firm, The Austin Group LLC in 2011. He served as fire chief of West Hartford, CT (1996-2011), and as the fire chief of Tampa, FL (1985-1995). He has a master’s degree in security studies (defense and homeland security) from the United States Naval Postgraduate School (2006) and a master’s degree in public administration from Troy State University (1993). He is a member of the Preparedness Leadership Council and has served on various governing councils both in Florida and Connecticut.