WEBVTT
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This is the time and place
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for the further evidentiary hearing
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in investigation 1909016.
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My name is Michele Cook.
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I'm an assistant chief Administrative Law Judge
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at the California Public Utilities Commission
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and I am filling in for Administrative Law Judge Peter Allen
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who is the assigned ALJ.
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Before we got started on the record today
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we have gone over various procedural matters
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related to adjusting the schedule and things like that,
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which we will provide an update on later today.
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At this point I'm going to cover a few paperwork items.
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At this time I will mark for identification
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as Exhibit A4NR-X3.
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The Alliance for Nuclear Responsibility
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cross-examination exhibit form 10K.
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This was used during proceedings earlier this week
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but we neglected to identify it for the record.
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At this time I will mark for identification as A4NR-2C,
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a confidential page 18 of A4NR-2.
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It's a replacement for that page.
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At this time I will mark for identification
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as exhibit Abrams-6.
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The opening testimony on non-financial issues related to
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the proposed plan for resolution of
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voluntary case pursuant to chapter 11
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of the Bankruptcy Code by Pacific Gas & Electric Company.
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This is Mr Abrams opening testimony
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dated December 13th, 2019.
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At this time I will mark for identification
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as exhibit Abrams-cross, I'm sorry.
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Abrams-X7.
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Abrams cross-examination exhibit,
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a statement of Governor Newsom.
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Which is a statement
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submitted in the federal bankruptcy case.
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At this time I will mark for identification
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as exhibit Abrams-X8.
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The Abrams cross examination exhibit
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objection of Governor Newsom,
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which is also a document filed
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in the federal bankruptcy case.
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At this time I will mark for identification
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as exhibit SBU-X2.
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Cross-examination hearing exhibit PG&E risk register,
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which is a document
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that is a data response to a SBUA data request.
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Okay.
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At this time I would just like to remind everybody
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that we have a court reporter
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and so please speak clearly for the record.
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In addition we are webcasting today
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so please speak into the microphones
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and for all these reasons,
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please don't talk over one another
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and those preliminary ground rules.
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We have a very tight schedule,
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please limit your questions to things
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within the scope of this proceeding,
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not other proceedings that might be related
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to PG&E's bankruptcy and we'll be working as quickly
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through all the questioning as we can today.
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At this time we will resume with
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cross-examination of witnesses Veasy.
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Mr Vesey I remind you that you remain under oath.
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We will start with less examination by CLECA, Miss Sheriff.
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Thank you your Honor.
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Good morning, Mr Vesey.
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Good morning.
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My name is Nora Sheriff, I represent
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the California Large Energy Consumers Association or CLECA.
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CLECA is made up of large manufacturing customers
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of PG&E and Southern California Edison.
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I'm going to ask you first a question about
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how a statement in one of your colleagues testimony
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applies to PG&E, which I hope you can answer
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as head of the utility.
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At page 5-31 line eight,
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your colleague states that the quote,
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"Risk of not having an effective records
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"and information management program
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"may result in the failure to properly construct,
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"operate and maintain a safe system
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"potentially leading to property damage
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"or even loss of life."
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Has this proven to be true for PG&E?
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I think the premise that accurate and sound records
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are key and fundamental to safe operations is correct.
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Has PG&E's failure to maintain accurate records
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led to property damage or loss of life or both?
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I'm not aware that any specific case relating to
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lack of proper records was contributing to that.
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I'm just not knowledgeable to able to answer that.
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Are you familiar with the San Bruno gas explosion?
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Only in retrospect by reading reports
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and lessons learned documents.
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Okay, isn't PG&E on federal criminal probation
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because there was property damage and loss of life
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from the San Bruno gas explosion?
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I will accept that premise.
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Okay, did the company declare bankruptcy
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because of the liabilities associated
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with the property damage and loss of life
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from catastrophic wildfires ignited by PG&E's equipment?
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I will accept that premise.
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Have you been following PG&E's federal criminal
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probation proceedings and Judge Alsup's rulings?
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Only in reading documents associated with it,
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not personal involvement.
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Okay, are you aware that PG&E has been berated
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by Judge Alsop for its failures to maintain its equipment
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and for the dismal record-keeping?
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I will accept that.
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How long has PG&E been working to improve
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its record-keeping an information management?
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I believe because as I stated yesterday,
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I've completed six months so a lot of things
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I don't have current knowledge of
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but I believe that that effort has been underway
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beginning with the results of the San Bruno explosion
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that led to a recognition as we've stated
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that our record management system
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was not where it needed to be.
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I know based on that there was a collection
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and codification of records to find out
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where the improvements needed to be
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and I know that there is a department
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that is exclusively focused in improving
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the quality of the records management process
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and that there'd been formal undertakings there
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as far as I know over the last two years.
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Okay at page 5-34
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lines 31 to 33,
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you state quote,
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"De-energizing and then restoring millions of customers
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"across distinct PSPS events
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"is a monumental task requiring coordination,
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"communication and safe actions."
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For that communications piece,
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you have to have accurate records for and knowledge of
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which customers will be affected, correct?
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Yes.
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You also have to have accurate and granular knowledge
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of how your circuits map to your customers, correct?
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That's correct.
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You were the head of the utility during the fall 2019
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PSPS events, correct?
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That's correct.
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And just for clarity,
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PSPS stands for Public Safety Power Shutoff.
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That's correct.
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Okay are you familiar with the failure to notify
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approximately 23,000 customers of the 729,000 customers
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that were affected by the October 9th PSPS event?
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Yes.
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Were the records involved in the communication failure
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of the fall 2019 events part of the 2014 effort
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to centralize data management,
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the enterprise records and information management program
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referenced by your colleague?
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I don't have specific details about that
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but I do know that there were deficiencies in the databases
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that were accessed in the specific case you mentioned,
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whether that database and those records
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were part of that scope at that time, I'm not aware,
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but there clearly was a deficiency there.
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At page 5-35 you review a number of improvements
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to PSPS including better outage maps,
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reinforcing the website and call centers.
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Has PG&E considered having a dedicated
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communications pathway using account representatives
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for large power customers, transmission level customers,
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to communicate with PG&E's Emergency Operations Center?
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We are exploring a number of remedies
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so that challenges we faced last year
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and let me be the first to admit,
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that the challenges that we had
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in the places where our performance
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were not up to my expectations
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were all around communications.
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They were communications not only with various stakeholders
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at the state level but also at the county level,
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tribal governments and other institutions.
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So there's a lot of work for us to do there
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and it's work that we currently are planning
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and have underway.
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I appreciate that,
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I'm asking specifically about large power customers
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and it is not mentioned in your testimony,
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the efforts that are being undertaken
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to improve communications specifically
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with large industrial sites
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where there's hazardous material, heavy equipment.
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I will repeat my question for you
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and please answer this question.
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Has PG&E considered having a dedicated communications
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pathway using account representatives
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for large power customers to communicate
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with PG&E's Emergency Operations Center?
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I do not have specific knowledge of it.
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There are a lot of plans that are ongoing
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to improve our ability to communicate with all stakeholders
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but I am not specifically aware in that
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that has been explored.
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You're familiar with the different customer classes
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that PG&E serves.
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Yeah, mm-hmm.
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Would this be a concept that you
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as the head of the utility could support
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given the potentially calamitous nature of
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a sudden turn off of power at a large industrial site?
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Yes.
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At page 5-34 line 10,
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you say, "Building a close relationship
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"with the customer is imperative", end quote.
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One approach under examination is
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bringing a more local focus to operations
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including potential reorganization of its operations.
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It say regionalization.
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Thank you.
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Why do you use the word potential?
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Let me just reread this.
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Because these are plans that are underway
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and they're not firm enough to talk about it in detail
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but it is our intention to pursue,
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regionalization has been discussed before.
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It's potential until it becomes reality,
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we'd be planning to make a filing with the Commission
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but it is still our intention to pursue that.
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Okay and I hesitate to ask this question given that answer
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but do you have any more detail now
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that you can offer regarding the regional restructuring plan
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because there's very limited detail in your testimony
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and in the testimony of others on it.
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To add more I can just reinforce
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the testimony of Mr Johnson.
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We are considering potentially four to five regions.
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There will be a number of activities
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that will be centralized
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but the intent is to align
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in an effective way along county jurisdictional lines
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but making sure the regions are appropriately sized.
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So as Mr Johnson said we present as a local company.
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We are currently evaluating a number of alternatives.
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We are opening up to comment
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with our represented employee leadership.
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We are looking at other best practices
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in order to get there.
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So it's a work in progress but the intention to
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reorganize our customer interface along regional lines
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is what we're considering and as I said,
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that will look like four to five regions.
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In developing that concept of four to five regions
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have you taken into consideration for example,
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driving distance for both the customers
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and the employees in those regions?
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It's one of the factors,
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what we would call windshield time.
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The essence of regionalization and why said four to five
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is takes into consideration a lot of things
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but the number one thing
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that we're trying to design that for is a responsiveness.
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So the question about travel times, location of employees,
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what services are provided at that level
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quickly will determine the ultimate size
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and number of regions.
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And you have about 28,000 employees, correct?
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Well subject to check, it's in that order.
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Okay.
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Do you think that the company could develop a complete
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and detailed regional restructuring plan
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in time for inclusion in the next general rate case
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phase one filing, which is the summer of 2021?
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I think that's a reasonable amount of time.
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Okay because it will be a fairly
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significant undertaking, won't it--
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Yes, it will.
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Is it possible for the company to undertake
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some initial steps now towards greater responsiveness
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to its customers and to more regional alignment
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while developing the more formal detailed complete
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regional restructuring plan?
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Yes.
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At page 5-36 you say the company will implement
00:15:17.460 --> 00:15:21.270
the regional restructuring plan if approved by the CPUC,
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that's in footnote 20 and then in the text you say,
00:15:25.430 --> 00:15:29.799
"PG&E will maintain a regional restructuring plan
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"in effect for at least five years
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"following the PG&E plan effective date."
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Is there a distinction in your mind
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between the plan referenced in the footnote
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for regional restructuring and the plan in the text
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and I'm asking because you use a "the" in the footnote
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and an "a" in the text.
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It's no different.
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Okay, thank you.
00:15:56.200 --> 00:16:01.140
And in the state the text what do you mean by the quote,
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"PG&E plan effective date", end quote.
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Can you direct me to the...
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Line 13.
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Thank you.
00:16:16.570 --> 00:16:18.590
Is that the exit from bankruptcy
00:16:18.590 --> 00:16:21.710
or the implementation of the plan of reorganization?
00:16:21.710 --> 00:16:24.340
It's he effective date of the plan of reorganization.
00:16:26.240 --> 00:16:27.073
I'm sorry, I--
00:16:27.073 --> 00:16:28.780
It's the plan of reorganization,
00:16:28.780 --> 00:16:31.290
effective date of the plan of reorganization.
00:16:31.290 --> 00:16:34.925
Okay, won't it take some time to actually implement
00:16:34.925 --> 00:16:37.890
the regional reorganization plan?
00:16:37.890 --> 00:16:41.970
It will take, just for clarity,
00:16:41.970 --> 00:16:43.450
we will start as we said,
00:16:43.450 --> 00:16:45.250
the things we will start to do
00:16:45.250 --> 00:16:49.370
as we go down the path to the reorganization
00:16:49.370 --> 00:16:51.110
and reorganization is much more broader
00:16:51.110 --> 00:16:53.850
than just having a new wiring diagram or structure diagram,
00:16:53.850 --> 00:16:56.500
there's just a lot of work to do there.
00:16:56.500 --> 00:16:57.960
That work will start,
00:16:58.898 --> 00:17:02.510
when we actually complete implementation of it
00:17:02.510 --> 00:17:04.620
will depend on a number of factors.
00:17:06.170 --> 00:17:10.340
So these are estimated timeframes on recognizing
00:17:10.340 --> 00:17:11.780
that there's significant work to do.
00:17:11.780 --> 00:17:16.410
Also cognizant of the fact that we have to reorient
00:17:16.410 --> 00:17:19.590
or reorganize the company and we lose a number of months
00:17:19.590 --> 00:17:21.700
every year appropriately during fire season,
00:17:21.700 --> 00:17:24.690
which we will not be dealing with reorganizations
00:17:24.690 --> 00:17:28.400
because our sole focus of the entire organization
00:17:28.400 --> 00:17:30.900
is to make sure that is managed correctly.
00:17:30.900 --> 00:17:33.440
So there are times when we will not be able to do things
00:17:33.440 --> 00:17:37.720
so all these timing issues are estimates
00:17:37.720 --> 00:17:40.102
but it is a significant undertaking as you said
00:17:40.102 --> 00:17:43.090
and from the time you actually deploy
00:17:43.090 --> 00:17:44.600
and implement a new organization
00:17:44.600 --> 00:17:46.080
until the time you reach steady state
00:17:46.080 --> 00:17:47.800
so you can measure its effectiveness
00:17:47.800 --> 00:17:49.790
does take us a number of years.
00:17:52.049 --> 00:17:54.630
I recognize that
00:17:55.530 --> 00:17:57.260
and that is why...
00:17:59.330 --> 00:18:03.350
Do you share a concern that if you start the clock
00:18:04.400 --> 00:18:08.200
the end of June 2020 and you say five years,
00:18:08.200 --> 00:18:12.380
you're only going to the end of June 2025.
00:18:12.380 --> 00:18:14.540
Doesn't that raise a question in your mind
00:18:14.540 --> 00:18:17.580
whether or not you'll even be fully implemented
00:18:17.580 --> 00:18:19.480
for the regional reorganization plan?
00:18:21.080 --> 00:18:22.230
I think that it's a question
00:18:22.230 --> 00:18:25.030
and I actually suffer from a great deal of impatience
00:18:25.030 --> 00:18:26.730
so I would always want to do things tomorrow
00:18:26.730 --> 00:18:29.500
but having done other reorganizations,
00:18:29.500 --> 00:18:33.090
my view is that we will be doing a lot of work
00:18:33.090 --> 00:18:36.440
even as we speak in terms of some elements of this
00:18:36.440 --> 00:18:39.140
and I'm happy to answer those if you ask the question.
00:18:40.785 --> 00:18:45.785
I think that if we were unencumbered by other things
00:18:46.040 --> 00:18:48.490
where we take time out like for the fire season,
00:18:48.490 --> 00:18:50.610
it would be reasonable to expect we would be able
00:18:50.610 --> 00:18:54.900
to deploy a new organization in the first quarter of 2020.
00:18:54.900 --> 00:18:58.580
If we had the approvals from the Commission to do so.
00:18:58.580 --> 00:19:01.140
So the timing is fungible.
00:19:01.140 --> 00:19:04.740
Clearly in terms of assessing the performance of
00:19:04.740 --> 00:19:08.570
a new organization, fine tuning it, making sure it's going,
00:19:08.570 --> 00:19:10.300
the more time you can be in that
00:19:10.300 --> 00:19:13.420
before you declare success is better.
00:19:13.420 --> 00:19:15.729
And if you want to protect your ability to deploy that
00:19:15.729 --> 00:19:20.729
but hopefully that when we emerge from bankruptcy
00:19:20.729 --> 00:19:23.160
that we will be in full stride to implement
00:19:23.160 --> 00:19:26.690
the new organization with some things already in place
00:19:26.690 --> 00:19:29.430
other than necessarily the ultimate wiring diagram
00:19:29.430 --> 00:19:31.990
where we can say it's mission accomplished.
00:19:31.990 --> 00:19:34.760
So I don't want to be specific on time
00:19:34.760 --> 00:19:37.190
but in order to get to a point where you can certify
00:19:37.190 --> 00:19:40.300
and say you've now had the final organizational structure,
00:19:40.300 --> 00:19:43.400
clearly the more time you can be up and operating in that
00:19:43.400 --> 00:19:45.235
the better off you will be.
00:19:45.235 --> 00:19:47.330
As the head of the utility,
00:19:47.330 --> 00:19:49.640
you're familiar with the general rate case cycles, correct?
00:19:49.640 --> 00:19:50.630
Yes.
00:19:50.630 --> 00:19:53.950
Would you support aligning the timing
00:19:53.950 --> 00:19:56.200
for the implementation and evaluation of
00:19:56.200 --> 00:19:57.970
the regional restructuring plan
00:19:57.970 --> 00:20:00.610
with what will be a four year GRC cycle?
00:20:01.490 --> 00:20:04.320
I heard that question posed to Mr. Johnson
00:20:04.320 --> 00:20:05.850
and Mr Johnson responded to that
00:20:05.850 --> 00:20:08.270
and I think he said that that would be something
00:20:08.270 --> 00:20:09.940
that we could consider.
00:20:09.940 --> 00:20:11.050
Okay, thank you, your Honor.
00:20:11.050 --> 00:20:12.200
No further questions.
00:20:13.150 --> 00:20:15.090
All right thank you.
00:20:15.090 --> 00:20:16.652
Miss Kasnitz?
00:20:16.652 --> 00:20:18.352
Thank you, your Honor.
00:20:19.224 --> 00:20:20.460
Good morning, Mr Vesey.
00:20:20.460 --> 00:20:22.060
Good morning.
00:20:22.060 --> 00:20:23.270
I'm Melissa Kasnitz
00:20:23.270 --> 00:20:25.370
with the Center for Accessible Technology.
00:20:26.300 --> 00:20:29.380
My organization represents the interests of customers
00:20:29.380 --> 00:20:32.930
of PG&E with disabilities and medical needs.
00:20:32.930 --> 00:20:35.035
This group is disproportionately low income
00:20:35.035 --> 00:20:37.940
and so my organization also generally seeks
00:20:37.940 --> 00:20:40.530
to represent the interests of low-income customers.
00:20:41.860 --> 00:20:43.740
Our constituency is highly dependent
00:20:43.740 --> 00:20:46.610
on affordable and reliable energy to live independently
00:20:47.450 --> 00:20:49.750
and they're also at high risk of personal harm
00:20:49.750 --> 00:20:53.290
during extended power outages like the PSPS events.
00:20:56.456 --> 00:20:59.430
So those are the perspectives I'm seeking to represent here.
00:20:59.430 --> 00:21:02.000
Before I launch into my direct questions,
00:21:02.000 --> 00:21:05.730
I'd like to follow up on Miss Sheriff's questions just now
00:21:05.730 --> 00:21:09.157
about the PG&E plan for restructuring
00:21:09.157 --> 00:21:14.157
and the effective date, looking at page 536, line 13.
00:21:17.970 --> 00:21:21.050
As a lawyer by capitalizing effective date
00:21:21.050 --> 00:21:23.120
that seems to indicate that there is going to be
00:21:23.120 --> 00:21:26.645
a single date that would be the start point
00:21:26.645 --> 00:21:28.756
of this five-year proposal
00:21:28.756 --> 00:21:31.400
and I'm afraid I still don't understand
00:21:31.400 --> 00:21:34.700
what this specific date is tied to,
00:21:34.700 --> 00:21:38.360
whether it's CPUC approval of a restructuring plan,
00:21:38.360 --> 00:21:40.720
whether it's the exit from bankruptcy
00:21:40.720 --> 00:21:42.030
or some other date.
00:21:42.030 --> 00:21:44.900
Can you tell me what you see as the trigger
00:21:44.900 --> 00:21:47.440
for this effective date that would start
00:21:47.440 --> 00:21:48.440
the five-year count?
00:21:51.200 --> 00:21:56.200
Well I just answered that question.
00:21:57.490 --> 00:22:00.210
My view and
00:22:02.000 --> 00:22:05.200
so the effective date to me still refers
00:22:05.200 --> 00:22:06.790
to the emergence from bankruptcy
00:22:06.790 --> 00:22:08.270
to the plan of restructure.
00:22:08.270 --> 00:22:10.420
Okay that's fine, I just wanted to know
00:22:10.420 --> 00:22:13.070
what you viewed as that trigger so I appreciate that.
00:22:14.270 --> 00:22:17.760
All right turning to pages one through three
00:22:17.760 --> 00:22:22.760
of your testimony, which is page 5-1 to 5-3 of the exhibit,
00:22:24.800 --> 00:22:27.540
you generally state the PG&E'S mission is
00:22:27.540 --> 00:22:29.660
to safely and reliably deliver
00:22:29.660 --> 00:22:32.271
affordable clean energy to its customers
00:22:32.271 --> 00:22:35.740
and then you provide a list of 13 specific initiatives.
00:22:35.740 --> 00:22:37.817
Do you see that?
00:22:37.817 --> 00:22:40.350
Could you please give me that reference again?
00:22:40.350 --> 00:22:42.230
Pages 5-1 to 5-3.
00:22:43.180 --> 00:22:44.013
Yes.
00:22:44.850 --> 00:22:45.683
I have it.
00:22:46.570 --> 00:22:49.320
None of these initiatives specifically mentions
00:22:49.320 --> 00:22:53.270
any focus on PG&E'S vulnerable customer groups.
00:22:53.270 --> 00:22:55.630
So can you tell me please under PG&E's
00:22:55.630 --> 00:22:59.000
proposed new structure how you seek to prioritize
00:22:59.000 --> 00:23:00.450
the needs of these customers?
00:23:01.674 --> 00:23:03.360
Thank you for the question.
00:23:03.360 --> 00:23:07.200
You know in looking at this
00:23:07.200 --> 00:23:11.050
and having the experience of hearing from some access
00:23:11.050 --> 00:23:14.160
and functional needs customers as well as others
00:23:14.160 --> 00:23:15.560
who are on Medical Baseline,
00:23:15.560 --> 00:23:16.920
this is a very significant issue
00:23:16.920 --> 00:23:20.840
so I understand your point of advocacy.
00:23:23.920 --> 00:23:28.687
The way that we do it is we engage with the stakeholders
00:23:28.687 --> 00:23:32.870
that are involved in providing services to these groups.
00:23:32.870 --> 00:23:37.220
We go to our stakeholders at the county level
00:23:37.220 --> 00:23:39.610
to seek information to help prioritize that.
00:23:41.280 --> 00:23:45.970
We provide funding to the relative non-for-profits
00:23:45.970 --> 00:23:48.350
that serve these customer groups,
00:23:48.350 --> 00:23:50.784
but it gets down to really having
00:23:50.784 --> 00:23:53.140
much better understanding of those needs,
00:23:53.140 --> 00:23:56.350
where they are and how our actions impact them
00:23:56.350 --> 00:23:58.470
so we kind of effective programming
00:23:58.470 --> 00:23:59.910
to deal with those concerns.
00:24:01.130 --> 00:24:05.084
Thank you and where does this increased effort
00:24:05.084 --> 00:24:07.707
to engage with these stakeholders fit
00:24:07.707 --> 00:24:10.462
in your list of 13 specific initiatives
00:24:10.462 --> 00:24:12.400
that you're pursuing?
00:24:12.400 --> 00:24:15.490
It's not in this list but that's one of the initiatives
00:24:15.490 --> 00:24:19.810
since the last PSPS events of last fall.
00:24:19.810 --> 00:24:23.416
We've engaged in a system-wide listening tour
00:24:23.416 --> 00:24:26.560
at the county levels which include the electeds
00:24:26.560 --> 00:24:28.700
and all stakeholders there.
00:24:28.700 --> 00:24:30.825
And just to make it the recent,
00:24:30.825 --> 00:24:34.520
I think it was the end of last week I was in Lake County,
00:24:35.427 --> 00:24:38.060
I was with a number of the electeds
00:24:38.060 --> 00:24:39.670
and representatives of various groups
00:24:39.670 --> 00:24:41.750
and we had a very deep conversation about
00:24:41.750 --> 00:24:45.960
the 2,200 customers that are access and functional needs
00:24:45.960 --> 00:24:48.660
and what the specific issues were
00:24:48.660 --> 00:24:51.540
and they had asked a very similar question
00:24:51.540 --> 00:24:53.820
to the one you just did and I said,
00:24:53.820 --> 00:24:56.520
"Well it'd be very helpful for you to help us prioritize
00:24:56.520 --> 00:24:57.460
"what those needs are
00:24:57.460 --> 00:25:00.360
"and how we could be most responsive to that."
00:25:00.360 --> 00:25:02.410
We've done this now in 28 counties.
00:25:02.410 --> 00:25:04.200
Those are the counties that we're willing to sit down
00:25:04.200 --> 00:25:07.241
so it is this ongoing and constant engagement
00:25:07.241 --> 00:25:11.170
because we recognize that we don't know enough
00:25:11.170 --> 00:25:12.490
to make those right decisions
00:25:12.490 --> 00:25:16.050
so that information and actually from Lake County
00:25:16.050 --> 00:25:18.520
we're still waiting on the details of
00:25:18.520 --> 00:25:21.791
those 2,200 critical needs customers
00:25:21.791 --> 00:25:23.860
so that we can help in ensuring that
00:25:23.860 --> 00:25:26.740
we have a programmatic response that makes sense.
00:25:26.740 --> 00:25:28.725
Now that said we also deal with
00:25:28.725 --> 00:25:33.151
the California Foundation for Independent Living.
00:25:33.151 --> 00:25:34.590
This will be the second year
00:25:34.590 --> 00:25:37.000
we will provide funding specifically targeted
00:25:37.000 --> 00:25:39.970
at the needs of those customer groups
00:25:39.970 --> 00:25:44.970
as well as ADA which we've been supporting since 2014.
00:25:45.145 --> 00:25:47.840
But all that is somewhat meaninglessness
00:25:47.840 --> 00:25:50.520
until we have a very deep knowledge of those needs
00:25:50.520 --> 00:25:51.860
and how to prioritize them
00:25:51.860 --> 00:25:53.911
and making sure that the actions we take
00:25:53.911 --> 00:25:57.940
are informed by that population
00:25:57.940 --> 00:25:59.920
and that's part of the listening tour
00:25:59.920 --> 00:26:01.360
where we deal with,
00:26:01.360 --> 00:26:04.310
we have a group within our customer services organization
00:26:04.310 --> 00:26:07.501
that actually coordinates our activities with the ADA,
00:26:07.501 --> 00:26:10.850
so we're looking to get much more informed
00:26:10.850 --> 00:26:12.570
and knowledgeable about this community
00:26:12.570 --> 00:26:14.520
and how our actions impact them
00:26:14.520 --> 00:26:16.510
so we can assure there's appropriate programming
00:26:16.510 --> 00:26:17.820
against their needs.
00:26:17.820 --> 00:26:18.770
Mr Vesey?
00:26:20.273 --> 00:26:22.810
I have a quick question related to this.
00:26:22.810 --> 00:26:26.270
In your testimony at pages 5-1 through 5-3
00:26:26.270 --> 00:26:28.295
you identify 13 initiatives
00:26:28.295 --> 00:26:33.010
and I think the question that I'm reading between the lines
00:26:33.010 --> 00:26:35.970
form Miss Kasnitz is where does the access
00:26:35.970 --> 00:26:38.400
and functional needs activity fit
00:26:38.400 --> 00:26:40.437
within these 13 initiatives?
00:26:40.437 --> 00:26:42.170
Thank you, your Honor.
00:26:42.170 --> 00:26:44.020
And I think I said it wasn't in these
00:26:44.020 --> 00:26:46.300
because these weren't meant to be a complete
00:26:46.300 --> 00:26:49.700
and comprehensive list but the ones that we thought had
00:26:50.645 --> 00:26:52.590
or in my testimony we addressed.
00:26:54.490 --> 00:26:57.830
So my answer is not in these 13.
00:26:59.420 --> 00:27:02.395
And these 13 were included in your testimony
00:27:02.395 --> 00:27:05.007
because they're PG&E's top of priorities,
00:27:05.007 --> 00:27:07.992
so would it be correct to say that you view
00:27:07.992 --> 00:27:11.710
that engagement with these customer groups
00:27:11.710 --> 00:27:15.350
as a lower priority than the 13 items listed?
00:27:15.350 --> 00:27:17.040
Well I wouldn't characterize it that way
00:27:17.040 --> 00:27:19.733
but the fact that it is not in this list
00:27:19.733 --> 00:27:21.140
led us to believe that
00:27:21.140 --> 00:27:23.100
we were dealing with them in the course of business
00:27:23.100 --> 00:27:25.700
and getting smarter about it all the time.
00:27:25.700 --> 00:27:28.000
Thank you and your answer previously
00:27:28.000 --> 00:27:30.160
about the listening tour,
00:27:30.160 --> 00:27:33.787
my understanding is focused on PG&E's efforts
00:27:35.200 --> 00:27:37.580
to address the needs of vulnerable customers
00:27:37.580 --> 00:27:40.050
during power shutoffs.
00:27:40.050 --> 00:27:42.165
I would like you to answer the same question
00:27:42.165 --> 00:27:45.840
with regard to how you focus on the needs of
00:27:45.840 --> 00:27:49.280
vulnerable customer groups including medically vulnerable
00:27:49.280 --> 00:27:52.810
and low-income in day-to-day activity of the company,
00:27:52.810 --> 00:27:55.840
not just during public safety power shutoffs.
00:27:55.840 --> 00:27:57.625
Yeah and that's fair.
00:27:57.625 --> 00:28:00.540
Things that we learn out of these engagements
00:28:00.540 --> 00:28:03.006
apply broadly in our business.
00:28:03.006 --> 00:28:06.470
There are organizations and groups of individuals
00:28:06.470 --> 00:28:10.012
within the company who have specific responsibility
00:28:10.012 --> 00:28:12.080
to manage these.
00:28:12.080 --> 00:28:14.630
I don't have that detail at the moment
00:28:14.630 --> 00:28:17.426
so I can't tell you the answer to that question,
00:28:17.426 --> 00:28:21.436
but we are organized, we do have that ongoing relationship
00:28:21.436 --> 00:28:24.050
with the ADA since 2014.
00:28:24.050 --> 00:28:25.970
We have an individual who coordinates
00:28:25.970 --> 00:28:29.730
and manages our activities with that group
00:28:29.730 --> 00:28:32.330
but I don't have more detail than that.
00:28:32.330 --> 00:28:34.210
When you say relationship with the ADA,
00:28:34.210 --> 00:28:36.420
can you elaborate what you mean by that?
00:28:36.420 --> 00:28:38.627
I think in 2014
00:28:38.627 --> 00:28:42.250
and I can't tell you the details of the agreement
00:28:42.250 --> 00:28:46.436
but we've been providing funding to the ADA
00:28:46.436 --> 00:28:48.219
on an annual basis.
00:28:48.219 --> 00:28:52.200
And I would assume that there's been conversations
00:28:52.200 --> 00:28:56.260
around how to prioritize our needs
00:28:56.260 --> 00:28:59.039
in the execution of their activities.
00:28:59.039 --> 00:29:01.470
Okay I'll clarify that--
Thank you.
00:29:01.470 --> 00:29:04.640
I believe that those are referencing agreements
00:29:04.640 --> 00:29:07.640
that PG&E and my organization have made
00:29:07.640 --> 00:29:09.810
through their general rate cases
00:29:09.810 --> 00:29:12.550
to allocate specific funding to address
00:29:12.550 --> 00:29:14.911
accessibility needs of PG&E services and facilities,
00:29:14.911 --> 00:29:16.667
is that what you're referring to?
00:29:16.667 --> 00:29:18.085
Yes.
Thank you.
00:29:18.085 --> 00:29:20.320
And I'll clarify for the record
00:29:20.320 --> 00:29:22.280
that those types of agreements have been in place
00:29:22.280 --> 00:29:25.380
for multiple GRC cycles much longer than 2014.
00:29:25.380 --> 00:29:26.280
Objection.
00:29:28.238 --> 00:29:30.790
It's not about testimony from the questioner.
00:29:33.650 --> 00:29:34.690
Let's move on.
00:29:36.150 --> 00:29:40.681
Turning to page 5-5 of your testimony where you discuss
00:29:40.681 --> 00:29:43.740
the revised leadership structure for PG&E.
00:29:44.580 --> 00:29:47.640
Again, within this description of the leadership structure
00:29:47.640 --> 00:29:50.100
you do not mention specifically any efforts
00:29:50.100 --> 00:29:53.370
to serve the needs of customers with disabilities.
00:29:53.370 --> 00:29:55.480
In your testimony just now you did reference
00:29:55.480 --> 00:29:59.970
the existence of PG&E's ADA coordinator.
00:29:59.970 --> 00:30:02.850
If you know can you tell me who the ADA coordinator
00:30:02.850 --> 00:30:06.290
will be reporting to and where that role will fall
00:30:06.290 --> 00:30:08.488
in this proposed new organizational structure?
00:30:08.488 --> 00:30:12.320
In the proposed new organizational structure
00:30:12.320 --> 00:30:14.120
there is no immediate change.
00:30:14.120 --> 00:30:16.780
I believe that individual reports up to
00:30:16.780 --> 00:30:19.220
our vice President of customer operations,
00:30:19.220 --> 00:30:23.550
which then reports up to the chief customer officer.
00:30:23.550 --> 00:30:24.383
Thank you.
00:30:26.140 --> 00:30:27.520
Turning to your discussion of
00:30:27.520 --> 00:30:29.740
the role of chief risk officer,
00:30:29.740 --> 00:30:33.093
which is on pages 5-6 to 5-7 of your testimony,
00:30:33.093 --> 00:30:36.477
is this role empowered specifically to oversee risks
00:30:36.477 --> 00:30:39.532
facing your customers with disabilities,
00:30:39.532 --> 00:30:42.650
either with regard to PSPS or more generally
00:30:42.650 --> 00:30:44.314
in day-to-day business?
00:30:44.314 --> 00:30:49.314
This individual is charged with looking at all risks
00:30:50.118 --> 00:30:53.302
that are surfaced so there's no limit
00:30:53.302 --> 00:30:57.310
but they are risks to our corporate mission
00:30:57.310 --> 00:31:00.240
to provide safe affordable reliable energy
00:31:02.240 --> 00:31:03.990
and clean energy to our customers.
00:31:03.990 --> 00:31:07.040
So it deals with all those uncertainties and risks.
00:31:07.040 --> 00:31:08.290
Understood, thank you.
00:31:08.290 --> 00:31:10.730
But is there a specific charge to this person
00:31:10.730 --> 00:31:14.360
to assess risks presented by the operation of the utility
00:31:14.360 --> 00:31:16.860
to customers with disabilities or medical needs?
00:31:16.860 --> 00:31:18.470
It's to all risks that are surfaced,
00:31:18.470 --> 00:31:21.520
if it comes up in the analysis, it's not excluded.
00:31:21.520 --> 00:31:23.980
How it's included and and where it is,
00:31:23.980 --> 00:31:27.040
it is not an item in the either risk topic
00:31:27.040 --> 00:31:28.390
or risk register at the moment
00:31:28.390 --> 00:31:31.860
so it has not risen to that enterprise risk level yet.
00:31:31.860 --> 00:31:32.693
Thank you.
00:31:33.530 --> 00:31:37.610
On page 5-7 of your testimony
00:31:38.940 --> 00:31:42.290
you say that the chief risk officer or CRO
00:31:42.290 --> 00:31:45.598
will have responsibility for evaluating PSPS risks
00:31:45.598 --> 00:31:49.454
including implementation or non implementation.
00:31:49.454 --> 00:31:50.400
Do you see that?
00:31:52.305 --> 00:31:54.470
Could you give me a line number, it we would be helpful.
00:31:54.470 --> 00:31:55.849
Line number 18.
00:31:55.849 --> 00:31:59.020
16 through 19, it's the sentence.
00:31:59.020 --> 00:31:59.853
Yes, I see it.
00:32:00.775 --> 00:32:04.768
Do you expect the CRO to perform any sort of balancing
00:32:04.768 --> 00:32:08.550
of the risks of implementation of a PSPS event
00:32:08.550 --> 00:32:13.550
versus the risks of non implementation of the event?
00:32:15.173 --> 00:32:17.400
This is a very interesting question.
00:32:17.400 --> 00:32:22.310
So the role is new and what we want to make sure
00:32:22.310 --> 00:32:24.301
is that from an enterprise level
00:32:24.301 --> 00:32:27.723
with somebody who is not directly involved in the operations
00:32:27.723 --> 00:32:32.610
that our processes assure that all information
00:32:32.610 --> 00:32:35.280
and risks were evaluated properly.
00:32:35.280 --> 00:32:39.320
I don't anticipate that they would counter a recommendation
00:32:39.320 --> 00:32:41.730
or that they would ever be making a recommendation
00:32:41.730 --> 00:32:45.680
as to whether a PSPS should be enacted or not
00:32:45.680 --> 00:32:47.710
but they will ensure that the processes,
00:32:47.710 --> 00:32:50.760
that the decision-making hasn't missed anything
00:32:50.760 --> 00:32:53.170
and therefore enact at the overall improvement
00:32:53.170 --> 00:32:55.283
of the quality of the decision.
00:32:55.283 --> 00:32:57.840
I think you may have answered my next question
00:32:57.840 --> 00:32:59.540
but just for clarity,
00:32:59.540 --> 00:33:02.560
would you see the CRO as having the authority
00:33:02.560 --> 00:33:06.370
to override a decision that has otherwise been made
00:33:06.370 --> 00:33:08.511
to implement a PSPS event
00:33:08.511 --> 00:33:12.990
because of a review of the risk of turning off the power
00:33:12.990 --> 00:33:15.370
and the harms that such an action might create?
00:33:15.370 --> 00:33:17.810
I do not believe that the CRO
00:33:17.810 --> 00:33:19.220
would be in a position to override.
00:33:19.220 --> 00:33:20.940
I think the CRO could inform,
00:33:20.940 --> 00:33:22.870
bring those intentions and those risks
00:33:22.870 --> 00:33:24.623
to the officer in charge,
00:33:24.623 --> 00:33:29.230
but given the challenge of accountability and clarity
00:33:29.230 --> 00:33:31.590
of purpose we want one individual in charge
00:33:31.590 --> 00:33:33.250
who ultimately makes the decision.
00:33:33.250 --> 00:33:35.230
So that the officer in charge,
00:33:36.820 --> 00:33:38.520
this particular one gets inputs
00:33:38.520 --> 00:33:40.180
from a lot of different places.
00:33:40.180 --> 00:33:42.626
One, that I'm assuming would be taken
00:33:42.626 --> 00:33:44.520
and weighed very heavily would be
00:33:44.520 --> 00:33:47.080
the view of the chief risk officer
00:33:47.080 --> 00:33:48.670
in terms of any concerns that
00:33:48.670 --> 00:33:50.640
that individual may have.
00:33:50.640 --> 00:33:53.250
And would the risks that the chief risk officer
00:33:53.250 --> 00:33:57.150
would be considering,
00:33:57.150 --> 00:34:00.480
specifically be expected to include the risk of harm
00:34:00.480 --> 00:34:02.180
to medically vulnerable customers
00:34:02.180 --> 00:34:05.000
if the power's turned off for an extended period of time?
00:34:05.000 --> 00:34:08.490
I believe we would review all risks
00:34:09.570 --> 00:34:12.430
and I would assume that would be included in it.
00:34:14.680 --> 00:34:17.380
And do you see the role of the chief risk officers
00:34:17.380 --> 00:34:22.010
responsibilities to extend efforts to mitigate
00:34:22.010 --> 00:34:25.160
harms during a PSPS event to vulnerable customers?
00:34:26.850 --> 00:34:28.330
It's part of the process
00:34:28.330 --> 00:34:31.390
because I don't think this would be done on the fly.
00:34:31.390 --> 00:34:34.700
That and I understand currently
00:34:34.700 --> 00:34:39.700
that the current risk register has wildfires as a risk event
00:34:40.870 --> 00:34:43.438
and that's a change in the way we look at things.
00:34:43.438 --> 00:34:47.990
It has PSPS as a mitigant to those risks.
00:34:47.990 --> 00:34:51.035
There is now under consideration moving PSPS
00:34:51.035 --> 00:34:53.830
to an event risk and if that's done
00:34:53.830 --> 00:34:56.850
then it would have to naturally consider
00:34:56.850 --> 00:34:59.315
all the risk drivers and all the mitigants
00:34:59.315 --> 00:35:03.780
and I think that will then change our view of that.
00:35:03.780 --> 00:35:05.320
And you would agree that the Commission
00:35:05.320 --> 00:35:09.164
has already required all of the IOUs including PG&E
00:35:09.164 --> 00:35:12.680
to work to mitigate harms when they turn off the power
00:35:12.680 --> 00:35:14.763
in a PSPS, is that correct?
Yes.
00:35:14.763 --> 00:35:15.596
Thank you.
00:35:16.580 --> 00:35:19.390
Turning to your description of the chief customer officer,
00:35:19.390 --> 00:35:22.020
which is at page 5-9 of your testimony.
00:35:26.787 --> 00:35:29.560
Do you view this proposed reformatted role of
00:35:29.560 --> 00:35:33.880
chief customer office as having a specific designated focus
00:35:33.880 --> 00:35:35.990
on the needs of vulnerable customers
00:35:35.990 --> 00:35:38.469
in the day-to-day operation of the utility?
00:35:38.469 --> 00:35:41.300
The chief customer officer has responsibly
00:35:41.300 --> 00:35:44.089
to ensuring the appropriate service
00:35:44.089 --> 00:35:46.610
and programming for all our customers.
00:35:48.590 --> 00:35:50.780
Access and functional needs customers,
00:35:50.780 --> 00:35:54.570
low-income customers, broadly residential customers,
00:35:54.570 --> 00:35:56.570
large in, excuse me.
00:35:56.570 --> 00:35:57.930
All customers.
00:35:57.930 --> 00:35:59.971
Okay and is that articulated specifically
00:35:59.971 --> 00:36:02.850
in the role of this position
00:36:02.850 --> 00:36:05.406
that there would be a specific responsibility
00:36:05.406 --> 00:36:08.490
to look out for disabled and low-income customers
00:36:08.490 --> 00:36:10.400
and these other customer groups?
00:36:10.400 --> 00:36:13.120
Whether it's articulated in place in writing or not,
00:36:13.120 --> 00:36:15.860
I am not aware but the expectations are clear.
00:36:17.108 --> 00:36:19.340
And I understand you said previously
00:36:19.340 --> 00:36:22.210
that the ADA coordinator would be within
00:36:22.210 --> 00:36:25.250
the operation of the chief customer officer
00:36:25.250 --> 00:36:27.580
but not a direct report further down.
00:36:27.580 --> 00:36:28.430
That's correct.
00:36:30.744 --> 00:36:31.762
All right.
00:36:31.762 --> 00:36:34.390
Turning to page 5-11 of your testimony
00:36:34.390 --> 00:36:36.860
and back to the issue of PSPS events.
00:36:43.100 --> 00:36:45.180
You just mentioned PG&E's efforts
00:36:45.180 --> 00:36:48.220
to reduce the frequency and duration of PSPS events
00:36:50.090 --> 00:36:53.089
but again here, you don't specifically discuss
00:36:53.089 --> 00:36:56.730
efforts to mitigate the impacts of those events
00:36:56.730 --> 00:36:58.770
that still take place.
00:36:58.770 --> 00:37:01.420
Can you tell me whose job it will be
00:37:01.420 --> 00:37:03.760
to oversee mitigation of harm
00:37:04.645 --> 00:37:07.450
from extended power shutoffs for your customers?
00:37:07.450 --> 00:37:09.640
Those responsibilities on the input on
00:37:09.640 --> 00:37:11.680
the impact on customers would be
00:37:11.680 --> 00:37:15.550
the primary responsibility of the chief customer officer.
00:37:16.612 --> 00:37:19.330
Thank you and in your opinion,
00:37:19.330 --> 00:37:23.722
does PG&E have an obligation to provide direct assistance
00:37:23.722 --> 00:37:27.590
to people who are put at risk of harm due to PG&E's decision
00:37:27.590 --> 00:37:29.470
to turn off the power,
00:37:29.470 --> 00:37:31.970
particularly people with medical vulnerabilities?
00:37:31.970 --> 00:37:34.590
I believe we have the responsibility to ensure
00:37:34.590 --> 00:37:39.230
that we understand the risk transfer that takes place
00:37:39.230 --> 00:37:42.210
when we preemptively de-energized.
00:37:44.460 --> 00:37:46.120
One of those in the first
00:37:49.900 --> 00:37:53.356
implementation of the PSPS was the CRCs,
00:37:53.356 --> 00:37:56.360
which are community resource centers.
00:37:56.360 --> 00:38:00.400
Over the execution of PSPS
00:38:00.400 --> 00:38:02.830
last year we had nine of them.
00:38:02.830 --> 00:38:05.530
We consistently received feedback on what we needed
00:38:05.530 --> 00:38:08.330
to provide in these centers and how we needed to do them
00:38:09.190 --> 00:38:11.940
and we have gotten input.
00:38:11.940 --> 00:38:15.040
I specifically got input from my listening tour
00:38:15.040 --> 00:38:17.600
in Lake County that we need to make/have
00:38:17.600 --> 00:38:22.590
the ability to provide the charging for mobile batteries,
00:38:23.920 --> 00:38:26.290
potentially oxygen tank exchange,
00:38:26.290 --> 00:38:28.470
having cots where people can have a respite,
00:38:28.470 --> 00:38:30.260
so we continue to get that input.
00:38:30.260 --> 00:38:34.260
Those recommendations and the deployment of our CRCs
00:38:34.260 --> 00:38:36.570
are under the responsibility and input
00:38:36.570 --> 00:38:38.220
from that chief customer officer
00:38:38.220 --> 00:38:41.770
but it comes back to getting the input
00:38:41.770 --> 00:38:44.120
and the feedback from the impacted communities.
00:38:45.280 --> 00:38:49.390
Thank you I appreciate that, but more generally as a
00:38:51.998 --> 00:38:54.580
point of organizational understanding
00:38:54.580 --> 00:38:57.570
would you agree that PG&E does have an obligation
00:38:57.570 --> 00:39:00.827
to provide direct assistance to customers with medical needs
00:39:00.827 --> 00:39:03.540
who are put at risk of harm from de-energization?
00:39:03.540 --> 00:39:04.520
Lemme say it this way.
00:39:04.520 --> 00:39:07.410
I think we take this issue very seriously now
00:39:07.410 --> 00:39:10.110
and that's why we redefined our terms to customer welfare
00:39:10.110 --> 00:39:13.267
as opposed to not starting catastrophic wildfires.
00:39:13.267 --> 00:39:17.190
The obligation for us is to understand the impacts
00:39:17.190 --> 00:39:18.390
it has on those communities
00:39:18.390 --> 00:39:20.820
and ensure through some mechanism
00:39:20.820 --> 00:39:22.630
that we do the best we can to make sure
00:39:22.630 --> 00:39:24.280
that their needs are provide for.
00:39:25.330 --> 00:39:26.163
Thank you.
00:39:27.040 --> 00:39:30.030
Turning to page 5-34 of your testimony.
00:39:30.030 --> 00:39:31.560
Let's put off the record for a moment.
00:39:31.560 --> 00:39:33.700
I'm just giving you a time check.
00:39:34.580 --> 00:39:35.413
I have--
00:39:35.413 --> 00:39:36.370
A couple minutes.
00:39:36.370 --> 00:39:38.300
A half dozen more questions, sorry.
00:39:38.300 --> 00:39:39.300
Perfect.
00:39:39.300 --> 00:39:40.250
Back on the record.
00:39:43.313 --> 00:39:45.507
On page 5-34 of your testimony
00:39:45.507 --> 00:39:48.600
you discuss the imperative of building
00:39:48.600 --> 00:39:51.722
a close relationship with your customers, do you see that?
00:39:51.722 --> 00:39:52.720
Yes.
00:39:54.180 --> 00:39:56.270
Can you tell me what consideration has been given
00:39:56.270 --> 00:39:58.770
specifically to building relationships with access
00:39:58.770 --> 00:40:01.719
and functional needs customers and low-income customers?
00:40:01.719 --> 00:40:05.860
Specifically no,
00:40:05.860 --> 00:40:07.840
but generally it's this question
00:40:07.840 --> 00:40:10.930
right now of making sure that we understand the needs,
00:40:10.930 --> 00:40:12.480
that they are prioritized,
00:40:13.480 --> 00:40:16.420
as we look to improve our services.
00:40:16.420 --> 00:40:20.370
26% of our residential customer base is low income
00:40:20.370 --> 00:40:23.303
and that's significant and so that's a very large portion
00:40:23.303 --> 00:40:27.840
and the fact that they may avail themselves
00:40:27.840 --> 00:40:30.800
of appropriate rate structures to deal with that
00:40:30.800 --> 00:40:32.590
understanding the specific needs
00:40:32.590 --> 00:40:33.850
in the provision of our service
00:40:33.850 --> 00:40:36.830
to all customers is important.
00:40:36.830 --> 00:40:39.540
The more granular we can get those understandings,
00:40:39.540 --> 00:40:43.730
the better we can develop programs to be of assistance
00:40:43.730 --> 00:40:47.430
but this is clearly something that we are working on now
00:40:47.430 --> 00:40:50.430
and I don't have significant detail in front of me
00:40:50.430 --> 00:40:52.740
to respond to that but I would agree that
00:40:52.740 --> 00:40:54.680
all our customers are important,
00:40:54.680 --> 00:40:56.800
all of them have unique needs.
00:40:56.800 --> 00:40:58.640
We have the ability now with technology
00:40:58.640 --> 00:41:01.410
to get much more specific on what those are
00:41:01.410 --> 00:41:04.130
and trying to understand how we can then be
00:41:04.130 --> 00:41:06.489
of better service to those customers.
00:41:06.489 --> 00:41:08.990
And can you tell me whose job specifically
00:41:08.990 --> 00:41:11.270
it will be to work to build close relationships
00:41:11.270 --> 00:41:13.470
with your AFN and low income customers?
00:41:13.470 --> 00:41:15.800
Specifically, I can't.
00:41:15.800 --> 00:41:17.360
That's an organizational question
00:41:17.360 --> 00:41:20.220
but the ultimate responsibility from where I sit
00:41:20.220 --> 00:41:22.510
is mine, my chief customer officer,
00:41:22.510 --> 00:41:23.840
and my head of electric ops
00:41:23.840 --> 00:41:26.880
and my head of gas operations at the moment.
00:41:26.880 --> 00:41:30.820
As we reorganize to a much more regional structure
00:41:30.820 --> 00:41:33.340
those responsibilities will be in the regions
00:41:33.340 --> 00:41:38.340
with specific individuals tasks for that work.
00:41:39.002 --> 00:41:41.460
And do you anticipate specific metrics
00:41:41.460 --> 00:41:43.941
to evaluate your success at building close relationships
00:41:43.941 --> 00:41:46.863
with your vulnerable customer groups?
00:41:46.863 --> 00:41:48.590
Not at this moment.
00:41:48.590 --> 00:41:51.430
Our measures are considered more broadly
00:41:51.430 --> 00:41:53.990
but we surely can take that under consideration.
00:41:53.990 --> 00:41:54.823
Thank you.
00:41:58.710 --> 00:42:00.840
And finally, turning once more briefly to
00:42:00.840 --> 00:42:03.221
the issue of PSPS events.
00:42:03.221 --> 00:42:07.960
On page 5-35 you note that PG&E did not execute
00:42:07.960 --> 00:42:11.650
its recent PSPS events flawlessly
00:42:13.771 --> 00:42:16.381
and in your list of efforts to improve future events
00:42:16.381 --> 00:42:20.200
you note that PG&E will improve outreach
00:42:20.200 --> 00:42:21.410
to vulnerable customers.
00:42:21.410 --> 00:42:22.820
Do you see that?
Yes.
00:42:25.480 --> 00:42:28.420
Would you agree that providing assistance to customers
00:42:28.420 --> 00:42:31.470
is a separate issue than providing outreach to customers?
00:42:31.470 --> 00:42:32.303
Yes.
00:42:33.940 --> 00:42:36.690
And providing assistance is not on this list of
00:42:36.690 --> 00:42:39.240
purported efforts to improve.
00:42:39.240 --> 00:42:40.620
Of what efforts?
00:42:40.620 --> 00:42:43.360
Purported efforts to improve, do you agree?
00:42:44.898 --> 00:42:47.110
It's on a list.
00:42:47.110 --> 00:42:50.837
Whose job will it be to actually provide assistance?
00:42:50.837 --> 00:42:53.170
To provide assistance?
00:42:53.170 --> 00:42:54.003
Yes.
00:42:54.003 --> 00:42:55.410
Well that's the thing that we need to explore.
00:42:55.410 --> 00:42:57.606
At the moment we're doing that through third parties
00:42:57.606 --> 00:43:00.100
because we believe they're much more aware of the needs
00:43:00.100 --> 00:43:03.010
and can develop more appropriate targeted programming
00:43:03.010 --> 00:43:05.220
and what our view is is to make sure
00:43:05.220 --> 00:43:07.519
based on what we learn in outreach,
00:43:07.519 --> 00:43:09.410
(woman speaking off mic) excuse me.
00:43:09.410 --> 00:43:10.460
Yeah, all right.
00:43:15.910 --> 00:43:17.717
In the outreach process.
00:43:17.717 --> 00:43:19.640
That's when we also get feedback
00:43:19.640 --> 00:43:22.498
as I just gave the example of my own personal experience.
00:43:22.498 --> 00:43:25.482
What our responsibility will be
00:43:25.482 --> 00:43:28.676
in terms of the direct provision of assistance
00:43:28.676 --> 00:43:31.690
is to make sure that we're providing adequate funding
00:43:31.690 --> 00:43:36.517
for those agencies that are in the business of doing that
00:43:36.517 --> 00:43:38.390
because they have the specific needs
00:43:38.390 --> 00:43:41.820
and can design those in a much better way than we can.
00:43:41.820 --> 00:43:45.010
What we will do is based on the feedback we receive
00:43:45.010 --> 00:43:46.450
is give that input there as well
00:43:46.450 --> 00:43:51.450
so it could be targeted and is specific to the challenges,
00:43:51.680 --> 00:43:54.960
whether it's transportation, replacement and batteries,
00:43:54.960 --> 00:43:57.417
hotel vouchers, whatever it might be,
00:43:57.417 --> 00:43:59.380
we're trying to get a sense of where
00:43:59.380 --> 00:44:00.900
we can best apply ourselves
00:44:00.900 --> 00:44:03.620
because there are other county agencies
00:44:03.620 --> 00:44:06.260
that are doing other things so we have to be coordinated
00:44:06.260 --> 00:44:09.110
but it's in that outreach that we will provide that input
00:44:09.110 --> 00:44:11.841
and we will be looking and continue to look towards
00:44:11.841 --> 00:44:15.560
third parties to be able to provide those services.
00:44:15.560 --> 00:44:18.170
And is it PG&E's intent to provide resources
00:44:18.170 --> 00:44:20.763
to these third parties so that they can meet the obligations
00:44:20.763 --> 00:44:24.360
that are created when PG&E preemptively turns off the power?
00:44:24.360 --> 00:44:28.780
I think to provide resources as we have been
00:44:28.780 --> 00:44:31.840
in addition to the ADA we provided as I said before,
00:44:31.840 --> 00:44:34.920
the California Foundation for Independent Living
00:44:34.920 --> 00:44:36.910
I think in 2020,
00:44:36.910 --> 00:44:39.000
just something north of five million dollars to do that,
00:44:39.000 --> 00:44:40.560
the year before was only 1.3.
00:44:40.560 --> 00:44:43.158
We'll continue to look to do that in an effective way
00:44:43.158 --> 00:44:46.630
but what that programming is, what those resources are,
00:44:46.630 --> 00:44:49.090
I don't have a view of that at the moment.
00:44:49.090 --> 00:44:51.483
And finally on page 5-34,
00:44:51.483 --> 00:44:55.018
you note that there were no workforce injuries
00:44:55.018 --> 00:44:58.098
during PSPS events, do you see that?
00:44:58.098 --> 00:44:59.871
Mm-hmm.
00:44:59.871 --> 00:45:03.560
Did you track injuries to members of the public
00:45:03.560 --> 00:45:05.154
that were caused by--
00:45:05.154 --> 00:45:08.747
We don't have that system in place to track injuries
00:45:08.747 --> 00:45:12.540
that are caused by the public during PSPS.
00:45:12.540 --> 00:45:14.557
If it's not brought to our attention
00:45:14.557 --> 00:45:17.530
or we don't know about it through some other mechanism,
00:45:17.530 --> 00:45:21.434
we do not have a monitoring system in place to do that.
00:45:21.434 --> 00:45:23.960
Are you seeking to develop such a system
00:45:23.960 --> 00:45:26.760
to evaluate the risk to the public
00:45:26.760 --> 00:45:29.560
that is created by extended power outages
00:45:29.560 --> 00:45:31.240
and the harms that people suffer?
00:45:31.240 --> 00:45:34.130
I believe that more information you have,
00:45:34.130 --> 00:45:36.110
the better you're able to plan and program
00:45:36.110 --> 00:45:39.210
so it's something that I think it's worth considering.
00:45:39.210 --> 00:45:41.500
Thank you Mr Vesey, I have no further questions.
00:45:42.910 --> 00:45:44.380
All right thank you.
00:45:44.380 --> 00:45:45.290
Mr Abrams?
00:45:47.758 --> 00:45:49.570
I'll just remind everybody
00:45:49.570 --> 00:45:51.570
please try to stick to your time limits.
00:45:53.120 --> 00:45:54.375
Thank you, your Honor.
00:45:54.375 --> 00:45:58.800
If I can just two minutes either now
00:45:58.800 --> 00:46:03.088
or in the middle of my cross for a two minute break
00:46:03.088 --> 00:46:07.570
would be appreciated but I can proceed.
00:46:07.570 --> 00:46:08.403
Please proceed
00:46:08.403 --> 00:46:10.760
and we'll take a break it in a little bit.
00:46:10.760 --> 00:46:11.890
Okay.
00:46:11.890 --> 00:46:13.770
Thank you your Honor.
00:46:13.770 --> 00:46:17.486
Mr Vesey, I appreciate you coming into this room.
00:46:17.486 --> 00:46:20.170
I also appreciate that this isn't
00:46:23.120 --> 00:46:25.853
your preferred spot that you'd like to be in.
00:46:25.853 --> 00:46:30.100
I have tried to do my homework the best I could
00:46:30.100 --> 00:46:32.134
to prepare for this testimony
00:46:32.134 --> 00:46:36.530
and as part of that preparation--
00:46:36.530 --> 00:46:41.040
Can we get to the questions please, your Honor?
00:46:41.040 --> 00:46:43.042
I looked back at your background
00:46:43.042 --> 00:46:45.920
and I have some questions regarding that
00:46:47.440 --> 00:46:48.840
but I would like to say that
00:46:51.370 --> 00:46:54.778
if I may and this may be friendly cross but my point is
00:46:54.778 --> 00:46:57.070
is that there's a number of things in your background
00:46:57.070 --> 00:46:58.580
that I think--
00:46:58.580 --> 00:47:00.450
Your Honor, can we have a question
00:47:00.450 --> 00:47:02.057
for the witness please?
00:47:02.057 --> 00:47:03.540
Yeah, but I can't get a half a sentence out
00:47:03.540 --> 00:47:05.720
without you interrupting me.
00:47:05.720 --> 00:47:08.560
Mr Mannheim let's let Mr Abrams finish,
00:47:08.560 --> 00:47:12.206
but I do want to remind you to focus on questions,
00:47:12.206 --> 00:47:14.220
not statements.
00:47:14.220 --> 00:47:15.260
Absolutely your Honor.
00:47:15.260 --> 00:47:16.260
Thank you.
00:47:21.500 --> 00:47:25.590
So part of what I see in your background is
00:47:25.590 --> 00:47:27.610
that you are from New York
00:47:27.610 --> 00:47:30.377
and you have a training in engineering, is that correct?
00:47:30.377 --> 00:47:32.416
That's correct.
00:47:32.416 --> 00:47:37.354
Are those skills valuable to you in your current position?
00:47:37.354 --> 00:47:39.346
The engineering skills
00:47:39.346 --> 00:47:41.212
or being in New York skills?
00:47:41.212 --> 00:47:42.045
(laughing)
00:47:42.045 --> 00:47:44.430
Yeah sorry, part of this is I do,
00:47:44.430 --> 00:47:45.780
so I'm from New York myself
00:47:45.780 --> 00:47:49.120
and I feel like that provides great background
00:47:49.120 --> 00:47:52.360
and so I'm trying to provide some complements here
00:47:52.360 --> 00:47:53.860
and trying to provide some support.
00:47:53.860 --> 00:47:56.350
So the answer is the engineering background,
00:47:56.350 --> 00:47:59.118
my undergraduate degrees are both in
00:47:59.118 --> 00:48:00.840
Bachelor of Arts and economics
00:48:00.840 --> 00:48:02.730
and a Bachelor of Science in mechanical engineering
00:48:02.730 --> 00:48:05.560
and then a master's in applied science
00:48:05.560 --> 00:48:08.120
and something which was at that time called energetics.
00:48:08.120 --> 00:48:11.720
I find all those, all that academic training
00:48:12.630 --> 00:48:14.980
to be useful in my career.
00:48:16.350 --> 00:48:17.183
Excellent.
00:48:17.183 --> 00:48:20.890
So it'd be safe to assume that from that background
00:48:20.890 --> 00:48:23.698
that you're a person who likes to get things done
00:48:23.698 --> 00:48:26.798
and that being in a position that you are in
00:48:26.798 --> 00:48:30.450
you like to focus on what you accomplish?
00:48:32.689 --> 00:48:35.433
If the question is I'm focused and like to get things done
00:48:35.433 --> 00:48:37.330
and focus on what I accomplished, yes.
00:48:41.100 --> 00:48:44.970
I also see that you worked at Con Ed
00:48:44.970 --> 00:48:46.980
earlier in your career, is that correct?
00:48:46.980 --> 00:48:47.813
Yes.
00:48:50.010 --> 00:48:54.670
Part of what was with Con Edison is their
00:48:56.200 --> 00:48:58.670
Edison laboratories where there was,
00:49:00.940 --> 00:49:03.211
innovation was the drive
00:49:03.211 --> 00:49:07.160
and I'm wondering how given that background
00:49:07.160 --> 00:49:11.070
you see PG&E situated to look at innovation?
00:49:13.360 --> 00:49:16.390
Well I'm not familiar with the Con Ed program
00:49:16.390 --> 00:49:18.070
although for number of years
00:49:18.070 --> 00:49:19.750
I was a director of research and development
00:49:19.750 --> 00:49:21.260
for Niagara Mohawk Power Corporation,
00:49:21.260 --> 00:49:24.300
so technology has always been a part of what we've done.
00:49:24.300 --> 00:49:26.380
I think technology and innovation is
00:49:26.380 --> 00:49:29.310
a critical component of our industry.
00:49:30.270 --> 00:49:34.360
We have groups within PG&E,
00:49:34.360 --> 00:49:38.200
which are focused on a number of technological opportunities
00:49:38.200 --> 00:49:40.190
to improve our performance.
00:49:40.190 --> 00:49:42.470
That's across the board so if the question is
00:49:42.470 --> 00:49:45.528
do I value that capability in the pursuit of our business,
00:49:45.528 --> 00:49:47.026
yes I do.
00:49:47.026 --> 00:49:50.108
And where is that now in terms of
00:49:50.108 --> 00:49:54.130
what would you say are your laboratories for research
00:49:54.130 --> 00:49:55.770
and development currently?
00:49:55.770 --> 00:49:57.330
We don't have necessarily
00:49:57.330 --> 00:49:58.970
a laboratory research and development.
00:49:58.970 --> 00:50:02.110
We do have a group which does all our materials testing
00:50:02.110 --> 00:50:05.740
and they do do other technology work.
00:50:05.740 --> 00:50:08.320
We have a group within the corporation,
00:50:08.320 --> 00:50:13.320
not within the utility that explores various opportunities
00:50:13.404 --> 00:50:17.570
such as AI big data analysis, intelligent drones,
00:50:17.570 --> 00:50:19.168
that resides within our strat,
00:50:19.168 --> 00:50:21.870
under energy and policy group under innovation
00:50:21.870 --> 00:50:23.880
there was a grid innovation group.
00:50:23.880 --> 00:50:26.280
We have a third group which is combined with
00:50:27.210 --> 00:50:31.100
our metering verification which does work
00:50:31.100 --> 00:50:33.530
in terms of communication metering, batteries,
00:50:33.530 --> 00:50:35.150
advanced batteries, charging stations,
00:50:35.150 --> 00:50:37.590
so it's distributed in the business,
00:50:37.590 --> 00:50:39.340
two of those being within the company
00:50:39.340 --> 00:50:41.190
and one being within the corporation.
00:50:46.227 --> 00:50:48.460
I also noted that
00:50:50.443 --> 00:50:54.185
there was a book written by you in 2016
00:50:54.185 --> 00:50:58.490
entitled "Unlocking the Benefits of Restructuring",
00:50:58.490 --> 00:50:59.370
is that correct?
00:50:59.370 --> 00:51:00.510
The date's not correct.
00:51:00.510 --> 00:51:01.630
Oh.
The title's correct.
00:51:01.630 --> 00:51:06.197
It was written in the I believe probably late 90s,
00:51:06.197 --> 00:51:07.898
early 2000s.
Okay.
00:51:07.898 --> 00:51:09.580
But thank you for recognizing it,
00:51:09.580 --> 00:51:12.200
not many people actually know that book exists.
00:51:12.200 --> 00:51:15.600
Thank you and I wish I had time to read it before--
00:51:15.600 --> 00:51:16.978
Only if you're an insomniac.
00:51:16.978 --> 00:51:18.993
Coming into this hearing.
00:51:18.993 --> 00:51:22.243
And the reason why I bring that up is obviously
00:51:22.243 --> 00:51:25.600
the title and what the content was in that book
00:51:25.600 --> 00:51:29.162
is very applicable to what we have here today before us.
00:51:29.162 --> 00:51:34.162
Can you help describe what in that book you think
00:51:34.195 --> 00:51:37.597
applies to the restructuring that's going on
00:51:37.597 --> 00:51:39.130
right now with PG&E?
00:51:40.500 --> 00:51:44.150
Well I'm not particularly sure that the premise is correct
00:51:44.150 --> 00:51:49.047
because I don't know the specific thrust of that book
00:51:50.080 --> 00:51:53.110
that was written was at a time in the industry
00:51:53.110 --> 00:51:55.018
where there was a question of whether
00:51:55.018 --> 00:51:57.816
transmission owning companies
00:51:57.816 --> 00:52:02.256
should cede their operational responsibilities to ISOs.
00:52:02.256 --> 00:52:04.872
I think that has already been determined
00:52:04.872 --> 00:52:08.840
so that was a very focused subject.
00:52:08.840 --> 00:52:11.750
It was about decision making, who should have it,
00:52:11.750 --> 00:52:13.510
governance structures around transformation.
00:52:13.510 --> 00:52:18.510
Specifically what structural organizational structure
00:52:19.451 --> 00:52:23.420
around transmission assets best served at that time
00:52:23.420 --> 00:52:26.010
the opening up of competitive energy markets.
00:52:26.010 --> 00:52:28.280
So it's hard for me to see what was there
00:52:28.280 --> 00:52:31.210
bridging over to the issues in front of us today.
00:52:31.210 --> 00:52:32.043
Thank you.
00:52:32.043 --> 00:52:36.930
One of the things that I did note as I looked at your book
00:52:36.930 --> 00:52:41.930
was this focus on connecting profits to performance
00:52:44.600 --> 00:52:49.340
and I tried to probe on this subject matter earlier
00:52:49.340 --> 00:52:52.500
and wanted to ask you some follow-up questions for that.
00:52:52.500 --> 00:52:57.252
How is it currently that PG&E connects,
00:52:57.252 --> 00:53:01.950
as you stated in your book, profits to performance?
00:53:01.950 --> 00:53:04.780
The issue of, let me see if I can remember back to that
00:53:04.780 --> 00:53:08.460
because I also testified in front of Congress on this point
00:53:08.460 --> 00:53:11.170
was the question between rate of return,
00:53:11.170 --> 00:53:14.460
rate making and performance based rate making.
00:53:15.920 --> 00:53:18.200
And I remember my view is always that
00:53:18.200 --> 00:53:20.380
all rate making is incentive rate making
00:53:20.380 --> 00:53:22.690
just what does it incent you to do?
00:53:24.150 --> 00:53:28.328
And the question there was in terms of thinking about
00:53:28.328 --> 00:53:31.212
the rate structures that in some instances
00:53:31.212 --> 00:53:33.220
depending on policy outcomes
00:53:33.220 --> 00:53:35.867
there are rate designs that may lead you to those outcomes
00:53:35.867 --> 00:53:39.710
versus others that investor-owned utilities
00:53:39.710 --> 00:53:41.710
are all about attracting the capital they need
00:53:41.710 --> 00:53:42.870
and have to provide a return
00:53:42.870 --> 00:53:44.708
so there's some level of a question of
00:53:44.708 --> 00:53:47.060
being able to provide a return to that capital
00:53:47.060 --> 00:53:48.770
And that's important.
00:53:48.770 --> 00:53:50.900
But also performance and outcomes
00:53:50.900 --> 00:53:54.610
and they've always been debates in terms of regular rate
00:53:54.610 --> 00:53:56.830
and regulatory design as to whether
00:53:56.830 --> 00:53:59.900
you from a public policy want to encourage
00:54:01.700 --> 00:54:03.750
demand-side management activities,
00:54:03.750 --> 00:54:06.780
the degree you'll have rate structures such as net metering
00:54:06.780 --> 00:54:08.810
that deals with the deployment of
00:54:08.810 --> 00:54:10.090
consumer oriented equipment.
00:54:10.090 --> 00:54:12.500
So rate design in and of itself,
00:54:12.500 --> 00:54:13.860
which is the mechanism by
00:54:13.860 --> 00:54:17.040
which you do connect profitability of an enterprise
00:54:17.040 --> 00:54:21.480
to what it does is in some level directly related
00:54:21.480 --> 00:54:23.860
to public policy outcomes you want to achieve
00:54:23.860 --> 00:54:27.860
and sometimes you find that in the tariff structure.
00:54:29.280 --> 00:54:30.655
Let me interrupt.
00:54:30.655 --> 00:54:33.075
I would like to make sure we stay on topic
00:54:33.075 --> 00:54:35.968
for purposes of this plan of reorganization
00:54:35.968 --> 00:54:39.690
and so can you tie your question
00:54:39.690 --> 00:54:42.300
back to this plan of reorganization?
00:54:44.260 --> 00:54:47.060
So Mr Vesey wrote a book about
00:54:47.060 --> 00:54:50.320
the benefits of restructuring so my question is
00:54:50.320 --> 00:54:54.055
is how does his learnings associated with writing that book
00:54:54.055 --> 00:54:58.480
apply to the current plan of reorganization.
00:54:58.480 --> 00:55:00.820
Okay and he already said that
00:55:00.820 --> 00:55:03.390
the restructuring that was being discussed there
00:55:03.390 --> 00:55:05.040
was focused on ISO,
00:55:06.300 --> 00:55:10.370
ceding assets to the ISO and transmission operations
00:55:10.370 --> 00:55:13.820
so I think let's move forward from this topic.
00:55:13.820 --> 00:55:16.640
I think the focus of the restructuring was different
00:55:16.640 --> 00:55:18.560
than what we're talking about in restructuring
00:55:18.560 --> 00:55:20.610
for this particular plan of organization.
00:55:22.402 --> 00:55:25.480
So the reason why I'm asking the question,
00:55:25.480 --> 00:55:28.750
I guess let me ask a follow-up question is that
00:55:28.750 --> 00:55:31.420
the current plan of reorganization doesn't have
00:55:31.420 --> 00:55:33.330
too many financial metrics,
00:55:33.330 --> 00:55:35.974
investment metrics tied to performance
00:55:35.974 --> 00:55:39.233
and so my question is how would you expect
00:55:39.233 --> 00:55:42.140
to have this plan of reorganization
00:55:42.140 --> 00:55:47.140
tying your financial incentives to performance?
00:55:50.050 --> 00:55:53.890
Well as I mentioned yesterday, I'll mention again,
00:55:53.890 --> 00:55:55.010
having been here six months
00:55:55.010 --> 00:55:59.100
my primary focus has been on the prosecution of
00:55:59.100 --> 00:56:02.030
our wild season/fire season plan
00:56:02.030 --> 00:56:05.160
and also bring operational stability to the business
00:56:05.160 --> 00:56:09.350
as well as developing some core hypotheses
00:56:09.350 --> 00:56:12.950
necessary to move forward and reimagine the company.
00:56:12.950 --> 00:56:16.320
I have not been involved deeply in the reorganization
00:56:16.320 --> 00:56:17.950
of the financial aspects of it
00:56:17.950 --> 00:56:20.690
and so I'm not able to give you a thoughtful answer
00:56:20.690 --> 00:56:24.390
but suggest perhaps you pose those to Jason Wells
00:56:24.390 --> 00:56:26.890
who will be testifying later.
00:56:28.400 --> 00:56:29.233
Thank you.
00:56:29.233 --> 00:56:31.040
As the CEO would you not want
00:56:31.040 --> 00:56:34.180
to have a financial investment structure
00:56:34.180 --> 00:56:36.886
that focuses on your priorities?
00:56:36.886 --> 00:56:38.690
Objection.
00:56:38.690 --> 00:56:42.910
He just said that's not his area of focus.
00:56:44.922 --> 00:56:47.060
I'll allow a brief answer
00:56:47.060 --> 00:56:49.220
and if you want to refer that to a better witness
00:56:49.220 --> 00:56:52.148
that's okay as well.
00:56:52.148 --> 00:56:54.740
One of the things that we continue to talk about
00:56:54.740 --> 00:56:55.740
is corporate structure.
00:56:55.740 --> 00:56:58.320
We have a separate corporate entity
00:56:58.320 --> 00:56:59.570
from the holding company,
00:56:59.570 --> 00:57:01.790
the holding company's involvement
00:57:01.790 --> 00:57:04.494
in terms of the financial aspects is to make sure that
00:57:04.494 --> 00:57:09.290
we literally identify the resources we need
00:57:09.290 --> 00:57:12.517
on an annual basis to be able to fulfill our mission.
00:57:12.517 --> 00:57:15.739
Safety, reliability, continuity of service.
00:57:15.739 --> 00:57:20.739
In that process we go through significant work on risk,
00:57:21.280 --> 00:57:24.260
we provide those requirements of the corporation
00:57:24.260 --> 00:57:27.390
and it sort of brings together the points that you speak of
00:57:27.390 --> 00:57:30.454
so quite honestly from a financial perspective in my role,
00:57:30.454 --> 00:57:33.770
my role is to assure that I make the correct allocation
00:57:33.770 --> 00:57:36.340
of financial resources that are provided by the corporation
00:57:36.340 --> 00:57:38.560
and human resources that are provided by
00:57:38.560 --> 00:57:40.500
and that is much more of a budgeting exercise
00:57:40.500 --> 00:57:42.850
than a financial exercise so that's why
00:57:42.850 --> 00:57:45.831
I'm not able to give you the insights that you would like.
00:57:45.831 --> 00:57:48.810
Thank you, I'm trying to tie the two together.
00:57:48.810 --> 00:57:52.417
So part of this is your investment side,
00:57:52.417 --> 00:57:57.417
which is highly oriented towards short-term yield
00:57:59.598 --> 00:58:02.640
and obviously what a company needs is sort of
00:58:02.640 --> 00:58:04.870
those longer-term investments.
00:58:04.870 --> 00:58:07.260
So what I'm trying to understand is
00:58:09.749 --> 00:58:13.360
how do you meet that gap between those two things?
00:58:16.390 --> 00:58:20.390
Not fully sure I understand the question
00:58:20.390 --> 00:58:23.650
but if you ask me how the ongoing operation of
00:58:23.650 --> 00:58:25.560
the business reliance to the achievement of
00:58:25.560 --> 00:58:28.137
financial objectives of the corporation,
00:58:28.137 --> 00:58:33.137
as I said before from the operating side we basically will
00:58:34.870 --> 00:58:36.750
prepare our work plans,
00:58:36.750 --> 00:58:39.060
which have short-term work and long-term work
00:58:39.060 --> 00:58:42.320
of capital work as well as the operational expense
00:58:42.320 --> 00:58:46.284
we need to maintain our system to provide services.
00:58:46.284 --> 00:58:50.050
The discussion around whether we can get
00:58:50.050 --> 00:58:52.670
the right allocation is what is then decided
00:58:52.670 --> 00:58:55.450
by the corporation in terms of its financial plans
00:58:55.450 --> 00:58:58.610
and its outcomes and our our plan is to make sure
00:58:58.610 --> 00:59:00.170
that we get the resources we have
00:59:00.170 --> 00:59:02.510
and execute that plan on schedule
00:59:02.510 --> 00:59:04.970
so there are no surprises coming out of poor operations
00:59:04.970 --> 00:59:06.810
from a financial perspective.
00:59:06.810 --> 00:59:08.340
But the setting of those goals,
00:59:08.340 --> 00:59:10.630
what's available for us to use,
00:59:10.630 --> 00:59:14.530
how we think about our capital budget and our expenditures
00:59:14.530 --> 00:59:16.930
is determined in the office of the CFO
00:59:19.304 --> 00:59:22.000
in consultation with the CEO and of course
00:59:22.000 --> 00:59:23.980
the Finance Committee of the board
00:59:23.980 --> 00:59:26.059
and so we're much more responsive
00:59:26.059 --> 00:59:26.892
from a budgeting perspective
00:59:26.892 --> 00:59:29.510
and if I hit my budgets, that's how I contribute to
00:59:29.510 --> 00:59:31.410
the financial outcomes of the company.
00:59:36.180 --> 00:59:39.320
How much are you interacting
00:59:39.320 --> 00:59:41.500
on a regular basis with customers?
00:59:42.772 --> 00:59:44.660
With customers?
00:59:46.650 --> 00:59:48.670
My interaction with customers is through
00:59:52.301 --> 00:59:54.370
our customer service organization,
00:59:54.370 --> 00:59:56.980
which means that I go to call centers,
00:59:56.980 --> 00:59:58.240
I've been teed on phones,
00:59:58.240 --> 01:00:00.310
I've listened customers calls.
01:00:00.310 --> 01:00:03.856
I do deal with some larger customers on a one-off basis.
01:00:03.856 --> 01:00:06.270
I'm in the community so literally
01:00:06.270 --> 01:00:09.098
I'm facing customers every day.
01:00:09.098 --> 01:00:13.710
I have been up to Paradise my second day in the job,
01:00:13.710 --> 01:00:15.680
I've been down to San Bruno,
01:00:15.680 --> 01:00:18.170
so I can make sure I don't isolate myself from issues
01:00:18.170 --> 01:00:19.500
that I should be aware of,
01:00:19.500 --> 01:00:22.896
but I am not regularly in touch with residential customers
01:00:22.896 --> 01:00:25.110
as a programmatic focus.
01:00:30.391 --> 01:00:32.811
Through this plan of reorganization
01:00:32.811 --> 01:00:36.352
have you considered the impacts of the investigation
01:00:36.352 --> 01:00:39.610
into the Kincade fire and what the implications
01:00:39.610 --> 01:00:40.460
of that might be?
01:00:41.520 --> 01:00:43.900
I am aware of the events around the Kincade fire,
01:00:43.900 --> 01:00:46.990
I'm also aware that that is currently an investigation
01:00:46.990 --> 01:00:50.010
that is being managed by Cal Fire.
01:00:50.010 --> 01:00:51.860
My organization has provided input
01:00:51.860 --> 01:00:55.410
but we were not actively engaged in any of our own work
01:00:55.410 --> 01:00:58.320
around causality there at this time.
01:01:04.282 --> 01:01:07.004
You mentioned yesterday in your testimony
01:01:07.004 --> 01:01:12.004
to Mr Long that you leverage Net Promoter Score
01:01:12.030 --> 01:01:14.500
and you go into more detail on this
01:01:14.500 --> 01:01:18.144
on page 5-34 of your testimony.
01:01:18.144 --> 01:01:21.790
What are the tools that you use to determine
01:01:21.790 --> 01:01:23.340
this Net Promoter Score?
01:01:24.420 --> 01:01:27.850
What I believe I said yesterday to the question
01:01:27.850 --> 01:01:30.625
as to whether the current customer metric
01:01:30.625 --> 01:01:34.930
around escalated complaints to the Commission
01:01:34.930 --> 01:01:38.290
was sufficient or adequate and I know I'm paraphrasing
01:01:38.290 --> 01:01:40.203
and I had said that it's not
01:01:40.203 --> 01:01:43.550
and then I'm more inclined to move toward something
01:01:43.550 --> 01:01:45.470
like Net Promoter Score as a measure of
01:01:45.470 --> 01:01:48.230
customer satisfaction or experience
01:01:48.230 --> 01:01:52.901
and that historically we used customer satisfaction metrics
01:01:52.901 --> 01:01:55.290
that were benchmarkable whether they were,
01:01:55.290 --> 01:01:59.980
I can't remember the name of the organization that does it
01:01:59.980 --> 01:02:01.410
but that we were in this middle ground
01:02:01.410 --> 01:02:03.770
given the disruption at the customer interface.
01:02:03.770 --> 01:02:05.870
So we were not using it, it is not designed
01:02:05.870 --> 01:02:09.900
but it's my intention to move towards something like that
01:02:09.900 --> 01:02:11.900
as a measure of the customer experience.
01:02:13.200 --> 01:02:14.770
And you're moving towards that
01:02:14.770 --> 01:02:17.686
because you're customer satisfaction metrics
01:02:17.686 --> 01:02:20.629
are not serving your purposes?
01:02:20.629 --> 01:02:23.620
I believe that something like Net Promoter Scores
01:02:23.620 --> 01:02:26.990
are the best way to promote or target
01:02:26.990 --> 01:02:30.370
or improve the customer experience.
01:02:30.370 --> 01:02:33.161
I do believe that, having implemented it
01:02:33.161 --> 01:02:36.079
from a more traditional customer service metric
01:02:36.079 --> 01:02:39.570
in Australia where I ran a retail energy business
01:02:39.570 --> 01:02:42.815
where we fought for our 3.2 million customers every day,
01:02:42.815 --> 01:02:46.440
the movement to a Net Promoter Score gave us
01:02:46.440 --> 01:02:49.484
a better insight into what drives the customer experience
01:02:49.484 --> 01:02:51.310
so I think it's much more informative
01:02:51.310 --> 01:02:53.990
and that's why I'm inclined to move that way.
01:02:53.990 --> 01:02:56.979
The rap against it is typically not done
01:02:56.979 --> 01:02:59.458
in non-competitive businesses
01:02:59.458 --> 01:03:01.620
but my experience has been that
01:03:01.620 --> 01:03:04.480
even non-competitive businesses such as the Australian Post
01:03:04.480 --> 01:03:06.770
once they implemented it got much better outcomes
01:03:06.770 --> 01:03:09.930
and that's why I'm a big fan of things such as
01:03:09.930 --> 01:03:11.130
Net Promoter Score.
01:03:12.470 --> 01:03:13.610
Let's be off the record.
01:03:13.610 --> 01:03:15.780
Would this be a good time for a break?
01:03:15.780 --> 01:03:16.663
Sure.
01:03:16.663 --> 01:03:18.010
All right let's take a five-minute break
01:03:18.010 --> 01:03:21.288
and I mean five minutes, okay?
01:03:21.288 --> 01:03:22.290
Thank you.
01:03:24.437 --> 01:03:25.970
Your Honor?
01:03:25.970 --> 01:03:26.803
Yes?
01:03:26.803 --> 01:03:27.720
While we're off the record.
01:03:27.720 --> 01:03:28.553
Yes?
01:03:34.520 --> 01:03:37.210
I'll mark for identification a number of exhibits.
01:03:37.210 --> 01:03:39.700
First is PG&E-9.
01:03:42.644 --> 01:03:47.001
It's a document plan of reorganization.
01:03:47.001 --> 01:03:49.001
OII-2019DRPUBADV008-Q07.
01:04:00.700 --> 01:04:01.533
The next one
01:04:03.120 --> 01:04:06.240
for ease of identification
01:04:06.240 --> 01:04:08.010
I'm not going to repeat all the stuff
01:04:08.010 --> 01:04:10.060
that kind of copies over from page to page
01:04:10.060 --> 01:04:13.150
and just give the data response number of reference,
01:04:13.150 --> 01:04:17.823
but this is for identification PG&E-10DRTURN015-Q01.
01:04:27.350 --> 01:04:29.237
This time I marked for identification
01:04:29.237 --> 01:04:32.433
as PG&E-11DRTURN018-Q02ATCH01,
01:04:41.300 --> 01:04:43.390
cost of debt and maturities.
01:04:44.450 --> 01:04:46.890
At this time I will mark for identification
01:04:46.890 --> 01:04:51.890
as PG&E-12DRMISCATCH03.
01:04:55.900 --> 01:04:58.050
At this time I will mark for identification
01:04:58.050 --> 01:05:00.513
as Exhibit PG&E13DRMISCATH04.
01:05:11.220 --> 01:05:13.220
At this time I will mark for identification
01:05:13.220 --> 01:05:15.837
as PG&E-14DRMISCATCH05TAB13.
01:05:22.850 --> 01:05:27.850
At this time I will mark for identification as exhibit
01:05:28.950 --> 01:05:33.950
PG&E-15DR CLECA PG&E 001-Q02
01:05:37.580 --> 01:05:40.497
and DR CLECA 01-Q02.
01:05:46.130 --> 01:05:48.010
At this time I'll mark for identification
01:05:48.010 --> 01:05:52.280
as exhibit MCE-X1
01:05:52.280 --> 01:05:53.530
Marin Clean Energy
01:05:53.530 --> 01:05:56.400
cross-examination exhibit for witness Wells.
01:05:57.287 --> 01:06:01.812
All right, at this time we will turn to cross-examination
01:06:01.812 --> 01:06:03.528
by Mr Abrams.
01:06:03.528 --> 01:06:04.570
Please proceed.
01:06:05.930 --> 01:06:07.280
Thank you your Honor.
01:06:07.280 --> 01:06:10.548
Mr Vesey, we left off with you describing
01:06:10.548 --> 01:06:13.747
customer satisfaction metrics
01:06:13.747 --> 01:06:18.460
and wanted to understand why you feel
01:06:18.460 --> 01:06:20.705
there's not more of a commitment to metrics
01:06:20.705 --> 01:06:24.724
in your current plan of reorganization that's been proposed?
01:06:24.724 --> 01:06:26.100
Well I think it's,
01:06:27.530 --> 01:06:28.950
we'll evolve.
01:06:28.950 --> 01:06:32.240
The question is what is it that you want to measure,
01:06:32.240 --> 01:06:35.069
what are the key processes that yield performance,
01:06:35.069 --> 01:06:38.040
and I think one has to be thoughtful in this
01:06:38.040 --> 01:06:41.310
and part of the entire question of re-imagining the company
01:06:41.310 --> 01:06:44.490
comes down to what will drive the appropriate outcomes
01:06:44.490 --> 01:06:46.706
and therefore how you want to measure them?
01:06:46.706 --> 01:06:49.120
Metrics become a very important element
01:06:49.120 --> 01:06:51.150
because you want to make sure you get the right outcomes
01:06:51.150 --> 01:06:53.290
and not the ones you don't expect.
01:06:55.230 --> 01:06:59.908
So coming into the organization you understood that
01:06:59.908 --> 01:07:04.686
there was a significant trust gap between PG&E
01:07:04.686 --> 01:07:07.540
and their customers, it's that safe to assume?
01:07:08.480 --> 01:07:10.130
I'll accept that premise, yeah.
01:07:12.139 --> 01:07:15.230
Do you feel that metrics and performance
01:07:15.230 --> 01:07:19.200
towards those metrics is a way to cut through
01:07:19.200 --> 01:07:22.282
perhaps that trust gap that might be more subjective
01:07:22.282 --> 01:07:23.865
in other ways?
01:07:23.865 --> 01:07:28.090
I'm not sure that metrics will,
01:07:28.090 --> 01:07:30.940
because metrics tend to be internal measures
01:07:30.940 --> 01:07:32.810
and therefore metrics in and of them themselves
01:07:32.810 --> 01:07:34.280
won't do anything for that.
01:07:34.280 --> 01:07:37.554
The thing that closes the trust gap is
01:07:37.554 --> 01:07:41.490
fundamentally fully understanding expectations
01:07:41.490 --> 01:07:44.787
that your customers have and regardless of anything else
01:07:44.787 --> 01:07:47.160
living up to the commitments that you make
01:07:47.160 --> 01:07:51.250
to provide them with a safe and affordable product.
01:07:52.570 --> 01:07:54.823
How do you currently measure the effectiveness
01:07:54.823 --> 01:07:58.102
of PSPS communications?
01:07:58.102 --> 01:08:02.170
PSPS communications which is significant issues
01:08:02.170 --> 01:08:05.000
that were working on has to do with the number of customers
01:08:05.000 --> 01:08:06.280
that you should have notified
01:08:06.280 --> 01:08:08.880
and those that were not notified
01:08:08.880 --> 01:08:12.070
because of systemic issues.
01:08:12.070 --> 01:08:14.890
The reason I say that is because we do have events
01:08:14.890 --> 01:08:16.990
where weather changes on us rapidly
01:08:16.990 --> 01:08:21.400
and we will always error to the side of de-energizing
01:08:21.400 --> 01:08:22.980
versus not de-energizing
01:08:22.980 --> 01:08:25.990
because we haven't notified a particular set of customers.
01:08:26.844 --> 01:08:29.200
But the straightforward measure
01:08:29.200 --> 01:08:31.360
and its work we are undertaking now
01:08:31.360 --> 01:08:33.510
is really who should have been notified,
01:08:33.510 --> 01:08:35.040
who was and what that percentage is
01:08:35.040 --> 01:08:37.390
and knowing that any gap there is unacceptable.
01:08:39.900 --> 01:08:43.820
So measurement of effectiveness,
01:08:43.820 --> 01:08:47.230
so that's where I'm trying to probe.
01:08:47.230 --> 01:08:52.190
So how is a measure of effective communications,
01:08:52.190 --> 01:08:55.400
which is different than what you just described,
01:08:55.400 --> 01:08:58.150
measurement of effective communications
01:08:58.150 --> 01:09:00.940
and how is that built into the PSPS plans
01:09:00.940 --> 01:09:04.176
and the plan of reorganization?
01:09:04.176 --> 01:09:06.056
It currently,
01:09:06.056 --> 01:09:07.630
well you've asked me two things.
01:09:07.630 --> 01:09:12.450
So in the PSPS plan the only arbiter of effectiveness
01:09:12.450 --> 01:09:13.910
of communication are those people
01:09:13.910 --> 01:09:16.610
who are supposed to be receiving the communications.
01:09:16.610 --> 01:09:19.230
I think that's the point you're getting.
01:09:19.230 --> 01:09:22.460
Infective communication is not just touching
01:09:22.460 --> 01:09:24.940
and getting a response that somebody
01:09:24.940 --> 01:09:26.390
has been communicated for,
01:09:26.390 --> 01:09:30.037
it's what has been communicated, was that message received,
01:09:30.037 --> 01:09:33.290
was it actionable, these are all very good points
01:09:33.290 --> 01:09:35.550
and it's something that we have to really up our game in
01:09:35.550 --> 01:09:39.780
because I will say that when I say they were failures
01:09:39.780 --> 01:09:42.920
in the way we executed the PSPS ib the last fire season
01:09:42.920 --> 01:09:44.760
most of it comes down to coordination
01:09:44.760 --> 01:09:47.990
and communications with parties outside of the company.
01:09:47.990 --> 01:09:49.980
Given that would you say it's safe to assume
01:09:49.980 --> 01:09:52.316
that you have a lot of communication metrics
01:09:52.316 --> 01:09:56.397
around things that are on the revenue side of your business
01:09:56.397 --> 01:09:59.677
and not as many that are on the things
01:09:59.677 --> 01:10:01.550
that are regarding safety?
01:10:02.730 --> 01:10:05.135
Well I don't know if I would agree with that.
01:10:05.135 --> 01:10:08.491
The questions around metrics on the revenue side
01:10:08.491 --> 01:10:12.036
versus safety, we have plenty of measures on the safety side
01:10:12.036 --> 01:10:14.020
but now you've asked me a different question,
01:10:14.020 --> 01:10:15.120
are they effective or not,
01:10:15.120 --> 01:10:17.030
which is still fundamental.
01:10:17.030 --> 01:10:19.056
I don't know that I can tell you that we have
01:10:19.056 --> 01:10:22.313
in pure numbers more measures around financial performance
01:10:22.313 --> 01:10:25.173
versus safety performance.
01:10:25.173 --> 01:10:27.870
I just don't have a view of that.
01:10:27.870 --> 01:10:31.093
I think that we have numerous measures
01:10:31.093 --> 01:10:34.030
and they're very broad, they cover many issues.
01:10:34.030 --> 01:10:36.738
I just don't know, I just can't agree with the fact
01:10:36.738 --> 01:10:39.730
that measures we have per se on the financial
01:10:39.730 --> 01:10:42.860
or corporate side outweigh in terms of numbers
01:10:42.860 --> 01:10:45.510
of those we have in other parts of our business.
01:10:45.510 --> 01:10:49.150
So I assume that you have a marketing communication
01:10:49.150 --> 01:10:53.690
or organization that uses your typical Marcom metrics
01:10:53.690 --> 01:10:57.700
to understand customers reach, brand identity,
01:10:58.810 --> 01:11:02.910
and sort of the usual click-through rates
01:11:02.910 --> 01:11:04.955
and those types of measures that understand
01:11:04.955 --> 01:11:08.500
how people are perceiving your communications
01:11:08.500 --> 01:11:11.358
in terms of marketing and communications and advertising,
01:11:11.358 --> 01:11:12.800
is that correct?
01:11:12.800 --> 01:11:16.510
We have a communications group that communicates,
01:11:16.510 --> 01:11:18.475
it's responsible for communicating inside
01:11:18.475 --> 01:11:20.970
and outside of the company,
01:11:20.970 --> 01:11:24.297
it is within the corporate enterprise.
01:11:24.297 --> 01:11:26.760
I assume they have many metrics,
01:11:26.760 --> 01:11:29.620
I can't say what the list you just went through
01:11:29.620 --> 01:11:31.520
is all of them, I just don't really know
01:11:31.520 --> 01:11:34.820
but I'm assuming they have a set of metrics
01:11:34.820 --> 01:11:37.880
that they use to manage their responsibilities.
01:11:37.880 --> 01:11:40.010
And how do they report that to you
01:11:40.010 --> 01:11:43.337
as the CEO about how effective the communications are?
01:11:43.337 --> 01:11:46.040
I don't receive any reports on the effectiveness
01:11:46.040 --> 01:11:47.440
of corporate communications.
01:11:53.360 --> 01:11:55.938
You stated yesterday in your testimony
01:11:55.938 --> 01:11:59.690
that you have 42 years of industry experience
01:12:02.408 --> 01:12:05.440
and I want to understand given that,
01:12:05.440 --> 01:12:07.680
how you go about getting
01:12:10.020 --> 01:12:12.513
experience outside the utility industry.
01:12:12.513 --> 01:12:15.416
Part of what is being discussed here is
01:12:15.416 --> 01:12:19.274
the safety orientation, the culture of PG&E
01:12:19.274 --> 01:12:22.660
and part of that culture has to do with
01:12:22.660 --> 01:12:25.630
how you seek views outside
01:12:25.630 --> 01:12:28.850
the long-standing utility perspective.
01:12:30.590 --> 01:12:32.130
Yeah, how do I do it?
01:12:33.022 --> 01:12:36.360
In the 42 years there's always been a drive
01:12:37.580 --> 01:12:38.780
to always look outside.
01:12:38.780 --> 01:12:42.080
We recognize that there is no city safe.
01:12:42.080 --> 01:12:43.710
I haven't had the opportunity to do it
01:12:43.710 --> 01:12:45.930
in the six months that I've been here
01:12:45.930 --> 01:12:49.600
but specifically to a question like safety,
01:12:51.080 --> 01:12:52.290
I can tell you that in my,
01:12:52.290 --> 01:12:56.220
when I was the CEO of AGL in Australia
01:12:56.220 --> 01:13:00.445
that we would organize visits to other firms.
01:13:00.445 --> 01:13:03.370
I can tell you for a fact that myself
01:13:03.370 --> 01:13:07.030
and I took the my board to sit down with Qantas,
01:13:07.030 --> 01:13:09.008
which has one of the best safety records
01:13:09.008 --> 01:13:12.390
in the airline industry so we could take learnings
01:13:12.390 --> 01:13:15.880
and those learnings move beyond just the occupational safety
01:13:15.880 --> 01:13:18.820
but to psychological safety broadly,
01:13:18.820 --> 01:13:19.900
that's how you do it.
01:13:19.900 --> 01:13:22.340
Now I haven't had that opportunity to do it here
01:13:22.340 --> 01:13:26.210
but in other places also to visit refineries,
01:13:26.210 --> 01:13:28.240
deal with large mining companies.
01:13:28.240 --> 01:13:31.106
You do that by active engagement with parties outside
01:13:31.106 --> 01:13:33.280
in addition to looking at the literature.
01:13:33.280 --> 01:13:35.326
Now that is all past experience.
01:13:35.326 --> 01:13:37.580
I haven't been here long enough
01:13:37.580 --> 01:13:39.810
to actually start to move on some of those things
01:13:39.810 --> 01:13:41.790
because as I said, my focus was getting stability
01:13:41.790 --> 01:13:44.240
into the organization and managing us
01:13:44.240 --> 01:13:46.780
with the last fire season, taking lessons from that,
01:13:46.780 --> 01:13:49.100
and also developing hypothesis
01:13:49.100 --> 01:13:51.520
that would help us sort of reimagine the company
01:13:51.520 --> 01:13:54.200
based on the last 10 years of experience.
01:13:54.200 --> 01:13:57.210
So I'm talking about this plan of restructuring,
01:13:57.210 --> 01:13:59.510
so what I'm trying to understand is
01:13:59.510 --> 01:14:01.390
in this plan of restructuring
01:14:01.390 --> 01:14:04.650
how are you orienting it so that PG&E
01:14:04.650 --> 01:14:08.670
has those outside experiences and subject matter expertise
01:14:08.670 --> 01:14:12.106
that doesn't necessarily reside within folks
01:14:12.106 --> 01:14:16.890
who have been in the utility sector for a long time?
01:14:16.890 --> 01:14:21.380
Well the sort of affirmative step we took is that
01:14:21.380 --> 01:14:24.060
we did worldwide search,
01:14:24.060 --> 01:14:27.426
literally worldwide for our new chief safety officer.
01:14:27.426 --> 01:14:30.920
That chief safety officer and it's in my testimony
01:14:30.920 --> 01:14:34.920
will join the organization on March 9th.
01:14:34.920 --> 01:14:36.864
They come from outside the industry,
01:14:36.864 --> 01:14:40.360
with the last summary for this executive
01:14:40.360 --> 01:14:43.260
was reporting in to the CEO of Alcoa,
01:14:43.260 --> 01:14:45.120
which is one of the premier,
01:14:45.120 --> 01:14:49.246
now one of the premier providers of occupational safety
01:14:49.246 --> 01:14:51.243
and has set a lot of the standards
01:14:51.243 --> 01:14:54.988
and that person also has experience in mining and chemicals
01:14:54.988 --> 01:14:57.450
so it will bring a whole new perspective
01:14:57.450 --> 01:14:59.910
and the mandate in charge I've given this individual
01:14:59.910 --> 01:15:02.502
is a clean sheet of paper to rethink the way we approach
01:15:02.502 --> 01:15:07.000
not only work for safety but public safety as well,
01:15:07.000 --> 01:15:09.500
which will be expansion of those responsibilities.
01:15:10.500 --> 01:15:14.360
On page 5-2 you mentioned in your testimony,
01:15:14.360 --> 01:15:17.544
enterprise records and information management
01:15:17.544 --> 01:15:21.702
and I understand that you hired a firm called Trove
01:15:21.702 --> 01:15:24.123
to do your systems integration.
01:15:24.123 --> 01:15:26.822
I understand they're very niche
01:15:26.822 --> 01:15:29.430
utility focused organization.
01:15:29.430 --> 01:15:31.910
why did you not turn to a larger system integrator
01:15:31.910 --> 01:15:33.420
for that work?
01:15:33.420 --> 01:15:35.880
A, I'm not knowledgeable of Trove
01:15:35.880 --> 01:15:36.990
or that particular things
01:15:36.990 --> 01:15:39.340
so I really can't give you a thoughtful answer.
01:15:43.410 --> 01:15:46.540
Part of what the plan of reorganization must address
01:15:46.540 --> 01:15:48.208
is how you're going to innovate
01:15:48.208 --> 01:15:53.067
and how you're going to look to turn to renewables.
01:15:53.067 --> 01:15:57.420
One of the things that I see in terms of innovation
01:15:57.420 --> 01:15:59.420
for PG&E is that I read recently
01:15:59.420 --> 01:16:01.704
that you are leveraging blockchain
01:16:01.704 --> 01:16:03.660
and you've attended the North America,
01:16:03.660 --> 01:16:05.824
or your organization attended
01:16:05.824 --> 01:16:08.150
the North America Blockchain Expo,
01:16:08.150 --> 01:16:10.710
which was at the conclusion of the Kinkade fire
01:16:10.710 --> 01:16:12.950
in November 2019.
01:16:12.950 --> 01:16:15.450
How is this blockchain a priority for the company
01:16:15.450 --> 01:16:16.300
during this time?
01:16:17.560 --> 01:16:21.050
Well it isn't necessarily a high one
01:16:21.050 --> 01:16:24.010
because I'm not all that familiar with the visit
01:16:24.010 --> 01:16:26.390
you just cited and I've spent half my career
01:16:26.390 --> 01:16:28.220
trying to actually understand what blockchain is
01:16:28.220 --> 01:16:29.610
and I still don't.
01:16:29.610 --> 01:16:32.240
There are other technologies that are critically important
01:16:32.240 --> 01:16:34.810
to the things that are in front of us.
01:16:34.810 --> 01:16:37.730
Blockchain has great potential
01:16:37.730 --> 01:16:39.460
in being an open ledger system
01:16:39.460 --> 01:16:40.800
and tracking a lot of things.
01:16:40.800 --> 01:16:44.590
It may be helpful in helping to deal with
01:16:44.590 --> 01:16:46.290
the big data challenges ahead of us.
01:16:46.290 --> 01:16:47.950
I don't have any specific insight to it.
01:16:47.950 --> 01:16:50.190
It's one of the things that is being worked on
01:16:50.190 --> 01:16:51.870
within one of these groups of innovation
01:16:51.870 --> 01:16:53.750
that we talked about previously,
01:16:53.750 --> 01:16:56.884
but at the moment it is not on my watch list.
01:16:56.884 --> 01:17:00.140
My plate little bit full of things
01:17:00.140 --> 01:17:01.150
I'm directing at the moment
01:17:01.150 --> 01:17:02.890
so I'm just not aware of that.
01:17:02.890 --> 01:17:05.530
So do you not think that perhaps that points
01:17:05.530 --> 01:17:08.310
to an example of why the plan of reorganization
01:17:08.310 --> 01:17:10.980
needs to be focused on the type of innovation
01:17:10.980 --> 01:17:13.605
that you see as the chief executive officer
01:17:13.605 --> 01:17:15.370
is important to the company?
01:17:15.370 --> 01:17:19.040
Well I believe that coming out of
01:17:19.040 --> 01:17:21.900
the plan of reorganization which is financial
01:17:21.900 --> 01:17:24.140
and one of the big things that we talk about
01:17:24.140 --> 01:17:26.570
and of course we don't have all the detail
01:17:26.570 --> 01:17:29.420
is in this regional reorganization
01:17:29.420 --> 01:17:31.980
and the reason I say that is because
01:17:31.980 --> 01:17:35.590
the ultimate organization the lines
01:17:35.590 --> 01:17:38.890
and the responsibilities and the capabilities
01:17:38.890 --> 01:17:41.130
will be responsive to the key processes
01:17:41.130 --> 01:17:43.610
and the technology that we will deploy
01:17:43.610 --> 01:17:47.285
and so a lot of that is work in progress.
01:17:47.285 --> 01:17:49.920
When we talk about re-imagining the company
01:17:49.920 --> 01:17:51.970
it will be talking to technology,
01:17:51.970 --> 01:17:54.220
it will be talking about how we deploy it,
01:17:54.220 --> 01:17:55.630
how we change our processes,
01:17:55.630 --> 01:17:57.790
that's still a work in process.
01:17:57.790 --> 01:18:00.200
Right now our technology focus quite honestly
01:18:00.200 --> 01:18:02.300
has been in a big way to do a number of things.
01:18:02.300 --> 01:18:04.390
One is to improve our ability to communicate
01:18:04.390 --> 01:18:06.818
during PSPS recognizing, oh excuse me.
01:18:06.818 --> 01:18:09.618
I'm in New York, we already went over that, I apologize.
01:18:12.731 --> 01:18:15.990
So one is to,
01:18:15.990 --> 01:18:17.750
let me pick up again.
01:18:17.750 --> 01:18:19.360
The failure of the web
01:18:19.360 --> 01:18:23.090
at a critical time for us was a major issue
01:18:23.090 --> 01:18:25.663
and so we've worked very hard to reposition that,
01:18:25.663 --> 01:18:30.410
to deal with making sure that we can take the surges
01:18:30.410 --> 01:18:32.580
that we would see in terms of these communications
01:18:32.580 --> 01:18:35.900
and also to make sure that is what is behind
01:18:35.900 --> 01:18:38.804
our website face is compliant
01:18:38.804 --> 01:18:42.760
with all ADA and AAFN customer needs,
01:18:42.760 --> 01:18:45.240
which is a big issue as we just learned
01:18:45.240 --> 01:18:47.940
I think after that it's improving the quality
01:18:47.940 --> 01:18:49.340
of our situational awareness.
01:18:49.340 --> 01:18:52.470
So a lot of technology dealing with the weather,
01:18:52.470 --> 01:18:53.700
ability to predict weather,
01:18:53.700 --> 01:18:58.078
the technology in our wildfire operations center.
01:18:58.078 --> 01:19:00.350
Those are huge additions.
01:19:00.350 --> 01:19:03.410
We are exploring improvements
01:19:03.410 --> 01:19:05.230
in terms of big data analysis
01:19:05.230 --> 01:19:09.280
recognizing that we have deficiencies within our databases
01:19:09.280 --> 01:19:11.320
to make sure that we improve our decision-making
01:19:11.320 --> 01:19:12.840
with the data we have,
01:19:12.840 --> 01:19:14.940
we are currently exploring with a number of firms
01:19:14.940 --> 01:19:17.023
the ability to improve decision making
01:19:17.023 --> 01:19:19.480
based on the vast amounts of data
01:19:19.480 --> 01:19:20.610
that we have to use.
01:19:20.610 --> 01:19:25.610
We are also looking at increased AI use on drones
01:19:26.010 --> 01:19:27.730
to be able to enhance our inspections,
01:19:27.730 --> 01:19:29.060
to be able to see patterns
01:19:29.060 --> 01:19:31.090
to be bringing machine learning.
01:19:31.090 --> 01:19:33.780
So there is a lot there but what is prioritizing
01:19:33.780 --> 01:19:35.990
our look at technology is dealing with the challenge
01:19:35.990 --> 01:19:37.720
that we have during fire season.
01:19:37.720 --> 01:19:40.170
Now I would say after that there are many,
01:19:40.170 --> 01:19:42.881
many other things that we will be looking at
01:19:42.881 --> 01:19:45.190
because one of the things that we have realized
01:19:45.190 --> 01:19:49.500
that there has been a fundamental shift in the environment
01:19:49.500 --> 01:19:50.760
in which we're working
01:19:50.760 --> 01:19:53.030
and the way we think about providing service
01:19:53.030 --> 01:19:54.760
and so we have this wonderful opportunity
01:19:54.760 --> 01:19:57.038
to literally reimagine it.
01:19:57.038 --> 01:20:00.064
The structures that we'll put in place,
01:20:00.064 --> 01:20:01.600
such as a regional structure
01:20:01.600 --> 01:20:04.717
will be responsive to technology and process designs
01:20:04.717 --> 01:20:07.640
that we believe will advance the issues
01:20:07.640 --> 01:20:10.060
and challenge some of the problems that we have had
01:20:10.060 --> 01:20:12.098
and we have not been able to sort
01:20:12.098 --> 01:20:14.960
that continues to bring up the kind of questions
01:20:14.960 --> 01:20:17.270
we're dealing with here and that's specifically
01:20:17.270 --> 01:20:19.250
a very sound and complete understanding of
01:20:19.250 --> 01:20:21.680
our assets and access conditions,
01:20:21.680 --> 01:20:24.277
the risks associated with those,
01:20:24.277 --> 01:20:27.011
that whether we have the appropriate skills
01:20:27.011 --> 01:20:29.880
and competencies to deal with those risks,
01:20:29.880 --> 01:20:31.530
the ability to program that
01:20:31.530 --> 01:20:35.830
and that's a big part the asset management ISO 55,000
01:20:35.830 --> 01:20:38.839
and then the ability to competently execute the work plan,
01:20:38.839 --> 01:20:43.150
which is all about work management and planning.
01:20:43.150 --> 01:20:44.800
Those become some of the major issues.
01:20:44.800 --> 01:20:46.120
They are all process space,
01:20:46.120 --> 01:20:47.730
they are supported by technology
01:20:47.730 --> 01:20:49.975
and they will be deployed as part of this
01:20:49.975 --> 01:20:52.350
structural reorganization,
01:20:52.350 --> 01:20:54.140
not the financial plan of reorganization
01:20:54.140 --> 01:20:57.644
but literally the structural reorganization of the company.
01:20:57.644 --> 01:21:02.060
Do you see that it's an issue that these concepts
01:21:02.060 --> 01:21:04.010
and these things that you've just described
01:21:04.010 --> 01:21:06.780
are not in the official plan of reorganization
01:21:06.780 --> 01:21:08.962
that's filed with bankruptcy court?
01:21:08.962 --> 01:21:12.256
Well because they are not financial issues,
01:21:12.256 --> 01:21:14.739
they are after the fact,
01:21:14.739 --> 01:21:18.190
they are part of getting closer to our customers
01:21:18.190 --> 01:21:23.040
in dealing and being responsive to 1054
01:21:23.040 --> 01:21:24.232
in terms of our performance
01:21:24.232 --> 01:21:27.435
and I'm not involved in the bankruptcy plan,
01:21:27.435 --> 01:21:30.647
the plan of reorganization being principally financial.
01:21:30.647 --> 01:21:33.270
These will allow us to ensure that when we emerge
01:21:33.270 --> 01:21:38.210
we will not be incurring new challenges for ourselves
01:21:38.210 --> 01:21:39.850
either financial or otherwise.
01:21:39.850 --> 01:21:42.620
Do you not think it would reassure the CPUC
01:21:42.620 --> 01:21:45.930
and the public to have those things more baked into that
01:21:45.930 --> 01:21:48.527
given the trust gap that we discussed earlier?
01:21:48.527 --> 01:21:51.460
Trying to predict what would build assurance
01:21:51.460 --> 01:21:52.630
or commonness, I don't know
01:21:52.630 --> 01:21:56.970
but we are planning to discuss these more fully
01:21:56.970 --> 01:21:58.810
as they're pulled out.
01:21:58.810 --> 01:22:02.290
We have the assigned Commissioner ruling that came out,
01:22:02.290 --> 01:22:03.930
which deals to some of these issues
01:22:03.930 --> 01:22:05.830
in which we will be responsive
01:22:05.830 --> 01:22:08.110
to improving our plans forward.
01:22:08.110 --> 01:22:09.280
On page seven
01:22:09.280 --> 01:22:14.170
of my exhibit Abrams opening testimony,
01:22:16.020 --> 01:22:17.590
I have a statement there that says,
01:22:17.590 --> 01:22:18.940
"We must ensure that PG&E--"
01:22:18.940 --> 01:22:19.773
Just a moment.
01:22:21.359 --> 01:22:25.710
This is Abrams six for reference.
01:22:25.710 --> 01:22:27.510
Do you have that document, Mr Vesey?
01:22:28.382 --> 01:22:31.460
This is the Abrams opening testimony?
01:22:31.460 --> 01:22:33.200
And it's dated December 13th.
01:22:33.200 --> 01:22:36.027
Yes, I have it in front of me and I'm on page seven.
01:22:36.027 --> 01:22:39.270
Thank you Mr Vesey and thank you your Honor.
01:22:40.810 --> 01:22:44.700
So on that on line 15, it states,
01:22:44.700 --> 01:22:46.529
"We must ensure that PG&E incorporates
01:22:46.529 --> 01:22:51.245
"independently regulated safety incentives on their board
01:22:51.245 --> 01:22:53.900
"and are connected to executive compensation
01:22:53.900 --> 01:22:56.203
"and overall corporate incentive structure.
01:22:56.203 --> 01:22:58.980
"The Commission needs to ensure that these are well defined,
01:22:58.980 --> 01:23:00.660
"measurable and clearly articulated
01:23:00.660 --> 01:23:02.500
"in the plan of reorganization
01:23:02.500 --> 01:23:04.510
"if it is to be deemed reasonable,
01:23:04.510 --> 01:23:06.670
"confirmable and reliable."
01:23:06.670 --> 01:23:07.740
Given the book you wrote
01:23:07.740 --> 01:23:10.927
and connecting profits to performance.
01:23:10.927 --> 01:23:12.850
do you not agree with that statement?
01:23:14.380 --> 01:23:17.610
Well I agree with the statement
01:23:17.610 --> 01:23:22.610
that we should have safety incentives
01:23:23.330 --> 01:23:25.670
that they be reported to the Commission.
01:23:25.670 --> 01:23:28.880
I think to be compliant with 1054 in in terms of
01:23:28.880 --> 01:23:31.370
incentive compensation which connects the dots
01:23:31.370 --> 01:23:32.280
that you're talking to
01:23:32.280 --> 01:23:35.780
and we have a sponsor for testimony, John Lowe,
01:23:35.780 --> 01:23:38.296
who will talk to those specific issues.
01:23:38.296 --> 01:23:41.820
My concern is I don't know if it relates to my book
01:23:41.820 --> 01:23:43.710
or other things but I do believe that
01:23:43.710 --> 01:23:45.430
measures are important,
01:23:45.430 --> 01:23:47.974
that to make measures that deal with critical issues
01:23:47.974 --> 01:23:49.976
should be transparent.
01:23:49.976 --> 01:23:53.010
They should have all the necessary oversight
01:23:53.010 --> 01:23:55.510
so in that element I do not have any disagreement.
01:23:57.620 --> 01:24:00.160
On page 14 of the same document,
01:24:04.775 --> 01:24:06.260
I want to point you to the headline
01:24:06.260 --> 01:24:09.754
which was the press release that was issued
01:24:09.754 --> 01:24:14.754
when PG&E filed their amended plan of reorganization.
01:24:15.059 --> 01:24:18.650
It states, "PG&E files amended plan of reorganization,
01:24:18.650 --> 01:24:21.195
"remains on track to achieve confirmation by plan
01:24:21.195 --> 01:24:23.800
"before the June 30th deadline."
01:24:27.975 --> 01:24:31.250
Over the past few days we've had characterizations of
01:24:31.250 --> 01:24:33.930
what PG&E considers fairness.
01:24:35.820 --> 01:24:38.430
We've also had characterizations of what PG&E
01:24:38.430 --> 01:24:42.530
sees as the top priority being safe and reliable service.
01:24:42.530 --> 01:24:47.317
Why is the headline for this new plan for reorganization
01:24:47.317 --> 01:24:50.318
not PG&E provides a safe path forward
01:24:50.318 --> 01:24:52.850
that provides fairness to victims?
01:24:56.055 --> 01:24:59.540
I don't really have a thoughtful answer to that,
01:24:59.540 --> 01:25:03.118
how the construction of this headline was done.
01:25:03.118 --> 01:25:06.450
Maybe you can rephrase the question?
01:25:06.450 --> 01:25:07.900
I can't answer that question.
01:25:10.910 --> 01:25:13.540
Does it not bother you as the chief executive officer
01:25:13.540 --> 01:25:16.661
that how you're communicating a plan of reorganization
01:25:16.661 --> 01:25:20.610
mainly focuses on your date of June 30th
01:25:20.610 --> 01:25:23.981
as the primary motivation behind the plan of reorganization
01:25:23.981 --> 01:25:27.410
as opposed to the things that the public cares about,
01:25:27.410 --> 01:25:31.450
namely safety, reliability and fairness to victims?
01:25:31.450 --> 01:25:33.430
Objection, the media strategy associated
01:25:33.430 --> 01:25:35.490
with the plan of reorganization and the Bankruptcy Court
01:25:35.490 --> 01:25:37.110
really isn't relevant to the issues
01:25:37.110 --> 01:25:40.950
we're addressing here under 1054.
01:25:43.542 --> 01:25:45.450
I agree, sustained.
01:25:46.710 --> 01:25:47.543
Next question.
01:25:51.650 --> 01:25:54.568
Is how you communicate the plan of reorganization
01:25:54.568 --> 01:25:57.680
not important to your organization?
01:25:57.680 --> 01:25:59.260
Same objection.
01:25:59.260 --> 01:26:01.310
Overruled, you can answer the question.
01:26:02.920 --> 01:26:05.740
I think that how you communicate various
01:26:07.680 --> 01:26:09.610
strategies to the public
01:26:12.130 --> 01:26:14.630
needs to be a thoughtful and comprehensive view.
01:26:14.630 --> 01:26:15.850
There are different messages
01:26:15.850 --> 01:26:18.290
that you send to different groups.
01:26:18.290 --> 01:26:19.630
There are different mechanisms
01:26:19.630 --> 01:26:22.890
to communicating those things.
01:26:22.890 --> 01:26:25.712
I'm not involved with the the strategy.
01:26:25.712 --> 01:26:28.910
I think that our mission remains the same
01:26:28.910 --> 01:26:31.595
and our mission has not changed regardless,
01:26:31.595 --> 01:26:36.400
which is the provision of safe, affordable clean energy
01:26:36.400 --> 01:26:39.252
to our customers and that remains the same.
01:26:39.252 --> 01:26:44.252
So our strategy for communicating what at what times
01:26:44.460 --> 01:26:46.920
to what parties is part of a more comprehensive view
01:26:46.920 --> 01:26:48.950
because as you are aware
01:26:48.950 --> 01:26:50.955
there are many different constituencies in this.
01:26:50.955 --> 01:26:53.811
There's financial markets, there are customers,
01:26:53.811 --> 01:26:56.052
you name it, there's always somebody who has something
01:26:56.052 --> 01:26:58.120
that you want to communicate to
01:26:58.120 --> 01:27:00.520
and frame it in the way that is most responsive to that
01:27:00.520 --> 01:27:03.320
so I don't have a deep insight to that
01:27:03.320 --> 01:27:05.840
but I will acknowledge that the communication
01:27:05.840 --> 01:27:07.830
and communicating effectively is key
01:27:07.830 --> 01:27:11.640
to any organizational planner or change.
01:27:13.000 --> 01:27:14.969
So communications are very important
01:27:14.969 --> 01:27:19.398
and public perceptions of the plan of reorganization
01:27:19.398 --> 01:27:24.398
are very important to the success of the plan,
01:27:24.890 --> 01:27:26.340
is that is correct statement?
01:27:27.250 --> 01:27:29.067
At a general level, yes.
01:27:29.067 --> 01:27:32.960
Great, that's why I'm focused on this document.
01:27:34.630 --> 01:27:38.029
If you look at page 16 of that same document
01:27:38.029 --> 01:27:43.029
it states that a top priority in terms of the heading
01:27:43.240 --> 01:27:46.247
being PG&E's plan, the best pass forward
01:27:46.247 --> 01:27:51.247
talks to make sure all parties are treated fairly.
01:27:51.470 --> 01:27:52.720
How do you define fairly?
01:27:55.010 --> 01:27:55.990
How do I define?
01:27:55.990 --> 01:27:57.230
Objection your Honor.
01:28:00.110 --> 01:28:02.670
There was a lengthy discussion wit Mr Johnson
01:28:02.670 --> 01:28:06.040
about this yesterday where Mr. Abrams
01:28:06.040 --> 01:28:08.990
tried to get Mr Johnson to address the legal standard
01:28:08.990 --> 01:28:11.839
in the bankruptcy court associated with what fairly means.
01:28:11.839 --> 01:28:13.490
I didn't ask the non legals.
01:28:13.490 --> 01:28:15.620
I don't think we need to explore that ground again.
01:28:15.620 --> 01:28:18.710
it's not relevant to the 1054 standards
01:28:18.710 --> 01:28:20.520
the Commission needs to evaluate.
01:28:20.520 --> 01:28:23.720
We've already spent probably 20 minutes on this issue
01:28:23.720 --> 01:28:25.800
with Mr Johnson and it's not within
01:28:25.800 --> 01:28:27.960
the scope of Mr Vesey's testimony.
01:28:27.960 --> 01:28:29.358
Thank you.
01:28:29.358 --> 01:28:31.620
I'm gonna ask Mr Vesey a couple of questions.
01:28:31.620 --> 01:28:34.890
Mr Vesey, did you prepare the press release
01:28:34.890 --> 01:28:39.770
that is copied in on page 16 of exhibit Abrams six?
01:28:39.770 --> 01:28:40.920
No.
01:28:40.920 --> 01:28:44.416
And do you have any means of determining
01:28:44.416 --> 01:28:48.830
what was intended by the preparers of that document
01:28:48.830 --> 01:28:52.100
for purposes of the term treated fairly?
01:28:52.100 --> 01:28:53.500
No.
01:28:53.500 --> 01:28:54.890
Are you a lawyer by training?
01:28:54.890 --> 01:28:55.723
No.
01:28:55.723 --> 01:28:57.560
Okay, thank you.
01:28:57.560 --> 01:28:58.700
I don't think you're gonna get anywhere
01:28:58.700 --> 01:29:02.280
with this line of questioning Mr Abrams on it,
01:29:02.280 --> 01:29:04.520
but I'll allow you one more question to ask him
01:29:04.520 --> 01:29:07.280
related to his understanding of fairly.
01:29:10.920 --> 01:29:12.950
From a non legal perspective,
01:29:16.090 --> 01:29:20.830
the public wants to understand whether PG&E
01:29:20.830 --> 01:29:23.610
treats its customers and victims fairly?
01:29:23.610 --> 01:29:26.130
How do you as a corporate executive
01:29:26.130 --> 01:29:29.460
in a non-legal way describe fairly?
01:29:32.560 --> 01:29:34.690
As an individual I'll answer the question
01:29:34.690 --> 01:29:35.523
because I don't think
01:29:35.523 --> 01:29:37.440
being a corporate executive changed that.
01:29:39.180 --> 01:29:41.140
In my non legal term the way
01:29:41.140 --> 01:29:44.231
I believe I would think about this is
01:29:44.231 --> 01:29:47.360
a fair outcome is any outcome
01:29:47.360 --> 01:29:48.860
that two parties can agree to.
01:29:50.010 --> 01:29:52.400
So you know, what's fair is
01:29:53.250 --> 01:29:55.640
it is in the eye of the beholder
01:29:55.640 --> 01:29:58.155
but if two parties come to an agreement
01:29:58.155 --> 01:30:02.200
that would basically it's a fair outcome
01:30:02.200 --> 01:30:04.670
because they've agreed to it.
01:30:04.670 --> 01:30:06.610
In terms of valuations and other issues
01:30:06.610 --> 01:30:09.840
it's normally the standard if people agree to it
01:30:09.840 --> 01:30:12.310
that's the outcome and that has to be by definition,
01:30:12.310 --> 01:30:13.150
a fair outcome.
01:30:13.150 --> 01:30:15.590
So that's how I would think about it.
01:30:15.590 --> 01:30:17.220
It's not an imposed outcome,
01:30:17.220 --> 01:30:20.676
it's one that's through agreement of parties at interest
01:30:20.676 --> 01:30:23.710
and if they come together and agree then the outcome
01:30:23.710 --> 01:30:24.760
I would view as fair.
01:30:25.816 --> 01:30:28.330
As part of the plan of reorganization
01:30:28.330 --> 01:30:33.330
what has been dismissed is the Tubbs fire investigation
01:30:33.415 --> 01:30:36.610
and the court trial that would come from that.
01:30:36.610 --> 01:30:39.290
On page 17 of my testimony
01:30:39.290 --> 01:30:41.000
I have a statement there from Michael Kelly,
01:30:41.000 --> 01:30:43.731
a member of the TCC, representing--
01:30:43.731 --> 01:30:45.130
Objection, your Honor.
01:30:45.130 --> 01:30:46.060
The question of--
01:30:46.060 --> 01:30:48.119
I haven't finished my question.
01:30:48.119 --> 01:30:49.260
Please stop.
01:30:50.920 --> 01:30:52.200
Let him ask his question
01:30:52.200 --> 01:30:53.250
and then you can frame objection.
01:30:53.250 --> 01:30:54.230
This question involves reading
01:30:54.230 --> 01:30:56.280
copious amounts of testimonies.
01:30:56.280 --> 01:31:00.040
Mr Mannheim, don't talk over me please.
01:31:01.610 --> 01:31:02.710
Mr Abrams,
01:31:03.708 --> 01:31:06.790
please ask your question
01:31:06.790 --> 01:31:09.720
directing him to the point in testimony
01:31:09.720 --> 01:31:13.100
and then we'll hear if there is an objection on that basis.
01:31:13.100 --> 01:31:14.250
Thank you your Honor.
01:31:16.780 --> 01:31:20.800
The plan of reorganization required
01:31:20.800 --> 01:31:24.370
that the Tubbs fire court trial be set aside.
01:31:25.370 --> 01:31:29.870
Michael Kelly stated, "We believe that from a justice
01:31:29.870 --> 01:31:32.300
"and transparency point of view
01:31:32.300 --> 01:31:35.340
"the people who suffer these losses are entitled
01:31:35.340 --> 01:31:37.070
"to have this trial be public."
01:31:38.458 --> 01:31:41.590
Does that not seem fair to you?
01:31:42.530 --> 01:31:45.060
Objection, your Honor the question of
01:31:47.700 --> 01:31:52.380
whether the Tubbs preference trial was settled
01:31:52.380 --> 01:31:53.560
or should not have been settled
01:31:53.560 --> 01:31:55.400
is a question for the Bankruptcy Court.
01:31:55.400 --> 01:31:58.140
It's not relevant to the issues the Commission
01:31:58.140 --> 01:31:59.840
is considering in this proceeding.
01:32:06.190 --> 01:32:09.140
The Bankruptcy Court follows its own rules
01:32:09.140 --> 01:32:14.140
and we don't overrule those rules here.
01:32:14.240 --> 01:32:16.625
Can you frame it in the context of
01:32:16.625 --> 01:32:20.800
the Commission's review of the plan of bankruptcy?
01:32:23.950 --> 01:32:24.783
Yes.
01:32:25.960 --> 01:32:28.620
Victims are ratepayers.
01:32:30.210 --> 01:32:34.960
Victims are underrepresented in this hearing room right now.
01:32:38.200 --> 01:32:41.920
What I'm trying to ask is for victims
01:32:41.920 --> 01:32:45.670
and your consideration of them in terms of fairness
01:32:45.670 --> 01:32:50.670
do you think setting aside their court date is fair?
01:32:51.770 --> 01:32:52.603
Objection.
01:32:52.603 --> 01:32:55.680
It's the same objection as before.
01:32:55.680 --> 01:32:58.710
Okay at this time I will sustain that objection.
01:32:58.710 --> 01:32:59.810
Next question, please.
01:33:07.790 --> 01:33:09.680
The Commission under its purview
01:33:11.640 --> 01:33:15.490
has the ability and the obligation to investigate
01:33:16.952 --> 01:33:19.560
fires caused by PG&E.
01:33:21.980 --> 01:33:26.657
Do you feel as the chief executive officer of PG&E
01:33:29.631 --> 01:33:32.900
that the Commission should investigate
01:33:32.900 --> 01:33:36.460
the Tubbs fire to provide fairness to victims
01:33:36.460 --> 01:33:38.130
who are also your customers?
01:33:44.690 --> 01:33:47.910
You know to answer that question thoughtfully
01:33:47.910 --> 01:33:51.404
requires me to have much more understanding of
01:33:51.404 --> 01:33:55.790
process procedure, the details around all those things,
01:33:55.790 --> 01:33:58.620
which I believe have been put aside.
01:33:59.480 --> 01:34:01.740
I think that the Commission,
01:34:01.740 --> 01:34:03.560
the premise of the Commission has the ability
01:34:03.560 --> 01:34:06.670
and the right to do that is really
01:34:06.670 --> 01:34:08.981
a decision for them to take.
01:34:08.981 --> 01:34:13.283
I don't have enough information or insight into this
01:34:13.283 --> 01:34:15.850
to be able to give you a thoughtful answer on that.
01:34:17.846 --> 01:34:22.240
Part of what was discussed earlier in this hearing
01:34:22.240 --> 01:34:24.440
was corporate responsibility
01:34:24.440 --> 01:34:27.490
and that is central to this plan of reorganization.
01:34:29.270 --> 01:34:32.030
What corporate responsibility do you have
01:34:32.030 --> 01:34:35.043
before you are legally obligated to do something
01:34:35.043 --> 01:34:38.980
to come forward in fairness?
01:34:40.460 --> 01:34:42.690
Objection, that's a vague question.
01:34:42.690 --> 01:34:45.344
I don't understand context of it.
01:34:45.344 --> 01:34:47.500
I didn't understand the question as well
01:34:47.500 --> 01:34:49.400
Mr Abrams, can you rephrase it please?
01:34:53.040 --> 01:34:54.740
Corporate responsibility
01:34:54.740 --> 01:34:57.910
and being a good corporate citizen
01:34:57.910 --> 01:35:01.060
is central to a plan of reorganization,
01:35:01.060 --> 01:35:03.930
particularly given the history of
01:35:03.930 --> 01:35:06.000
Pacific Gas and Electric.
01:35:08.744 --> 01:35:13.330
Is waiting for the law to tell you
01:35:13.330 --> 01:35:16.200
to do something that is right,
01:35:16.200 --> 01:35:21.200
the way to rebuild trust and to be a good corporate citizen?
01:35:22.930 --> 01:35:25.390
This question was asked and answered multiple times
01:35:25.390 --> 01:35:26.660
with Mr Johnson yesterday.
01:35:26.660 --> 01:35:29.800
Can we maybe ask if Mr Vesey's opinion
01:35:29.800 --> 01:35:31.220
is any different than Mr Johnson's
01:35:31.220 --> 01:35:33.360
as a way to truncate this examination?
01:35:33.360 --> 01:35:36.030
Mr Vesey, can indicate that if he so chooses.
01:35:36.030 --> 01:35:37.984
Please answer the question.
01:35:37.984 --> 01:35:40.102
So the question of corporate responsibility,
01:35:40.102 --> 01:35:42.310
which I take quite serious,
01:35:42.310 --> 01:35:45.230
my number one responsibility is to make sure
01:35:45.230 --> 01:35:47.800
that we don't create more victims.
01:35:47.800 --> 01:35:50.050
It's been my sole focus since I've come here.
01:35:50.900 --> 01:35:53.000
It is what I am absolutely committed to
01:35:53.000 --> 01:35:57.726
and I believe as you asked and I answered before
01:35:57.726 --> 01:36:00.900
that how do you rebuild trust with your customers,
01:36:00.900 --> 01:36:05.210
it's by doing the right thing all the time going forward
01:36:05.210 --> 01:36:06.750
and doing what we say we're going to do.
01:36:06.750 --> 01:36:08.700
I can't undo events of the past.
01:36:08.700 --> 01:36:11.490
I do not have enough detail to talk about
01:36:11.490 --> 01:36:15.220
what was passed, it's a relatively complicated history there
01:36:15.220 --> 01:36:18.817
but my sense of corporate responsibility is going forward
01:36:18.817 --> 01:36:22.490
is not to create more victims,
01:36:22.490 --> 01:36:24.580
to make sure we're serving our customers well
01:36:24.580 --> 01:36:25.790
and we're meeting our obligations.
01:36:25.790 --> 01:36:28.220
That's my interpretation of corporate responsibility
01:36:28.220 --> 01:36:30.320
and what I am individually committed to.
01:36:30.320 --> 01:36:32.900
I appreciate that, that wasn't my question.
01:36:32.900 --> 01:36:36.521
My question is when a fire has occurred
01:36:36.521 --> 01:36:39.810
like the Kinkade fire, at what point
01:36:39.810 --> 01:36:42.670
do you take corporate responsibility for that?
01:36:42.670 --> 01:36:44.920
Is it waiting until the law tells you
01:36:44.920 --> 01:36:48.220
you have to or is there some point before then
01:36:48.220 --> 01:36:50.650
that you might take responsibility for something
01:36:50.650 --> 01:36:53.050
or is it only the law that makes you move forward?
01:36:53.050 --> 01:36:57.164
When the issue is clear
01:36:57.164 --> 01:37:01.140
and we recognize that clear responsibility
01:37:01.140 --> 01:37:02.670
we will always act.
01:37:02.670 --> 01:37:04.762
You raise this issue of the Kinkade fire,
01:37:04.762 --> 01:37:08.901
during Mr Johnson's cross,
01:37:08.901 --> 01:37:12.605
the fact of the matter is the event occurred,
01:37:12.605 --> 01:37:14.420
it's under investigation,
01:37:14.420 --> 01:37:18.580
we are not allowed to see that evidence at this moment
01:37:18.580 --> 01:37:20.830
and we are waiting for those outcomes.
01:37:20.830 --> 01:37:24.280
The causality of that event is not clear
01:37:24.280 --> 01:37:27.110
and we don't have enough facts in our hands
01:37:27.110 --> 01:37:30.940
to know what the cause and initiation of that fire is.
01:37:30.940 --> 01:37:33.470
In cases where things are clear,
01:37:33.470 --> 01:37:36.330
where we have an impact, where we know our actions
01:37:36.330 --> 01:37:39.160
directly resulted in an impact on a customer,
01:37:39.160 --> 01:37:41.170
of course we're not waiting for anybody to tell us
01:37:41.170 --> 01:37:43.860
what to do, we will act in an affirmative way.
01:37:43.860 --> 01:37:45.750
But the world isn't always that clear
01:37:45.750 --> 01:37:47.986
and quite honestly the Kinkade fire
01:37:47.986 --> 01:37:50.977
is not a an example of clarity in terms of causality
01:37:50.977 --> 01:37:53.830
and our responsibilities at this point in time.
01:37:53.830 --> 01:37:58.280
Would you say that clarity is 5% or 80%?
01:37:58.280 --> 01:38:00.020
Could you give me a sense of how clear
01:38:00.020 --> 01:38:00.920
you are on the Kinkade fore?
01:38:00.920 --> 01:38:02.510
We don't have all the facts.
01:38:03.404 --> 01:38:06.210
What we know is not enough to come to determination.
01:38:06.210 --> 01:38:08.940
I think we have reported this in our 10K
01:38:08.940 --> 01:38:11.150
as a potential risk as,
01:38:11.150 --> 01:38:13.388
I don't know what the engineering
01:38:13.388 --> 01:38:14.740
and what the economic or the gap terms are
01:38:14.740 --> 01:38:16.460
and the assessment of probability,
01:38:16.460 --> 01:38:19.003
but at this point there is not enough evidence
01:38:19.003 --> 01:38:21.289
from enough places and we don't have it
01:38:21.289 --> 01:38:23.410
to come to that determination,
01:38:23.410 --> 01:38:26.560
so I am not in a position to give you a probability.
01:38:26.560 --> 01:38:27.470
Thank you.
01:38:27.470 --> 01:38:29.801
On page 18 of that same document
01:38:29.801 --> 01:38:32.687
you talk about your plan of reorganization
01:38:32.687 --> 01:38:36.123
and you talk about completing
01:38:36.123 --> 01:38:38.600
enhanced and accelerate inspection.
01:38:39.550 --> 01:38:41.040
As a component of this.
01:38:41.040 --> 01:38:42.785
Objection to the question.
01:38:42.785 --> 01:38:46.206
Mr Vesey's not talking about anything in this testimony.
01:38:46.206 --> 01:38:50.043
For clarity we're in Abrams-6
01:38:50.043 --> 01:38:51.900
is what you're referring him to?
01:38:51.900 --> 01:38:54.680
Yes, the same document page 18.
01:38:54.680 --> 01:38:56.760
The portion that you're citing to
01:38:56.760 --> 01:38:59.220
is the portion that you've extracted
01:38:59.220 --> 01:39:01.330
from the PG&E press release, is that correct?
01:39:01.330 --> 01:39:03.910
Yes, this is the PG&E press release
01:39:03.910 --> 01:39:07.149
and as the chief executive officer I'm assuming that
01:39:07.149 --> 01:39:09.420
these things are under his purview
01:39:09.420 --> 01:39:10.970
as is everything else in PG&E.
01:39:10.970 --> 01:39:13.803
Do you have the question in mind Mr Vesey?
01:39:13.803 --> 01:39:17.350
If you could ask it again I'll do my best to answer.
01:39:17.350 --> 01:39:18.300
Thank you.
01:39:19.160 --> 01:39:21.610
It states here that completing the enhanced
01:39:21.610 --> 01:39:24.540
and accelerated inspections is part of
01:39:25.406 --> 01:39:27.130
the plan of reorganization.
01:39:27.130 --> 01:39:32.130
Is this the same enhanced and accelerated inspections
01:39:36.560 --> 01:39:41.560
that PG&E did not complete with this in the prior year.
01:39:44.140 --> 01:39:46.880
Well I mean I'm looking at an excerpt here it says,
01:39:46.880 --> 01:39:50.100
"PG&E has taken and continues to take critical actions,
01:39:50.100 --> 01:39:52.120
"completing enhanced or an accelerating inspection
01:39:52.120 --> 01:39:54.440
"of more than 700,000 transmission distribution
01:39:54.440 --> 01:39:57.770
"and substation assets of it elected--
01:39:57.770 --> 01:39:59.388
Slow down a little bit.
01:39:59.388 --> 01:40:02.060
Okay, I'm just reading the first bullet there
01:40:02.060 --> 01:40:03.060
from my own benefit.
01:40:05.020 --> 01:40:07.721
We have ongoing inspection program.
01:40:07.721 --> 01:40:10.410
There are programs in each year to complete
01:40:10.410 --> 01:40:13.210
a certain amount of work which we do
01:40:13.210 --> 01:40:14.550
and we continue to do.
01:40:15.480 --> 01:40:17.170
To give you the current status of that
01:40:17.170 --> 01:40:20.340
and what is programmed in this year and the out year
01:40:20.340 --> 01:40:24.740
I would suggest we have a other sponsored testimony
01:40:24.740 --> 01:40:27.040
specifically on this by Debbie Powell.
01:40:27.040 --> 01:40:30.780
She would be in a much better position to answer
01:40:30.780 --> 01:40:33.800
specifics around these inspection programs.
01:40:33.800 --> 01:40:34.760
Thank you.
01:40:35.780 --> 01:40:37.890
In the next bullet point it talks to
01:40:37.890 --> 01:40:40.520
enhanced vegetation management.
01:40:40.520 --> 01:40:44.814
Are these the same enhanced vegetation management goals
01:40:44.814 --> 01:40:48.103
which were approximately at 30% completion
01:40:48.103 --> 01:40:50.700
at the start of the Kinkade fire?
01:40:51.604 --> 01:40:55.548
The enhanced vegetation management program
01:40:55.548 --> 01:40:58.130
is an ongoing multi-year program
01:40:58.130 --> 01:40:59.450
so it is the same program.
01:41:00.570 --> 01:41:04.980
Targeted in the last program year in 2019
01:41:04.980 --> 01:41:08.840
we had anticipated or programed to do 2500 miles.
01:41:08.840 --> 01:41:11.602
We completed more than 2500 miles
01:41:11.602 --> 01:41:15.115
so that work on schedule was completed
01:41:15.115 --> 01:41:17.360
and it will continue.
01:41:17.360 --> 01:41:20.925
There might be some shifts in what we're focused on,
01:41:20.925 --> 01:41:25.170
having a greater focus on clearing
01:41:25.170 --> 01:41:27.943
our transmission right away
01:41:27.943 --> 01:41:30.153
and our lower transmission voltage levels
01:41:30.153 --> 01:41:34.412
as that limits the scope of PSPSs
01:41:34.412 --> 01:41:38.297
as well as shifting from pure management of trees
01:41:40.820 --> 01:41:43.674
and trees that can fall into our assets
01:41:43.674 --> 01:41:45.970
to also now focusing not only on
01:41:45.970 --> 01:41:47.878
preventing ignitions of fires
01:41:47.878 --> 01:41:49.970
but also preventing the spread,
01:41:49.970 --> 01:41:51.370
which means we're also focused
01:41:51.370 --> 01:41:54.070
in the undergrowth of the grasses
01:41:54.070 --> 01:41:55.930
as part of the clearing program coming forward.
01:41:55.930 --> 01:41:58.400
So while there is still enhanced vegetation program,
01:41:58.400 --> 01:41:59.910
it's still a multi-year program,
01:41:59.910 --> 01:42:01.730
the emphasis of that program might be different
01:42:01.730 --> 01:42:03.400
in this coming year.
01:42:03.400 --> 01:42:05.838
Let me just give you a time check Mr Abrams,
01:42:05.838 --> 01:42:07.388
you have about 10 more minutes.
01:42:08.570 --> 01:42:12.430
Your Honor, I'm getting very verbose responses,
01:42:12.430 --> 01:42:15.170
which I appreciate and I wish we had the time to do it
01:42:15.170 --> 01:42:19.807
but that is part of what's contributing to the time issues.
01:42:23.440 --> 01:42:25.430
So given that you're describing in terms of
01:42:25.430 --> 01:42:27.925
how you're announcing your plan of reorganization
01:42:27.925 --> 01:42:30.280
the very same practices that came before
01:42:30.280 --> 01:42:32.140
the plan of reorganization
01:42:32.140 --> 01:42:34.550
are you concerned that this plan of reorganization
01:42:34.550 --> 01:42:36.463
is not reorganization at all
01:42:36.463 --> 01:42:39.564
but just rehashing the same tactics?
01:42:39.564 --> 01:42:41.780
No, I'm not concerned.
01:42:44.270 --> 01:42:45.103
Thank you.
01:42:46.340 --> 01:42:49.140
If you can please turn to page 20 of that same document.
01:42:55.440 --> 01:42:58.430
There's a number of bullets expressed there of headlines
01:42:59.935 --> 01:43:02.340
that came out after your plan of
01:43:02.340 --> 01:43:04.020
reorganization was announced
01:43:06.070 --> 01:43:11.070
about many transgressions, criminal activities,
01:43:13.630 --> 01:43:17.170
and other things associated with how you're doing business.
01:43:17.170 --> 01:43:22.030
The last point points to a headline
01:43:22.030 --> 01:43:25.789
that PG&E stock has gone up
01:43:25.789 --> 01:43:28.020
because you've reached this deal.
01:43:30.300 --> 01:43:34.030
How is not connecting your actions
01:43:34.030 --> 01:43:37.870
to how you get compensated a plan of reorganization
01:43:37.870 --> 01:43:40.260
that will position us for a better future?
01:43:45.650 --> 01:43:46.770
Just for clarity you're pointing me
01:43:46.770 --> 01:43:51.014
to the last bullet on page 20 line 14?
01:43:51.014 --> 01:43:53.180
I'm pointing you to all the bullets
01:43:53.180 --> 01:43:54.130
and what they mean.
01:43:55.311 --> 01:43:58.060
Let me clarify for the point.
01:43:58.060 --> 01:43:58.893
Sure.
01:44:00.490 --> 01:44:02.920
It appears to me as an outsider,
01:44:02.920 --> 01:44:06.590
as a victim whose concern that there may be more fires
01:44:06.590 --> 01:44:09.100
this upcoming wildfire season,
01:44:09.100 --> 01:44:11.640
that PG&E doesn't have the proper incentives
01:44:11.640 --> 01:44:13.280
to be motivated.
01:44:13.280 --> 01:44:17.313
The bottom line, financial incentives to be motivated
01:44:17.313 --> 01:44:19.313
and given these headlines
01:44:19.313 --> 01:44:22.715
and given the way that your stock price goes up
01:44:22.715 --> 01:44:26.198
regardless of what activities exposed,
01:44:26.198 --> 01:44:30.174
don't you feel given that someone who wrote
01:44:30.174 --> 01:44:34.830
that profits connected to performance are highly important,
01:44:35.770 --> 01:44:38.080
that this is not represented in your plan?
01:44:39.620 --> 01:44:41.980
A couple things.
01:44:41.980 --> 01:44:44.560
One is I can't talk to all the headlines
01:44:44.560 --> 01:44:46.500
and what people do.
01:44:46.500 --> 01:44:49.770
If the question becomes one that there is a you know,
01:44:49.770 --> 01:44:53.750
that PG&E needs to have a pivot in terms
01:44:53.750 --> 01:44:56.048
of the way it performs and exercises
01:44:56.048 --> 01:44:58.650
there's some foundational things that have to be changed
01:44:58.650 --> 01:45:00.170
and that is part of not necessarily
01:45:00.170 --> 01:45:01.360
the financial reorganization
01:45:01.360 --> 01:45:04.330
but this reorganizing and re-imagining of our business,
01:45:04.330 --> 01:45:06.580
which I've already said on the stand
01:45:06.580 --> 01:45:08.570
is something that we're now engaged in.
01:45:09.520 --> 01:45:11.360
As I said I'm sorry this is gonna be a long answer
01:45:11.360 --> 01:45:14.194
but I don't know how to give you a short answer on this,
01:45:14.194 --> 01:45:18.820
in connection with being here for six months,
01:45:18.820 --> 01:45:21.676
focusing on specifically on the wildfire season,
01:45:21.676 --> 01:45:24.800
making sure we have stability and execution of our work,
01:45:24.800 --> 01:45:26.920
I have developed a number of hypotheses
01:45:26.920 --> 01:45:29.650
that will improve our performance going forward.
01:45:29.650 --> 01:45:32.131
This is all part of what we are going to be doing.
01:45:32.131 --> 01:45:34.840
The rise and fall of the stock price
01:45:34.840 --> 01:45:38.310
in relation to getting line of sight to emergence
01:45:38.310 --> 01:45:40.880
is something that the market evaluates and responds to
01:45:40.880 --> 01:45:41.810
and the fact of the matter is
01:45:41.810 --> 01:45:44.550
there's tremendous volatility in those shares
01:45:44.550 --> 01:45:46.760
based on what people read in the press,
01:45:46.760 --> 01:45:48.995
so I don't think that's directly responsive to it.
01:45:48.995 --> 01:45:52.000
My view is that the direct result from,
01:45:52.000 --> 01:45:55.374
if we have another catastrophic wildfire
01:45:55.374 --> 01:45:59.838
or another ethical lapse they will have significant
01:45:59.838 --> 01:46:03.437
and severe impacts on our financial position
01:46:03.437 --> 01:46:06.200
and the viability of a plan of reorganization.
01:46:06.200 --> 01:46:08.460
That's why performance is critical
01:46:08.460 --> 01:46:10.675
and it is currently tied together
01:46:10.675 --> 01:46:13.250
because these are the risks
01:46:13.250 --> 01:46:14.920
that are inherent in the business,
01:46:14.920 --> 01:46:17.150
they are reflected in the way the shares are valued,
01:46:17.150 --> 01:46:20.254
they are reflected in the way managers will be compensated,
01:46:20.254 --> 01:46:23.620
this is not a company that can afford another lapse
01:46:23.620 --> 01:46:28.062
either operational or from a public safety perspective.
01:46:28.062 --> 01:46:31.394
And as I said before that is my main focus,
01:46:31.394 --> 01:46:34.196
it's what I'm here to do to make sure we don't do that
01:46:34.196 --> 01:46:37.193
and that we actually build a business
01:46:37.193 --> 01:46:40.130
that can resolve a number of the lessons learned
01:46:40.130 --> 01:46:42.980
that existed for this corporation over the last 10 years
01:46:42.980 --> 01:46:44.620
that still need to be resolved.
01:46:46.088 --> 01:46:47.610
Thank you Mr Vesey.
01:46:48.740 --> 01:46:51.758
I would like to hear very long responses,
01:46:51.758 --> 01:46:53.778
I would love to have that dialogue
01:46:53.778 --> 01:46:57.197
and as the only victim who's sitting here today
01:46:57.197 --> 01:47:00.693
and the only one who's representing victims here today
01:47:00.693 --> 01:47:03.790
I would just ask that I have some more leeway
01:47:03.790 --> 01:47:05.090
in terms of the time.
01:47:10.550 --> 01:47:12.750
What I'm trying to understand is
01:47:12.750 --> 01:47:14.360
that the plan of reorganization,
01:47:14.360 --> 01:47:16.460
I know every corporation,
01:47:16.460 --> 01:47:18.190
you've worked for corporations.
01:47:18.190 --> 01:47:20.330
The bottom line is the bottom line.
01:47:20.330 --> 01:47:23.490
If that is not connected to your actions
01:47:23.490 --> 01:47:25.851
and what you stated is that
01:47:25.851 --> 01:47:28.920
the next round of fires will be detrimental,
01:47:31.310 --> 01:47:34.780
help the public, help victims understand
01:47:34.780 --> 01:47:38.610
if PG&E is only going to be responsive
01:47:38.610 --> 01:47:42.890
after the fires occur, which really based on your stock
01:47:42.890 --> 01:47:45.450
has not really been all that affected.
01:47:45.450 --> 01:47:47.760
You've had lots of fires
01:47:47.760 --> 01:47:50.530
and your stock price is still held up.
01:47:50.530 --> 01:47:52.330
You're still getting the return.
01:47:52.330 --> 01:47:56.410
If it's not based on the return in terms of your actions
01:47:56.410 --> 01:47:59.030
how can the public, how can the Commission,
01:47:59.030 --> 01:48:01.650
how can we all feel safer in our homes,
01:48:01.650 --> 01:48:02.850
living under your lines?
01:48:04.692 --> 01:48:06.500
Objection, it's argumentive
01:48:06.500 --> 01:48:08.750
and also this line of questioning has been asked
01:48:08.750 --> 01:48:11.200
and answered multiple times by Mr Johnson.
01:48:11.200 --> 01:48:13.231
That's not...
01:48:13.231 --> 01:48:14.720
Mr Vesey you can answer
01:48:14.720 --> 01:48:16.120
to the best of your ability.
01:48:17.450 --> 01:48:20.420
Well I disagree with the fact that
01:48:20.420 --> 01:48:22.536
there isn't a direct correlation between
01:48:22.536 --> 01:48:27.536
the company's performance and its actions.
01:48:28.173 --> 01:48:30.740
I think that's clear and that's why
01:48:30.740 --> 01:48:32.820
we are where we are today.
01:48:32.820 --> 01:48:37.350
I think that it is absolutely my focus
01:48:38.200 --> 01:48:41.700
and it motivates the decisions I take
01:48:41.700 --> 01:48:45.994
in the way I lead the PG&E company
01:48:45.994 --> 01:48:50.660
that we will not have another event
01:48:52.095 --> 01:48:57.095
that causes an impact on the lives of our customers.
01:48:58.570 --> 01:49:01.100
Now that's my objective, that's my goal,
01:49:01.100 --> 01:49:03.816
and the way we're doing that is by focusing on making sure
01:49:03.816 --> 01:49:07.550
that our assets are operating in a way that is safe
01:49:07.550 --> 01:49:10.560
because the two major reasons of exposure to customers,
01:49:10.560 --> 01:49:13.020
both on the gas and electric side.
01:49:13.020 --> 01:49:18.020
On the gas side it is a loss of containment
01:49:18.140 --> 01:49:20.280
either in the distribution level of transmission
01:49:20.280 --> 01:49:23.630
and we have significant programming working on that.
01:49:23.630 --> 01:49:26.050
On the electric side, it is also recognizing that
01:49:26.050 --> 01:49:28.670
we have a situation where we have significant amount
01:49:28.670 --> 01:49:31.720
of conductor in high fire threat districts
01:49:31.720 --> 01:49:34.360
that are not at the moment safe
01:49:34.360 --> 01:49:36.000
and that's why we are going through
01:49:36.000 --> 01:49:38.320
the advanced vegetation management,
01:49:38.320 --> 01:49:39.660
we are going through hardening,
01:49:39.660 --> 01:49:42.550
we're exploring micro grids to make sure
01:49:42.550 --> 01:49:44.930
that we aren't going to be causing those issues.
01:49:44.930 --> 01:49:47.070
That's the motivation here.
01:49:47.070 --> 01:49:49.000
The sense that is not connected to
01:49:49.000 --> 01:49:50.560
the financial performance of the company.
01:49:50.560 --> 01:49:51.790
I can't accept that premise
01:49:51.790 --> 01:49:53.971
because I believe that those are the major risks
01:49:53.971 --> 01:49:57.310
and that there are discounts for that risk
01:49:57.310 --> 01:50:00.020
and so the fact that we have recurring prompts going forward
01:50:00.020 --> 01:50:04.100
they will materialize in the value of this company
01:50:04.100 --> 01:50:06.150
so I think they are directly connected
01:50:06.150 --> 01:50:09.300
and I will tell you that it is my view
01:50:09.300 --> 01:50:10.920
that the executive management
01:50:10.920 --> 01:50:13.650
as well as a broad portion of this company's
01:50:13.650 --> 01:50:17.620
absolutely focused on not repeating the events
01:50:17.620 --> 01:50:18.453
that we've had.
01:50:18.453 --> 01:50:21.630
I don't know what more I can say here.
01:50:21.630 --> 01:50:24.470
Do you understand how victims
01:50:24.470 --> 01:50:27.590
and the public have heard that from various executives
01:50:27.590 --> 01:50:29.870
for a very long period of time
01:50:29.870 --> 01:50:32.420
and all of those statements might ring hollow
01:50:32.420 --> 01:50:35.364
and as a way in the plan of reorganization
01:50:35.364 --> 01:50:40.364
to remedy that is to tie ongoing financial mechanisms
01:50:41.062 --> 01:50:44.981
to your investors so that when you
01:50:44.981 --> 01:50:47.623
do not perform on a particular function
01:50:47.623 --> 01:50:49.650
they get less return.
01:50:49.650 --> 01:50:51.804
When you do achieve a particular function
01:50:51.804 --> 01:50:53.450
they get more return
01:50:53.450 --> 01:50:57.340
so that your investors incentives are aligned
01:50:57.340 --> 01:50:59.480
to the victims and the public.
01:50:59.480 --> 01:51:00.790
Objection, your Honor.
01:51:00.790 --> 01:51:02.250
It's been asked and answered--
01:51:02.250 --> 01:51:03.654
It has not been answered.
01:51:03.654 --> 01:51:06.020
Mr Vesey,
01:51:06.020 --> 01:51:08.220
you can answer to the best of your ability
01:51:08.220 --> 01:51:10.820
and if you cannot answer the question just say so.
01:51:14.570 --> 01:51:17.160
Okay, I want to be responsive with an answer.
01:51:17.160 --> 01:51:20.370
I believe that the way to and we discussed this before,
01:51:20.370 --> 01:51:23.980
to close the credibility gap is by doing what we say
01:51:23.980 --> 01:51:26.300
and it can only be on our performance.
01:51:26.300 --> 01:51:28.370
There is no plan, there is no structure,
01:51:28.370 --> 01:51:31.120
there is no connection that can guarantee an outcome
01:51:31.120 --> 01:51:35.250
other than the fact that the commitment of what we do
01:51:35.250 --> 01:51:38.321
is thoughtful, is addressed to the issues,
01:51:38.321 --> 01:51:42.280
the work is executed and the risks are eliminated.
01:51:42.280 --> 01:51:44.259
That's my answer to the question.
01:51:44.259 --> 01:51:48.560
I do not believe that purely having financial connections
01:51:48.560 --> 01:51:51.358
will necessarily change those outcomes.
01:51:51.358 --> 01:51:53.930
I also believe as I stated before
01:51:53.930 --> 01:51:55.776
that it is directly related.
01:51:55.776 --> 01:51:58.590
These are the risks that are evaluated
01:51:58.590 --> 01:52:01.070
when investors look at this business.
01:52:01.070 --> 01:52:02.370
They evaluate performance
01:52:02.370 --> 01:52:03.810
because we're also making commitments
01:52:03.810 --> 01:52:05.820
to the financial community as we raise funds
01:52:05.820 --> 01:52:08.320
on our performance and I will tell you
01:52:08.320 --> 01:52:10.412
that I actually believe that connection does exist
01:52:10.412 --> 01:52:13.500
and that's why we have to be extremely serious
01:52:13.500 --> 01:52:15.910
and we have to perform at an extremely high level
01:52:15.910 --> 01:52:18.290
to make sure that we don't see the consequences
01:52:18.290 --> 01:52:22.380
financially of less aggressive performance.
01:52:22.380 --> 01:52:25.399
Are you aware in the Governor's Strike Force report
01:52:25.399 --> 01:52:30.010
that he specifically asked that independently
01:52:30.010 --> 01:52:32.494
and scientifically verified metrics
01:52:32.494 --> 01:52:37.494
be tied to the investments associated with PG&E?
01:52:38.437 --> 01:52:40.922
I'm not aware of that document.
01:52:40.922 --> 01:52:43.480
Moving on.
01:52:43.480 --> 01:52:44.313
On exhibit,
01:52:46.390 --> 01:52:47.700
that's I don't know the number
01:52:47.700 --> 01:52:52.140
but objection of Governor Newsom is the title.
01:52:52.140 --> 01:52:54.720
This is a Abrams-X8.
01:52:59.422 --> 01:53:02.423
Thank you on page three of that document
01:53:05.460 --> 01:53:08.450
it states starting on line 10,
01:53:08.450 --> 01:53:11.421
"It seems clear that rather than amend the debtors plan
01:53:11.421 --> 01:53:14.200
"to incorporate the necessary changes,
01:53:14.200 --> 01:53:17.980
"the debtors instead intend to try to leverage
01:53:17.980 --> 01:53:20.924
"the chapter 11 process to force
01:53:20.924 --> 01:53:24.340
"the California Public Utilities Commission
01:53:24.340 --> 01:53:27.890
"to approve and the state of California
01:53:27.890 --> 01:53:31.369
"to accept a sub optimal plan."
01:53:31.369 --> 01:53:34.320
Is that the goal of Pacific Gas and Electric?
01:53:34.320 --> 01:53:37.550
Objection for multiple reasons.
01:53:37.550 --> 01:53:40.320
There's no foundation, this is not a PG&E pleading,
01:53:40.320 --> 01:53:41.740
it's a pleading of the Governor.
01:53:41.740 --> 01:53:43.220
It pertains to the bankruptcy.
01:53:43.220 --> 01:53:45.020
It was filed in the bankruptcy.
01:53:45.020 --> 01:53:47.110
That is not within the scope of this proceeding.
01:53:47.110 --> 01:53:50.370
Mr Vesey has testified he was not working on the bankruptcy,
01:53:50.370 --> 01:53:52.050
he's focusing on operations.
01:53:52.050 --> 01:53:53.370
It is not relevant.
01:53:53.370 --> 01:53:54.825
Thank you.
01:53:54.825 --> 01:53:57.408
Mr Vesey, are you familiar with this document?
01:53:57.408 --> 01:53:59.940
I have not seen these documents before.
01:53:59.940 --> 01:54:02.680
Okay he did testify earlier
01:54:02.680 --> 01:54:05.680
that he is not involved in the bankruptcy proceeding
01:54:05.680 --> 01:54:08.890
in the federal court and thus is not aware of this document.
01:54:10.360 --> 01:54:11.990
Your Honor--
Next question please.
01:54:11.990 --> 01:54:13.380
The whole purpose of this hearing
01:54:13.380 --> 01:54:14.980
is to focus on the bankruptcy.
01:54:14.980 --> 01:54:18.103
If we can't reference bankruptcy related documents
01:54:18.103 --> 01:54:21.423
and the chief executive officer
01:54:21.423 --> 01:54:26.130
can't address a specific paragraph
01:54:26.130 --> 01:54:29.680
that talks to the California Public Utilities Commission,
01:54:29.680 --> 01:54:30.950
which is where we're seated,
01:54:30.950 --> 01:54:33.400
I don't know what could be more relevant
01:54:33.400 --> 01:54:34.400
than that statement.
01:54:35.640 --> 01:54:38.390
Your objection is registered for the record.
01:54:39.420 --> 01:54:43.886
I think that this document speaks for itself
01:54:43.886 --> 01:54:47.330
and as part of the proceedings at the Bankruptcy Court.
01:54:49.202 --> 01:54:52.469
Do you feel that your plan of reorganization
01:54:52.469 --> 01:54:54.500
is sub-optimal?
01:54:56.310 --> 01:54:57.143
No.
01:54:58.140 --> 01:54:59.870
Are you trying to push this upon
01:54:59.870 --> 01:55:02.210
the California Public Utilities Commission
01:55:02.210 --> 01:55:05.110
to approve very quickly to get to your June 30th deadline?
01:55:06.800 --> 01:55:09.670
I'm not involved in those proceedings
01:55:11.170 --> 01:55:14.100
and in those details and so I don't know
01:55:14.100 --> 01:55:17.790
how to characterize pushing it or speed or the process.
01:55:17.790 --> 01:55:19.572
From a regulatory process,
01:55:19.572 --> 01:55:22.460
they're probably other witnesses
01:55:22.460 --> 01:55:25.512
who are best able to reply thoughtfully to that question.
01:55:25.512 --> 01:55:28.710
I have no more questions.
01:55:28.710 --> 01:55:30.950
Thank you Mr Abrams.
01:55:30.950 --> 01:55:34.570
the next cross examiner is MCE, Miss Kelly.
01:55:38.010 --> 01:55:39.690
Thank you your Honor.
01:55:39.690 --> 01:55:44.690
I just have a brief set of yes or no questions, thank you.
01:55:45.764 --> 01:55:49.161
Is PG&E and compliance with vegetation management
01:55:49.161 --> 01:55:51.860
as it is required under state law?
01:55:53.960 --> 01:55:54.793
Yes.
01:55:57.150 --> 01:55:59.480
Is PG&E in compliance with its enhanced
01:55:59.480 --> 01:56:01.530
vegetation management plan?
01:56:01.530 --> 01:56:02.363
I believe so.
01:56:18.190 --> 01:56:23.190
Does compliance with the vegetation management
01:56:23.800 --> 01:56:28.490
and enhanced vegetation management required by law
01:56:28.490 --> 01:56:33.490
and under PG's plan reduce PSPS?
01:56:37.305 --> 01:56:40.570
That I can't answer yes or no to
01:56:40.570 --> 01:56:43.406
because it was a little bit more complicated.
01:56:43.406 --> 01:56:45.640
May I please your Honor,
01:56:45.640 --> 01:56:47.100
ask for a yes or no response?
01:56:48.464 --> 01:56:49.690
Your Honor, he said he cannot.
01:56:49.690 --> 01:56:51.820
He's given you an answer to that.
01:56:51.820 --> 01:56:53.660
He can't answer yes or no.
01:56:53.660 --> 01:56:56.200
Okay, then I'll take a response.
01:56:56.200 --> 01:57:00.840
So the intent is that within a certain range
01:57:00.840 --> 01:57:03.731
of weather conditions it should limit the scope
01:57:03.731 --> 01:57:08.720
but when you have extremely high gusts of winds
01:57:08.720 --> 01:57:10.993
depending on where they are,
01:57:10.993 --> 01:57:15.740
no amount of vegetation management on your right-of-way
01:57:15.740 --> 01:57:18.660
can necessarily protect those assets.
01:57:18.660 --> 01:57:22.250
So you can have debris flying in from way off
01:57:22.250 --> 01:57:25.900
your right-of-way and so in that instance
01:57:25.900 --> 01:57:28.750
it really depends on the the weather conditions.
01:57:28.750 --> 01:57:32.080
The view of the enhanced vegetation management,
01:57:32.080 --> 01:57:35.150
which takes the vegetation further away
01:57:35.150 --> 01:57:37.550
from the conductors and also opens an aperture
01:57:37.550 --> 01:57:40.560
so things don't fall in is based on
01:57:40.560 --> 01:57:41.900
certain weather conditions
01:57:41.900 --> 01:57:44.525
but when those weather conditions are exceeded
01:57:44.525 --> 01:57:48.633
we would not rely on that process to keep
01:57:48.633 --> 01:57:51.808
from de-energizing certain assets.
01:57:51.808 --> 01:57:54.252
So just to clarify,
01:57:54.252 --> 01:57:59.252
there's a set of below a certain threshold--
01:57:59.731 --> 01:58:01.750
(woman speaking off mic)
01:58:01.750 --> 01:58:02.583
Yes.
01:58:04.600 --> 01:58:08.425
Between normal weather conditions and some,
01:58:08.425 --> 01:58:11.050
let's call it upper limit threshold,
01:58:14.486 --> 01:58:19.486
is it true that there would be a reduction in PSPS?
01:58:20.523 --> 01:58:21.356
Yes.
01:58:32.371 --> 01:58:35.627
So are you aware of the February 19th 2020
01:58:38.190 --> 01:58:41.728
order to show cause hearing held by Judge Alsup
01:58:41.728 --> 01:58:44.850
where he considered applying additional conditions
01:58:44.850 --> 01:58:45.950
of probation to PG&E?
01:58:47.568 --> 01:58:52.166
Specific dates but I'd probably say I'm aware.
01:58:52.166 --> 01:58:53.246
Yeah.
01:58:53.246 --> 01:58:55.900
And he had asked the same question
01:58:55.900 --> 01:59:00.650
on whether vegetation management reduced PSPS.
01:59:01.650 --> 01:59:05.380
Did you receive a report out from that?
01:59:05.380 --> 01:59:06.627
No.
01:59:06.627 --> 01:59:08.320
I'm sorry I couldn't hear your answer.
01:59:08.320 --> 01:59:09.153
No.
01:59:10.120 --> 01:59:15.120
Would it surprise you that in response to,
01:59:18.880 --> 01:59:20.580
allow me to rephrase.
01:59:20.580 --> 01:59:25.580
At that hearing Judge Alsup asked PG&E to assume
01:59:25.763 --> 01:59:28.770
it had been in compliance with its own plan
01:59:28.770 --> 01:59:29.603
and state law.
01:59:31.430 --> 01:59:35.448
Which in in court pleadings which I'm happy to attach,
01:59:35.448 --> 01:59:37.848
PG&E said that they were not in full compliance.
01:59:40.920 --> 01:59:45.200
So Judge Alsup had asked PG&E to assume
01:59:45.200 --> 01:59:47.450
that it had been in compliance with its own plan
01:59:47.450 --> 01:59:51.440
and state law and asked would you have less PSPS.
01:59:54.200 --> 01:59:58.820
PG&E counsel responded to Judge Alsup's question
01:59:58.820 --> 02:00:00.750
with an unequivocal no.
02:00:04.090 --> 02:00:06.720
Does that response surprise you?
02:00:06.720 --> 02:00:09.640
Objection, the response speaks for itself your Honor.
02:00:09.640 --> 02:00:14.640
If she wants to enter that she can enter it.
02:00:15.620 --> 02:00:17.010
She's asking a different question though,
02:00:17.010 --> 02:00:20.370
which is whether or not Mr Vesey would be surprised
02:00:20.370 --> 02:00:22.040
by that answer.
02:00:22.040 --> 02:00:24.100
He can answer that question.
02:00:24.100 --> 02:00:26.350
Well I'll answer it the same way answered it before
02:00:26.350 --> 02:00:30.360
is that within a certain range of weather conditions
02:00:32.270 --> 02:00:33.820
it should limit it.
02:00:33.820 --> 02:00:34.653
All right.
02:00:36.670 --> 02:00:40.630
That's my view so,
02:00:40.630 --> 02:00:42.120
and that's the answer I gave before.
02:00:43.400 --> 02:00:44.900
So if you ask me whether,
02:00:44.900 --> 02:00:46.940
I don't know if you asked the question if I'm surprise,
02:00:46.940 --> 02:00:49.367
I don't know that I'd be surprised or not
02:00:49.367 --> 02:00:50.200
because I don't know the context of conversation
02:00:50.200 --> 02:00:51.170
and everything else.
02:00:52.610 --> 02:00:56.330
I don't know the context in which counsel responded.
02:00:56.330 --> 02:00:57.820
I don't know if the situation is
02:00:57.820 --> 02:01:00.860
but my engineering judgment is as before,
02:01:00.860 --> 02:01:03.351
they're within a range of weather conditions,
02:01:03.351 --> 02:01:06.493
it should limit the number of PSPSs
02:01:06.493 --> 02:01:09.040
or I should say the assets
02:01:09.040 --> 02:01:11.700
that are de-energized during PSPS.
02:01:16.490 --> 02:01:17.710
To the extent...
02:01:26.580 --> 02:01:28.030
Time check, one more minute.
02:01:30.653 --> 02:01:31.660
I have no further questions your Honor.
02:01:31.660 --> 02:01:32.800
All right, thank you.
02:01:33.870 --> 02:01:35.055
Good answer.
02:01:35.055 --> 02:01:37.670
(laughing)
02:01:37.670 --> 02:01:42.320
Next cross-examiner is SBUA Mr Strauss,
02:01:42.320 --> 02:01:44.980
please come up to the table and position yourself
02:01:44.980 --> 02:01:45.880
near a microphone.
02:01:54.560 --> 02:01:57.630
And Mr Strauss will you be using SBUA-X2?
02:02:00.098 --> 02:02:01.260
Your Honor, yes I will.
02:02:01.260 --> 02:02:03.531
Okay thank you. Do you have that Mr Vesey?
02:02:03.531 --> 02:02:04.463
Working on it.
02:02:09.030 --> 02:02:10.390
I have it in front of me.
02:02:10.390 --> 02:02:11.600
Okay thank you.
02:02:12.950 --> 02:02:14.000
Thank you Mr Vesey.
02:02:16.150 --> 02:02:18.520
I represent, my name is Arielle Strauss
02:02:18.520 --> 02:02:21.000
and I represent Small Business Utility Advocates.
02:02:23.500 --> 02:02:25.870
I will start with this exhibit.
02:02:25.870 --> 02:02:29.059
I understand that there was previously a question
02:02:29.059 --> 02:02:31.940
also related to the risk register.
02:02:34.900 --> 02:02:37.930
The risk register that we were pointed to
02:02:38.952 --> 02:02:43.330
in the response to SBUA's data request is attached.
02:02:44.517 --> 02:02:49.517
And does the risk register presently include PSPS events?
02:02:54.590 --> 02:02:56.560
To the best of my knowledge,
02:02:56.560 --> 02:03:00.920
it would be a mitigant to the wildfire
02:03:00.920 --> 02:03:02.723
which would be the risk event.
02:03:06.030 --> 02:03:07.480
Is the answer no?
02:03:09.920 --> 02:03:11.300
Are you asking me to specifically
02:03:11.300 --> 02:03:14.360
look towards this document that you have?
02:03:14.360 --> 02:03:15.630
I'm asking in your knowledge
02:03:15.630 --> 02:03:17.050
of the risk register.
02:03:17.050 --> 02:03:21.320
My knowledge that PSPS is not a risk event.
02:03:23.460 --> 02:03:26.900
How then are risks associated with de-energization
02:03:26.900 --> 02:03:31.720
accounted for by PG&E?
02:03:34.010 --> 02:03:36.390
Well, this is you know a good question
02:03:36.390 --> 02:03:39.100
and this is this point that when it's looked at
02:03:39.100 --> 02:03:43.500
as a risk mitigant that the fundamental answer
02:03:43.500 --> 02:03:46.720
is that broadly those risks are not evaluated
02:03:46.720 --> 02:03:49.390
on a rigorous basis within the risk programming.
02:03:50.683 --> 02:03:54.370
I mean, they're not to be verbose---
02:03:54.370 --> 02:03:59.370
Mr Vesey, are you saying that right now
02:03:59.680 --> 02:04:04.377
it is a mitigation measure to the wildfire risk
02:04:04.377 --> 02:04:07.640
as opposed to a risk in and of itself?
02:04:07.640 --> 02:04:08.473
Yes.
02:04:08.473 --> 02:04:13.000
Thank you.
02:04:16.760 --> 02:04:18.920
Now turning to some of your testimony
02:04:18.920 --> 02:04:22.140
about the reorganization or the changes
02:04:22.140 --> 02:04:26.190
in the responsibilities of different committees
02:04:26.190 --> 02:04:27.023
on the board.
02:04:28.758 --> 02:04:31.340
What mechanism is in place to ensure
02:04:31.340 --> 02:04:35.857
that the regulatory aspects of safety are not overlooked
02:04:35.857 --> 02:04:38.640
and to change responsibilities from compliance
02:04:38.640 --> 02:04:42.260
and public policy committee to safety and nuclear
02:04:42.260 --> 02:04:44.230
and operations committee?
02:04:46.348 --> 02:04:48.634
Can I ask where you're referring to
02:04:48.634 --> 02:04:52.467
in his testimony?
02:04:58.781 --> 02:05:00.540
I'll get back to that question a moment.
02:05:00.540 --> 02:05:02.020
I'll move on to other questions.
02:05:09.690 --> 02:05:12.160
One question that was asked of Mr Johnson
02:05:12.160 --> 02:05:14.600
was a concern regarding
02:05:15.980 --> 02:05:19.280
the possibility that with new board members coming on
02:05:19.280 --> 02:05:23.046
that have additional experience specifically in safety
02:05:23.046 --> 02:05:26.390
that there might be a lack of experience
02:05:26.390 --> 02:05:29.420
in certain areas, he identified that as a good question.
02:05:30.339 --> 02:05:32.776
As President of the utility,
02:05:32.776 --> 02:05:35.891
what is your response to the risk
02:05:35.891 --> 02:05:40.120
that the board currently may lack expertise
02:05:40.120 --> 02:05:43.720
in certain areas?
02:05:45.620 --> 02:05:47.970
Well let me give you the limits of my knowledge.
02:05:47.970 --> 02:05:50.669
One, when a board is formed
02:05:50.669 --> 02:05:53.570
and the current board was in place before I arrived,
02:05:53.570 --> 02:05:57.900
there is normally a risk matrix that is reviewed to ensure
02:05:58.898 --> 02:06:00.530
that there is a,
02:06:05.180 --> 02:06:09.538
sort of collectively the board can address the major issues
02:06:09.538 --> 02:06:12.350
and challenges not only that exists with the company
02:06:12.350 --> 02:06:13.280
that will emerge.
02:06:13.280 --> 02:06:17.624
I'm not familiar with the skills matrix
02:06:17.624 --> 02:06:20.480
that was used for the current board.
02:06:22.350 --> 02:06:26.360
The board that was setup in I believe April
02:06:26.360 --> 02:06:30.430
was specifically responsive to the bankruptcy
02:06:30.430 --> 02:06:32.170
and therefore might not be the board
02:06:32.170 --> 02:06:34.600
that has the typical skill composition
02:06:34.600 --> 02:06:37.756
thAt you would look for a long-run steady state.
02:06:37.756 --> 02:06:40.710
I'm just not aware of the skill mix.
02:06:40.710 --> 02:06:43.130
I'm aware that there is a combination
02:06:43.130 --> 02:06:45.230
that I can think of at least three or four members
02:06:45.230 --> 02:06:50.230
on the board who have utility or utility type experiences
02:06:51.662 --> 02:06:55.257
but I can't answer in more detail than that.
02:06:55.257 --> 02:06:56.180
Thank you.
02:06:59.580 --> 02:07:02.090
Regarding the plan for regionalization,
02:07:04.600 --> 02:07:09.290
would you say that large consumers in one part of the
02:07:10.939 --> 02:07:15.750
PG&E service territory have different needs
02:07:15.750 --> 02:07:18.220
than let's say large consumers
02:07:18.220 --> 02:07:20.420
in a different area based on their location?
02:07:21.590 --> 02:07:23.210
Well I don't know if it's based on the location
02:07:23.210 --> 02:07:25.920
but I wouldn't object to the view that
02:07:25.920 --> 02:07:28.370
different large customers have different needs
02:07:28.370 --> 02:07:31.540
based on their businesses and business objectives.
02:07:31.540 --> 02:07:32.373
Mm-hmm.
02:07:35.980 --> 02:07:39.130
And then similarly with regard to low income customers,
02:07:39.130 --> 02:07:42.110
let's say in San Francisco versus Stockton,
02:07:42.110 --> 02:07:45.260
would be a difference there in their needs
02:07:45.260 --> 02:07:46.500
based on their locations?
02:07:46.500 --> 02:07:48.420
I can imagine that again there would be,
02:07:48.420 --> 02:07:50.560
it may not just be directly related to the location
02:07:50.560 --> 02:07:52.600
but circumstance, yes.
02:07:52.600 --> 02:07:55.090
And in what respect would the circumstances differ?
02:07:55.090 --> 02:07:58.930
Well I mean a individual who is low income
02:07:58.930 --> 02:08:01.330
living in a rural or agricultural setting
02:08:01.330 --> 02:08:04.880
might be different than the same customer living in a city.
02:08:04.880 --> 02:08:08.493
The challenges that are presented to them would be different
02:08:08.493 --> 02:08:12.744
so one could offer that low-income customers
02:08:12.744 --> 02:08:15.946
who are in the Stockton area but are living
02:08:15.946 --> 02:08:18.700
in multi-unit housing is different than
02:08:18.700 --> 02:08:22.300
somebody who's living in a in a single residence.
02:08:22.300 --> 02:08:24.570
So I think there's a lot of differences
02:08:24.570 --> 02:08:27.975
of what the premise that individual customers need
02:08:27.975 --> 02:08:31.730
may be different based on situation.
02:08:32.720 --> 02:08:34.340
I can accept that.
02:08:34.340 --> 02:08:37.030
And would you say the examples of situational differences
02:08:37.030 --> 02:08:41.700
you described may have more to do with population density
02:08:41.700 --> 02:08:44.400
or city dynamics than it would specifically
02:08:44.400 --> 02:08:48.330
where they are regionally within the PG&E service territory?
02:08:48.330 --> 02:08:49.800
Maybe but there are a lot of factors
02:08:49.800 --> 02:08:51.580
because one of the factors are that
02:08:51.580 --> 02:08:52.720
given everything else the same
02:08:52.720 --> 02:08:53.990
but they live in a different place
02:08:53.990 --> 02:08:55.670
with different climatic conditions
02:08:55.670 --> 02:08:57.710
might give the yield different needs.
02:08:57.710 --> 02:08:59.340
If you're out in the Central Valley
02:08:59.340 --> 02:09:02.414
versus similar circumstance in San Francisco
02:09:02.414 --> 02:09:05.250
that might be a difference.
02:09:05.250 --> 02:09:08.315
There most likely a number of attributes
02:09:08.315 --> 02:09:10.510
that would determine the ultimate needs.
02:09:11.990 --> 02:09:14.730
And with respect to small businesses
02:09:14.730 --> 02:09:16.770
and the SMBs in particular
02:09:16.770 --> 02:09:19.710
let's give the example of a restaurant.
02:09:20.950 --> 02:09:24.390
Would a restaurant in one region have more in common
02:09:24.390 --> 02:09:26.520
or less income with restaurant another region?
02:09:27.720 --> 02:09:30.500
Well it depends on what the commonality is
02:09:30.500 --> 02:09:32.397
but there'll be certain things which would be different
02:09:32.397 --> 02:09:34.950
and perhaps certain things have to be the same
02:09:34.950 --> 02:09:36.400
so it's just, I don't know enough
02:09:36.400 --> 02:09:37.410
about the restaurant business
02:09:37.410 --> 02:09:40.200
to be specific but I can understand that
02:09:40.200 --> 02:09:42.810
they're based on location and circumstance,
02:09:42.810 --> 02:09:44.880
those needs could be different.
02:09:44.880 --> 02:09:46.510
And has your regionalization plan
02:09:46.510 --> 02:09:48.580
then considered what those differences would be
02:09:48.580 --> 02:09:51.750
with respect to the customer class we're discussing?
02:09:51.750 --> 02:09:53.110
Not in the first instance.
02:09:53.110 --> 02:09:56.580
I think what the plan is envisioning
02:09:56.580 --> 02:10:00.430
and we have talked to the multiple regions is that
02:10:00.430 --> 02:10:04.180
fundamentally the region's need to be designed in a way
02:10:04.180 --> 02:10:09.180
that the local management can actually understand
02:10:09.680 --> 02:10:12.920
what those differences are in serving their customers
02:10:12.920 --> 02:10:16.320
in the most responsive way.
02:10:16.320 --> 02:10:19.591
So it's a question of and I use this term
02:10:19.591 --> 02:10:22.530
and it's a term in the literature
02:10:22.530 --> 02:10:24.690
and sometimes people tell me not to use it
02:10:24.690 --> 02:10:26.970
but there's an issue of customer intimacy,
02:10:26.970 --> 02:10:30.277
it's really understanding customers and what they are about
02:10:30.277 --> 02:10:31.990
and the key to regionalization
02:10:31.990 --> 02:10:34.170
is to get closer to the customers
02:10:34.170 --> 02:10:35.760
and interface on a regular basis
02:10:35.760 --> 02:10:38.453
to fully understand what those needs are
02:10:38.453 --> 02:10:40.350
in that particular area.
02:10:44.810 --> 02:10:46.330
Let's be off the record.
02:10:46.330 --> 02:10:47.560
No, talk in the back.
02:10:48.590 --> 02:10:51.020
We can hear you up here. It's really distracting.
02:10:51.020 --> 02:10:52.840
Thanks, back on the record.
02:10:56.020 --> 02:11:01.020
So then with regard to expertise that's gained by PG&E
02:11:01.630 --> 02:11:03.780
by servings particular classes of customers
02:11:04.700 --> 02:11:08.300
how would that expertise be then shared to areas
02:11:08.300 --> 02:11:11.160
where that customer class may be less prevalent
02:11:11.160 --> 02:11:12.357
in a different region?
02:11:12.357 --> 02:11:15.450
You know a good question this is a design issue
02:11:15.450 --> 02:11:17.350
is that what you want to do is
02:11:17.350 --> 02:11:21.050
that when you have specific needs sets that are broad
02:11:21.050 --> 02:11:24.160
you want to develop an expertise for that
02:11:24.160 --> 02:11:25.640
and that expertise has to be shared.
02:11:25.640 --> 02:11:27.905
So the idea that you have individual regions,
02:11:27.905 --> 02:11:30.310
what is the issue of collaboration
02:11:30.310 --> 02:11:32.750
between these operating regions to take the learnings,
02:11:32.750 --> 02:11:36.090
to be able to share the skills to the benefit of all.
02:11:36.090 --> 02:11:38.310
One of the challenges that we have is that
02:11:38.310 --> 02:11:41.890
we have to become a much more rapidly learning organization
02:11:41.890 --> 02:11:44.320
and then we have to collaborate
02:11:44.320 --> 02:11:46.980
so that we don't create the silos.
02:11:46.980 --> 02:11:50.770
It's one of the key findings that I've come to recognize
02:11:50.770 --> 02:11:54.060
based on the review of past events and that is that
02:11:55.290 --> 02:11:57.694
we do not share information readily,
02:11:57.694 --> 02:12:01.460
we are siloed and my key in terms of this design
02:12:01.460 --> 02:12:06.000
is to make sure we have the processes implemented
02:12:06.000 --> 02:12:08.640
that would basically share in information
02:12:08.640 --> 02:12:10.590
and if there's enough commonality to create
02:12:10.590 --> 02:12:14.260
specific expertise within the business to deal with that.
02:12:14.260 --> 02:12:17.706
So it will come in time but the question is that
02:12:17.706 --> 02:12:20.150
I don't think we're looking to have separate
02:12:20.150 --> 02:12:22.550
isolated regions, each doing their own thing,
02:12:22.550 --> 02:12:25.010
where there's commonality that information would be shared,
02:12:25.010 --> 02:12:28.570
they'd be programming into where you would have economies
02:12:28.570 --> 02:12:30.790
of scale or knowledge that you could deploy.
02:12:30.790 --> 02:12:32.040
That's what you would do.
02:12:33.080 --> 02:12:35.770
So in light of this concern about silos
02:12:35.770 --> 02:12:37.110
and the history of PG&E
02:12:37.110 --> 02:12:39.670
and the way that that was identified as a risk factor
02:12:39.670 --> 02:12:42.267
and a factor in the safety history,
02:12:42.267 --> 02:12:45.490
do have any pause then going forward
02:12:45.490 --> 02:12:50.490
with establishing a program that could exacerbate silos?
02:12:50.960 --> 02:12:53.020
No, because as I said before,
02:12:53.020 --> 02:12:55.240
you know we keep thinking about the wiring diagram
02:12:55.240 --> 02:12:58.785
and regionalist as the be-all and end-all, it's not.
02:12:58.785 --> 02:13:02.750
When someone talks about how are you going to organize,
02:13:02.750 --> 02:13:06.007
the question is organized to do what, right?
02:13:06.007 --> 02:13:08.309
And so your organization really is the delivery
02:13:08.309 --> 02:13:12.500
of a set of competencies and capabilities into the market,
02:13:12.500 --> 02:13:14.880
which is what your organization should deliver.
02:13:14.880 --> 02:13:18.660
Only one dimension is the way you have your wiring diagrams.
02:13:18.660 --> 02:13:20.430
The other is how are you going to have
02:13:20.430 --> 02:13:23.480
your fundamental business processes work across those.
02:13:23.480 --> 02:13:25.020
If you know that siloing is an issue,
02:13:25.020 --> 02:13:28.694
find mechanisms to make sure that it doesn't occur.
02:13:28.694 --> 02:13:31.785
Every organizational design will have pros
02:13:31.785 --> 02:13:35.130
and it'll have cons and the key here is
02:13:35.130 --> 02:13:39.020
to recognize where a particular organization design is made
02:13:39.020 --> 02:13:44.020
so in this case to be more responsive to customers
02:13:45.200 --> 02:13:47.853
based on a real identification of needs,
02:13:47.853 --> 02:13:50.040
the offsetting points,
02:13:50.040 --> 02:13:51.420
that is the one were just discussing
02:13:51.420 --> 02:13:53.620
that you don't want that to stay resident
02:13:53.620 --> 02:13:55.030
only within that area.
02:13:55.030 --> 02:13:58.259
So that is taken care of by sharing,
02:13:58.259 --> 02:14:00.710
by creating knowledge objects
02:14:00.710 --> 02:14:02.133
that are shared across a business
02:14:02.133 --> 02:14:05.500
where issues erase any performance that is positive
02:14:05.500 --> 02:14:08.290
or negative is evaluated for learnings,
02:14:08.290 --> 02:14:11.064
so there's a lot more than just the regional organization
02:14:11.064 --> 02:14:13.442
and I can be clear that collaboration
02:14:13.442 --> 02:14:15.660
is one of the foundational issues
02:14:15.660 --> 02:14:17.513
that has to be sorted
02:14:17.513 --> 02:14:20.780
and whether that is between the electric and gas business,
02:14:20.780 --> 02:14:22.610
region business, the way we serve customers,
02:14:22.610 --> 02:14:26.303
it has to be part of the overall organizational design
02:14:26.303 --> 02:14:28.176
which is greater than just the wiring pictures
02:14:28.176 --> 02:14:31.050
and the establishment of regions.
02:14:40.771 --> 02:14:44.430
Now I understand that the new
02:14:48.260 --> 02:14:52.710
board structure and focus
02:14:52.710 --> 02:14:56.260
on safety is essential for the reorganized PG&E.
02:14:57.820 --> 02:15:00.350
What mechanisms are in place to ensure that
02:15:00.350 --> 02:15:04.027
this is not changed by the shareholders,
02:15:04.027 --> 02:15:06.520
meaning in this case the shareholders
02:15:06.520 --> 02:15:09.410
of the holding company?
02:15:16.670 --> 02:15:20.360
When we recognize that safety,
02:15:20.360 --> 02:15:25.360
specifically public safety is a key risk to the organization
02:15:26.038 --> 02:15:30.190
I would believe that it would be a major consideration
02:15:30.190 --> 02:15:32.400
in the skill matrix to make sure we have people,
02:15:32.400 --> 02:15:37.260
not only who have the focus on workplace safety
02:15:37.260 --> 02:15:39.580
but also public safety.
02:15:39.580 --> 02:15:42.348
It's a major risk so when we think back to
02:15:42.348 --> 02:15:45.550
how one deals with this issue of organization,
02:15:45.550 --> 02:15:47.560
which would start at the board level,
02:15:47.560 --> 02:15:50.801
it really is what is the business, what are the assets,
02:15:50.801 --> 02:15:53.490
what are you doing, what are the risks,
02:15:53.490 --> 02:15:54.890
and then the third question you ask,
02:15:54.890 --> 02:15:58.350
do I have the competencies that are adequate
02:15:58.350 --> 02:15:59.710
to respond to that?
02:15:59.710 --> 02:16:02.340
I would imagine, although I'm not involved in it here
02:16:02.340 --> 02:16:06.570
but I have been involved in past matrices for board members
02:16:06.570 --> 02:16:09.440
is you do a pretty rigorous review of business strategy
02:16:09.440 --> 02:16:11.880
of the risks of the environment to make sure that
02:16:11.880 --> 02:16:14.240
the major items of governance
02:16:14.240 --> 02:16:16.657
which is a foundational responsibility of the board
02:16:16.657 --> 02:16:20.540
are met with resident expertise in the whole.
02:16:21.400 --> 02:16:23.420
So that means you might have some individuals
02:16:23.420 --> 02:16:26.740
who are particularly deep, others who may not be
02:16:26.740 --> 02:16:29.532
but can add a view from other experience and processes.
02:16:29.532 --> 02:16:31.780
So I would think it's essential
02:16:31.780 --> 02:16:36.350
and even if there was a massive board refresh on emergence
02:16:36.350 --> 02:16:38.510
that these would still be among the key issues
02:16:38.510 --> 02:16:41.539
that have to be managed that could give confidence
02:16:41.539 --> 02:16:44.510
in investors that these risks are being dealt with
02:16:44.510 --> 02:16:46.310
at the highest level of the company.
02:16:48.106 --> 02:16:51.690
And then with respect to mechanisms however,
02:16:51.690 --> 02:16:54.530
what mechanisms are in place to ensure that
02:16:54.530 --> 02:16:58.400
that stays the way it is now or is further improved?
02:16:58.400 --> 02:17:00.530
Well I would manage that we would always want to improve.
02:17:00.530 --> 02:17:03.063
I mean I would imagine that there would still be
02:17:03.063 --> 02:17:05.910
a safety and nuclear oversight committee.
02:17:05.910 --> 02:17:08.390
I don't have a view that that would change
02:17:08.390 --> 02:17:12.103
but quite honestly I can't preempt decisions of a new board.
02:17:12.103 --> 02:17:14.944
They have a lot of decisions to take
02:17:14.944 --> 02:17:17.590
but I'll go back to the comment I already made
02:17:17.590 --> 02:17:18.860
that it would seem to me,
02:17:18.860 --> 02:17:22.595
it would be surprising to me if those competencies
02:17:22.595 --> 02:17:27.200
weren't reflected in the board
02:17:27.200 --> 02:17:28.650
and that the board wouldn't have
02:17:28.650 --> 02:17:30.773
an appropriate committee structure
02:17:30.773 --> 02:17:32.090
to make sure that they had appropriate oversight
02:17:32.090 --> 02:17:33.670
and held management accountable
02:17:33.670 --> 02:17:36.920
so I can't say nothing will change,
02:17:36.920 --> 02:17:40.540
I just would find it to be difficult to imagine
02:17:40.540 --> 02:17:43.490
that this would be fundamentally left aside
02:17:43.490 --> 02:17:44.990
in a reorganization that is
02:17:44.990 --> 02:17:47.760
so essentially fundamental to the company.
02:17:47.760 --> 02:17:49.790
For clarity of the record if I can point out
02:17:49.790 --> 02:17:53.140
that Miss Burnell, is the one who addresses,
02:17:54.270 --> 02:17:55.640
who works election process
02:17:55.640 --> 02:17:57.686
and that may be a better person
02:17:57.686 --> 02:18:00.932
for these types of questions.
02:18:00.932 --> 02:18:04.570
Likewise would board governance questions
02:18:04.570 --> 02:18:06.130
would be better directed to Miss Burnell?
02:18:06.130 --> 02:18:07.560
Yes.
02:18:07.560 --> 02:18:09.940
Thank you that concludes my questions.
02:18:09.940 --> 02:18:11.300
All right thank you.
02:18:11.300 --> 02:18:12.500
Let's be off the record.
02:18:13.350 --> 02:18:15.700
Okay, so I've that's everybody that's crossing.
02:18:16.560 --> 02:18:17.960
Will you have some redirect?
02:18:51.304 --> 02:18:53.077
Just a few questions.
02:18:53.077 --> 02:18:55.640
All right so just a reminder to everybody,
02:18:59.150 --> 02:19:02.400
12:45, 12:50 is when I really need to shut things down
02:19:04.720 --> 02:19:07.480
and at this point I would think we should reconvene
02:19:07.480 --> 02:19:09.740
at 8:30 tomorrow, does everybody agree?
02:19:09.740 --> 02:19:10.652
Yes, your Honor.
02:19:10.652 --> 02:19:12.000
Actually I don't.
02:19:13.338 --> 02:19:16.260
I would renew our respectful request.
02:19:20.410 --> 02:19:22.770
Okay well, I'm not.
02:19:24.949 --> 02:19:27.980
So I understand your concern
02:19:30.960 --> 02:19:35.960
but I think from a consistency standpoint
02:19:35.976 --> 02:19:39.780
we will start early and we will run long tomorrow
02:19:39.780 --> 02:19:42.890
so I think we will more than make up for
02:19:42.890 --> 02:19:47.090
the two hours of forgone time today tomorrow.
02:19:47.090 --> 02:19:47.923
Thank you your Honor.
02:19:47.923 --> 02:19:49.490
Just so we're clear though
02:19:49.490 --> 02:19:52.020
of the availability of our witnesses.
02:19:52.020 --> 02:19:53.020
Yes, I understand.
02:19:54.350 --> 02:19:57.430
Yes, I understand that.
02:19:57.430 --> 02:20:01.580
Okay, so let's be back on the record.
02:20:01.580 --> 02:20:03.740
Mr Mannheim, you said you have some redirect?
02:20:03.740 --> 02:20:05.490
Yes your Honor, thank you.
02:20:05.490 --> 02:20:08.317
Mr Vesey, just a couple clean up things.
02:20:08.317 --> 02:20:09.230
(woman speaking off mic)
02:20:09.230 --> 02:20:10.063
Oh, yeah.
02:20:11.200 --> 02:20:13.510
Mr Vesey, just a couple clean up questions.
02:20:14.410 --> 02:20:18.324
You were asked about the timeline
02:20:18.324 --> 02:20:20.630
for implementation of regionalization
02:20:20.630 --> 02:20:23.703
and I believe you stated that
02:20:23.703 --> 02:20:28.690
if unencumbered by other types of constraints that
02:20:28.690 --> 02:20:32.680
that could be implemented by the first quarter of 2020.
02:20:32.680 --> 02:20:34.860
Is that the date that you intended to state?
02:20:34.860 --> 02:20:37.450
No, I misspoke, it was first quarter 2021.
02:20:37.450 --> 02:20:38.283
Thank you.
02:20:40.766 --> 02:20:44.422
A few moments ago when you were describing
02:20:44.422 --> 02:20:47.351
the board selection process,
02:20:47.351 --> 02:20:52.160
you referred to the risk matrix.
02:20:52.160 --> 02:20:54.580
Did you intend to refer to the skills matrix?
02:20:54.580 --> 02:20:55.480
Skills matrix.
02:20:55.480 --> 02:20:57.080
Thank you.
02:20:57.080 --> 02:21:02.080
Yesterday Mr Geesman asked you some questions about
02:21:04.560 --> 02:21:06.210
board meeting notes
02:21:06.210 --> 02:21:09.870
that were delayed in a quarterly compliance report
02:21:09.870 --> 02:21:11.840
that PG&E provided.
02:21:11.840 --> 02:21:13.800
Were you able to look into that question?
02:21:13.800 --> 02:21:16.710
Yes, after yesterday's session I did look into it
02:21:16.710 --> 02:21:19.538
and I can confirm that the minutes were included
02:21:19.538 --> 02:21:23.865
in the January report and appended to it.
02:21:23.865 --> 02:21:27.233
So January 31 report that was submitted,
02:21:27.233 --> 02:21:29.003
those minutes were included
02:21:29.003 --> 02:21:31.427
and I've also been assured that the process
02:21:31.427 --> 02:21:34.750
for timely completion of minutes is being worked on.
02:21:34.750 --> 02:21:39.558
Thank you and one last point of clarification.
02:21:39.558 --> 02:21:41.150
You were asked
02:21:43.118 --> 02:21:46.300
by counsel for MCE about
02:21:48.180 --> 02:21:51.070
whether PG&E is in compliance
02:21:51.950 --> 02:21:54.874
with all of the legal requirements
02:21:54.874 --> 02:21:57.570
associated with vegetation management
02:21:57.570 --> 02:22:02.490
and then further on the enhanced vegetation,
02:22:02.490 --> 02:22:03.850
which is not a legal requirement
02:22:03.850 --> 02:22:06.270
but a voluntary PG&E program,
02:22:06.270 --> 02:22:07.800
whether we're in compliance
02:22:07.800 --> 02:22:12.060
and you stated yes and then Miss Fox asked you
02:22:12.060 --> 02:22:15.230
about the statement in front of Judge Alsup
02:22:15.230 --> 02:22:19.822
where counsel said no.
02:22:19.822 --> 02:22:21.813
Is it your understanding
02:22:21.813 --> 02:22:24.230
or let me ask the question this way.
02:22:24.230 --> 02:22:27.620
When you answered that question
02:22:28.770 --> 02:22:31.730
did you intend to state that
02:22:33.657 --> 02:22:38.150
PG&E meets all clearance requirements for veg management
02:22:38.150 --> 02:22:41.489
for every tree in our service territory at every moment?
02:22:41.489 --> 02:22:44.789
Are you able to to express an opinion on compliance
02:22:44.789 --> 02:22:46.517
in that sense?
02:22:46.517 --> 02:22:50.090
Well, in a snapshot in time
02:22:50.090 --> 02:22:52.080
it's very hard to know whether you're in,
02:22:52.080 --> 02:22:54.180
things grow, things move in that sense
02:22:54.180 --> 02:22:55.380
and to be quite honest
02:22:56.985 --> 02:22:58.660
and when I was talking about compliance
02:22:58.660 --> 02:23:02.150
there are standards, there are rules that we have to meet,
02:23:02.150 --> 02:23:04.280
we then turn that into programming.
02:23:04.280 --> 02:23:05.880
My view of being compliant was
02:23:05.880 --> 02:23:07.978
whether we were executing the work plan
02:23:07.978 --> 02:23:10.540
that we had initiated
02:23:10.540 --> 02:23:14.450
so I meant aligned with and accomplishing that work plan.
02:23:14.450 --> 02:23:17.880
I wasn't specifically talking to the legal compliance
02:23:20.380 --> 02:23:21.640
in terms of the regulations,
02:23:21.640 --> 02:23:23.756
only the work we were doing that is based on that
02:23:23.756 --> 02:23:26.412
and to the answer again to your question is that
02:23:26.412 --> 02:23:28.520
at any given moment in time
02:23:28.520 --> 02:23:29.860
it's hard to assure compliance
02:23:29.860 --> 02:23:32.580
because trees grow, things fall, things change.
02:23:32.580 --> 02:23:34.100
Thank you very much.
02:23:34.100 --> 02:23:36.250
That's all the questions I have your Honor.
02:23:37.604 --> 02:23:39.950
Do you have redirect Mr Geesman?
02:23:40.810 --> 02:23:43.330
Your Honor, I have two questions on recross.
02:23:45.800 --> 02:23:47.000
Yeah, I know, recross.
02:23:49.640 --> 02:23:50.473
Okay.
02:23:51.680 --> 02:23:53.610
There was only one question on redirect
02:23:53.610 --> 02:23:56.680
so, (laughing) go ahead.
02:23:56.680 --> 02:24:00.660
Mr Vesey, the January report
02:24:00.660 --> 02:24:02.900
that you indicated on redirect
02:24:04.120 --> 02:24:07.732
that came after the first quarterly report
02:24:07.732 --> 02:24:10.330
that you and I were discussing yesterday
02:24:10.330 --> 02:24:11.330
is that not correct?
02:24:12.908 --> 02:24:17.675
What I had found is that in the July 31, 2020 report
02:24:17.675 --> 02:24:21.258
the minutes were attached.
02:24:21.258 --> 02:24:22.450
Where were they--
02:24:22.450 --> 02:24:25.240
Wait a moment, the January 31 report
02:24:25.240 --> 02:24:26.200
had the minutes attached?
02:24:26.200 --> 02:24:27.033
Yes.
02:24:28.040 --> 02:24:30.980
When were they forwarded to the Commission?
02:24:30.980 --> 02:24:33.860
I don't have that detail, I apologize.
02:24:33.860 --> 02:24:37.980
Do you happen to know if that was after A4NR
02:24:37.980 --> 02:24:42.030
had filed a protest with the Commission of the advice letter
02:24:42.030 --> 02:24:45.250
that was cross-examination Exhibit A4NR-X4?
02:24:46.661 --> 02:24:48.936
I apologize I don't know the timing
02:24:48.936 --> 02:24:50.970
and the occurrence of events.
02:24:50.970 --> 02:24:52.128
Thank you.
02:24:52.128 --> 02:24:54.070
So tomorrow let's have a statement from council
02:24:54.070 --> 02:24:55.170
with that information.
02:24:56.548 --> 02:24:58.111
Okay.
02:24:58.111 --> 02:25:01.790
Miss Kelly did you have recross as a function
02:25:01.790 --> 02:25:04.291
of the redirect question?
02:25:04.291 --> 02:25:05.460
Yes, your Honor.
02:25:05.460 --> 02:25:09.110
May I have just one minute off the record?
02:25:09.110 --> 02:25:12.860
Yes, you can work on that while, Mr Abrams,
02:25:12.860 --> 02:25:17.860
did you have re-cross based on a redirect question
02:25:18.430 --> 02:25:21.560
that you asked that was clarifying something
02:25:21.560 --> 02:25:23.670
he answered in response to you?
02:25:23.670 --> 02:25:25.840
Yes, even though it was directed at another party
02:25:25.840 --> 02:25:28.330
he representing something that I also brought up,
02:25:28.330 --> 02:25:30.580
which was the enhanced vegetation management.
02:25:32.350 --> 02:25:34.370
So in terms of a redirect--
02:25:35.620 --> 02:25:37.900
Recross.
Sorry, recross sorry.
02:25:39.030 --> 02:25:42.666
The term things grow, things fall, things move
02:25:42.666 --> 02:25:46.670
and earlier it was represented that sometimes things break,
02:25:46.670 --> 02:25:49.020
do you feel that statements like that mean
02:25:49.020 --> 02:25:52.430
that more metrics need to be tied to financial metrics
02:25:52.430 --> 02:25:53.970
and the bottom line of PG&E?
02:25:58.429 --> 02:26:00.060
Well let me just answer the question,
02:26:00.060 --> 02:26:02.110
I specifically think that
02:26:02.110 --> 02:26:03.860
better metrics improve performance.
02:26:05.290 --> 02:26:07.900
So in that sense that the more metrics
02:26:07.900 --> 02:26:11.450
we have about the work we do to not only talk about
02:26:11.450 --> 02:26:13.580
the efficiency but the effectiveness of it
02:26:13.580 --> 02:26:16.280
as we've discussed before are important.
02:26:16.280 --> 02:26:18.700
The question about the tying to financial performance
02:26:18.700 --> 02:26:21.730
is one that I'm not going to give another view on
02:26:21.730 --> 02:26:23.670
as I've already stated that I don't believe that
02:26:23.670 --> 02:26:26.810
you need that direct contact between those measures.
02:26:28.100 --> 02:26:30.440
Specific to vegetation management?
02:26:31.770 --> 02:26:33.770
Specifically to vegetation management.
02:26:35.560 --> 02:26:36.960
All right, Miss Kelly.
02:26:49.560 --> 02:26:51.710
Your Honor I'm having difficulty locating
02:26:52.990 --> 02:26:56.261
Judge Alsup's original filing with regards to his question.
02:26:56.261 --> 02:26:58.654
Okay, Miss Sheriff was one of the questions
02:26:58.654 --> 02:27:01.740
on redirect related to one of your questions?
02:27:01.740 --> 02:27:02.790
I've forgotten now.
02:27:04.100 --> 02:27:05.190
Thank you your Honor.
02:27:05.190 --> 02:27:08.040
Yes, it was it was regarding the timeline
02:27:08.040 --> 02:27:10.280
for the regional restructuring plan.
02:27:10.280 --> 02:27:12.280
Okay so did you have any recross?
02:27:12.280 --> 02:27:13.540
I do your Honor.
02:27:13.540 --> 02:27:14.740
Please go ahead.
02:27:14.740 --> 02:27:15.620
Thank you.
02:27:15.620 --> 02:27:18.494
Mr Vesey, just to be clear
02:27:18.494 --> 02:27:21.800
for my understanding and for the record,
02:27:23.381 --> 02:27:27.187
if as of June 30, 2020
02:27:28.870 --> 02:27:31.560
upon the exit from bankruptcy
02:27:33.720 --> 02:27:37.608
if there were no encumbrances you believe the company
02:27:37.608 --> 02:27:41.710
could accomplish the regional restructuring plan
02:27:41.710 --> 02:27:45.760
and implement it by Q1 2021?
02:27:46.802 --> 02:27:50.260
It would have been my goal to actually
02:27:50.260 --> 02:27:53.400
roll into a regional structure at that time.
02:27:53.400 --> 02:27:55.560
By Q1 2021.
Q1 2021.
02:27:56.890 --> 02:28:01.010
We discussed the encumbrance of the wildfire season,
02:28:01.010 --> 02:28:03.870
if my memory serves, is that your understanding as well?
02:28:03.870 --> 02:28:04.862
Yes.
02:28:04.862 --> 02:28:08.612
Can you define for me for what your understanding
02:28:08.612 --> 02:28:13.330
of the timing of the wildfire season is for the company?
02:28:13.330 --> 02:28:17.010
Yeah, my belief and participating in it
02:28:17.010 --> 02:28:22.010
that the wildfire season for us can begin as early as June
02:28:22.598 --> 02:28:25.030
and we can potentially still have events
02:28:25.030 --> 02:28:29.041
as late as November until the rains materialize.
02:28:29.041 --> 02:28:33.683
So my view is between June and the end of November
02:28:33.683 --> 02:28:36.280
we would be hesitant to be doing anything
02:28:36.280 --> 02:28:38.530
that could be disruptive to the organization.
02:28:39.510 --> 02:28:41.410
Understood, thank you for that clarification.
02:28:41.410 --> 02:28:43.590
Are there any additional encumbrances
02:28:43.590 --> 02:28:45.530
that you had in mind when you responded
02:28:45.530 --> 02:28:48.340
to the question of Mr Mannheim?
02:28:50.497 --> 02:28:53.730
No, that was my major concern.
02:28:53.730 --> 02:28:54.563
Thank you.
02:28:54.563 --> 02:28:55.396
Thank you your, Honor.
02:28:55.396 --> 02:28:56.630
All right miss Kelly.
02:29:01.250 --> 02:29:03.140
ASPU has no recross.
02:29:05.630 --> 02:29:07.450
Right, Miss Kelly's up next.
02:29:16.560 --> 02:29:18.390
I actually believe that everything that I need
02:29:18.390 --> 02:29:21.970
is already submitted into the record in other documents.
02:29:21.970 --> 02:29:23.710
Okay, thank you.
02:29:23.710 --> 02:29:26.480
Is there any redirect?
02:29:26.480 --> 02:29:27.550
All right, thank you.
02:29:27.550 --> 02:29:29.870
Thank you Mr Vesey, you are excused.
02:29:29.870 --> 02:29:31.070
Let's be off the record.
02:29:32.440 --> 02:29:36.627
Should we just quickly swear in Mr Wells
02:29:36.627 --> 02:29:39.150
so that we don't have to do that tomorrow morning?
02:29:40.450 --> 02:29:42.590
Okay, come on up Mr Wells.
02:29:43.750 --> 02:29:46.000
And then we'll close up after that
02:29:46.000 --> 02:29:47.850
and we'll reconvene tomorrow at 8:30.
02:29:51.150 --> 02:29:52.450
Good afternoon.
02:29:52.450 --> 02:29:54.830
All right let's be on the record.
02:29:54.830 --> 02:29:57.950
At this time we call to the stand Mr Wells
02:29:57.950 --> 02:30:00.050
on behalf of Pacific Gas and Electric.
02:30:00.050 --> 02:30:01.170
Please stand and raise your right hand.
02:30:01.170 --> 02:30:03.240
Do you solemnly swear/affirm
02:30:03.240 --> 02:30:05.540
that the testimony you're about to give
02:30:05.540 --> 02:30:06.690
shall be the truth, the whole truth,
02:30:06.690 --> 02:30:08.146
and nothing but the truth?
02:30:08.146 --> 02:30:10.345
Yes.
Thank you.
02:30:10.345 --> 02:30:12.270
Please be seated and state your name
02:30:12.270 --> 02:30:13.910
and place of business for the record.
02:30:15.172 --> 02:30:18.050
Jason Wells, 77 Beale Street, San Francisco, California.
02:30:19.580 --> 02:30:20.520
Thank you do you want to do
02:30:20.520 --> 02:30:24.030
the introduction, Mr. Weisman?
02:30:24.030 --> 02:30:25.260
Thank you your Honor.
02:30:25.260 --> 02:30:27.830
Good afternoon Mr Wells, thank you for your patience.
02:30:27.830 --> 02:30:29.330
What is your title?
02:30:29.330 --> 02:30:30.340
I'm executive vice President
02:30:30.340 --> 02:30:33.460
and chief financial officer for PG&E corporation.
02:30:33.460 --> 02:30:36.190
Are you sponsoring what has been marked
02:30:36.190 --> 02:30:40.500
for identification as chapter two of PG&E one?
02:30:40.500 --> 02:30:41.800
I am.
02:30:41.800 --> 02:30:44.420
Also sponsoring the relevant portions
02:30:44.420 --> 02:30:46.895
of the corrections volume which has been marked as
02:30:46.895 --> 02:30:49.216
exhibit seven as it relates to your testimony?
02:30:49.216 --> 02:30:51.890
Yes, I am.
02:30:51.890 --> 02:30:53.800
Are you also sponsoring what has been marked
02:30:53.800 --> 02:30:58.630
for identification as exhibits PG&E, nine, 10,
02:30:58.630 --> 02:30:59.580
11,
02:30:59.580 --> 02:31:00.500
12,
02:31:00.500 --> 02:31:01.333
13,
02:31:01.333 --> 02:31:03.120
14,
02:31:03.120 --> 02:31:04.529
15?
02:31:04.529 --> 02:31:05.362
Yes, I am.
02:31:08.605 --> 02:31:12.870
Turning your attention to page 2-20 line 10.
02:31:14.050 --> 02:31:15.220
Of which exhibit?
02:31:15.220 --> 02:31:17.927
Of chapter two of exhibit one.
02:31:30.040 --> 02:31:30.910
Go ahead.
02:31:39.540 --> 02:31:43.270
Do you see there where it refers to reducing
02:31:43.270 --> 02:31:44.623
the utilities--
02:31:44.623 --> 02:31:46.210
(woman speaking off mic)
02:31:46.210 --> 02:31:47.640
Reducing.
02:31:47.640 --> 02:31:51.220
Reducing the utilities cost of a long term
02:31:51.220 --> 02:31:53.680
borrowing by over one billion?
02:31:53.680 --> 02:31:54.840
Do see that?
02:31:54.840 --> 02:31:55.673
Yes, I do.
02:31:55.673 --> 02:31:57.990
And would you like to make a correction to that phrase?
02:31:57.990 --> 02:31:59.030
I would.
02:31:59.030 --> 02:32:00.770
What would the correction be?
02:32:00.770 --> 02:32:02.880
Less than one billion.
02:32:06.940 --> 02:32:09.570
Subject to those corrections
02:32:09.570 --> 02:32:11.920
do you adopt the testimony that
02:32:11.920 --> 02:32:14.540
we have identified as being sponsored by you?
02:32:14.540 --> 02:32:15.373
I do.
02:32:15.373 --> 02:32:17.660
And was that testimony prepared by you
02:32:17.660 --> 02:32:19.020
or under your direction?
02:32:19.020 --> 02:32:19.860
It was.
02:32:19.860 --> 02:32:23.830
And is that testimony true and correct
02:32:23.830 --> 02:32:25.450
to the best of your knowledge and belief?
02:32:25.450 --> 02:32:26.380
Yes, it is.
02:32:26.380 --> 02:32:28.876
Your Honor witness is available for cross-examination.
02:32:28.876 --> 02:32:30.650
Okay, thank you.
02:32:30.650 --> 02:32:34.340
So we are going to begin cross-examination tomorrow
02:32:34.340 --> 02:32:38.001
for this witness at 8:30 AM
02:32:38.001 --> 02:32:42.897
The first party that will begin is A4NR
02:32:45.330 --> 02:32:47.120
followed by MCE
02:32:49.040 --> 02:32:50.200
then CLECA,
02:32:52.200 --> 02:32:53.850
City and County of San Francisco,
02:32:54.980 --> 02:32:56.080
Mr Abrams,
02:32:57.570 --> 02:32:58.403
EPUC,
02:32:59.678 --> 02:33:02.400
TURN Cal Advocates.
02:33:04.630 --> 02:33:09.183
Okay, we have a lot of business to do tomorrow so please
02:33:10.720 --> 02:33:15.083
try to refine down as much as possible your questioning.
02:33:16.980 --> 02:33:19.730
Following Mr Wells we will have Miss Brunel
02:33:21.360 --> 02:33:23.400
and then Miss Hoggle.
02:33:25.200 --> 02:33:29.500
And we'll have a very long day tomorrow.
02:33:29.500 --> 02:33:32.710
What time should we expect to end tomorrow, your Honor?
02:33:32.710 --> 02:33:37.260
I will have a better answer for you at lunchtime tomorrow.
02:33:39.660 --> 02:33:40.493
All right.
02:33:44.260 --> 02:33:45.540
Certainly not earlier than four
02:33:45.540 --> 02:33:49.190
but those of us, some may have travel plans and so on.
02:33:49.190 --> 02:33:50.589
Yeah.
That's why I'm asking.
02:33:50.589 --> 02:33:53.010
I think we'll have to see how it goes
02:33:53.010 --> 02:33:55.590
with the cross-examination for Mr Wells.
02:33:55.590 --> 02:33:56.940
If we're moving through it quickly
02:33:56.940 --> 02:34:01.060
I think then we have an earlier four o'clock end,
02:34:01.060 --> 02:34:04.600
if we are not given the constraints of the witnesses
02:34:04.600 --> 02:34:08.140
we will figure out a plan of action at that point.
02:34:09.250 --> 02:34:10.083
Okay.
02:34:11.220 --> 02:34:12.540
Thank you everybody
02:34:12.540 --> 02:34:17.540
and I appreciate your indulgence from my presence today.
02:34:18.119 --> 02:34:21.600
I am anticipating it will be me tomorrow as well
02:34:23.600 --> 02:34:26.640
and so I will most likely see you all
02:34:26.640 --> 02:34:28.340
at 8:30 tomorrow morning.
02:34:28.340 --> 02:34:29.270
Off the record.
02:34:29.270 --> 02:34:32.770
Thank you, your Honor.