PG&E makes organizational changes to risk, audit, and safety

PG&E said the changes are “intended to further strengthen its enterprise-wide risk mitigation and operational safety capabilities.” Among the intended shifts includes the separation of risk from audit.

Currently, PG&E has a vice president of internal audit and chief risk officer, whose duties include enterprise risk, internal audit, Sarbanes-Oxley compliance, market and credit risk management, third-party risk management, loss control, and insurance. “Going forward, those responsibilities will be split between two senior leaders—a chief risk officer and a chief audit officer,” PG&E said. PG&E said it’s also “elevating the current position of chief safety officer to a senior vice president role.”

Eighty-four people were killed in a 2018 wildfire directly caused by faulty equipment being used by PG&E. The company last month pleaded guilty to 84 counts of involuntary manslaughter and paid $25.5 billion in compensation for the lives lost and families destroyed.

PG&E was also featured in the 2000 film “Erin Brockovich,” based on the true story that PG&E was poisoning employees and residents near the company’s power plant in Hinkley, Calif. That town is still fighting for clean water nearly 25 years after that infamous case.

New PG&E appointments

Sumeet Singh, who previously led PG&E’s wildfire safety efforts through 2019, will return to PG&E as chief risk officer, effective Aug. 1. In that role, Singh will report directly to PG&E’s interim CEO Bill Smith and will have oversight over all risk management related to the company’s operations and public safety.

Such oversight responsibilities include “risks associated with wildfires, nuclear, dams, natural gas and natural disasters, as well as other strategic risks confronting utilities, including those relating to cyber-attacks, pandemic and other catastrophic events,” PG&E said. Singh also will be responsible for evaluating risks associated with the Public Safety Power Shutoff program.

Singh previously was vice president of PG&E’s Community Wildfire Safety Program. He also held leadership roles in its gas operations after the San Bruno transmission pipeline explosion in 2010 as the company worked to overhaul and improve its gas system.

Stephen Cairns, who currently serves as PG&E’s VP of internal audit and chief risk officer, will transition to the new role of chief audit officer, effective Aug. 1, and will report to PG&E’s Chief Financial Officer Jason Wells. Cairns joined PG&E in 2006 as senior director of internal auditing and subsequently took on compliance and ethics.

Cairns will oversee PG&E’s internal audit function, “including its expanded role in supplier auditing and proactive fraud detection efforts through advanced analytics,” the company stated. Cairns will also oversee a new program “to improve PG&E’s quality assurance functions in addition to his oversight of Sarbanes-Oxley compliance, third-party risk management, market and credit risk management, and loss control and insurance.

Related legislation

On June 30, California Governor Gavin Newsom approved legislation, “The Golden State Energy Act” (SB 350), that would create a non-profit entity, called “Golden State Energy,” that could take over PG&E if the utility (a) cannot emerge from bankruptcy by Sept. 30 or (b) fails to meet safety obligations outlined by the California Public Utilities Commission (CPUC) as part of its decision to approve PG&E’s Chapter 11 reorganization plan. SB 350, introduced by State Senator Jerry Hill in February, gives the CPUC authority to petition a court to appoint a receiver for PG&E if it determines it is warranted.