Finalist: Staff of The Wall Street Journal

Documents obtained by The Wall Street Journal show that the utility has long been aware that parts of its 18,500-mile transmission system were dangerously outdated

By Katherine Blunt and Russell Gold

PG&E Corp. knew for years that hundreds of miles of high-voltage power lines could fail and spark fires, yet it repeatedly failed to perform the necessary upgrades.

Documents obtained by The Wall Street Journal under the Freedom of Information Act and in connection with a regulatory dispute over PG&E’s spending on its electrical grid show that the company has long been aware that parts of its 18,500-mile transmission system have reached the end of their useful lives.

The failure last year of a century-old transmission line that sparked a wildfire, killed 85 people and destroyed the town of Paradise wasn’t an aberration, the documents show. A year earlier, PG&E executives conceded to a state lawyer that the company needed to process many projects, all at once, to prevent system failures—a problem they said could be likened to a “pig in the python.”

Even before November’s deadly fire, the documents show, the company knew that 49 of the steel towers that carry the electrical line that failed needed to be replaced entirely.

In a 2017 internal presentation, the large San Francisco-based utility estimated that its transmission towers were an average of 68 years old. Their mean life expectancy was 65 years. The oldest steel towers were 108 years old.

PG&E, which supplies electricity and natural gas to 16 million people, or about one in 20 Americans, operates one of the oldest long-distance electrical transmission networks in the world. It was built beginning in the early 1900s to carry hydroelectric power from the Sierra Nevada to the San Francisco Bay Area. Many of its original steel towers and other equipment are still in service.

The danger posed by PG&E’s neglect of its transmission lines increased around 2013, when a historic drought dried up much of California, creating extraordinary fire conditions. In its 2017 internal presentation, the company said it needed a plan to replace towers and better manage lines to prevent “structure failure resulting [in] conductor on ground causing fire.”

Nevertheless, PG&E repeatedly delayed upgrades of some of its oldest transmission lines, ranking them as low-risk projects, while it spent billions of dollars on other work it considered higher priority, such as substation upgrades, according to federal regulatory filings.

Among the problems, the utility has struggled to figure out which of its lines needed the most attention.

Until recently, PG&E hadn’t regularly climbed its towers to inspect their condition, despite the suggestion of an outside consultant it hired, according to interviews with current and former company officials and documents filed in connection with a spending dispute between PG&E and state regulators. It began detailed inspections of its transmission lines only after the Camp Fire that destroyed Paradise.

In addition to those inspections, PG&E said it began using drones and helicopters earlier this year to capture images of its transmission structures to analyze their condition, identify potential points of failure and prioritize repairs.

State fire officials concluded in May that a failure of PG&E equipment on a line known as the Caribou-Palermo, built in 1921, caused the fire, the deadliest in California history.

Federal and state regulators have paid little attention to the condition of PG&E’s transmission system, and have largely left it up to the company to decide what to upgrade and when. California officials are proposing adding more inspections and oversight.

Utilities across the U.S. have neglected to maintain older high-voltage lines, many built to support booming population growth in the decades before and after World War II, said Gregory Reed, director of the Energy GRID Institute at the University of Pittsburgh.

“We have known for a long time that we are dealing with aging and antiquated infrastructure,” he said. “In a lot of cases, the business model was to wait for a failure and then respond.”

PG&E sought bankruptcy protection in January, citing more than $30 billion in potential liability stemming from lawsuits and other claims related to its role in sparking fires. The company in December began “enhanced inspections” that included climbing towers, some for the first time in decades.

After completing those inspections, the company disclosed June 19 that it needs to make thousands of repairs. And it decided to permanently shut down the Caribou-Palermo line after assessing the amount of work it would take to operate it safely.

PG&E said it already has repaired or made spot fixes to the most severe problems it uncovered throughout its system. Risks remain, and the company said it is working to prioritize and address them as wildfire season progresses.

“The reality is the number of safety risks that we’ve found from our standpoint is unacceptable,” said Sumeet Singh, vice president of the company’s community wildfire safety program.

Elizaveta Malashenko, the safety and enforcement chief for the California Public Utilities Commission, said that after reviewing the inspection results, she “would not be comfortable making a statement that [the Caribou-Palermo] was an outlier.”

Ms. Malashenko said the CPUC’s safety auditors have historically relied on utility records rather than field inspections, which are far more costly to conduct. After the Camp Fire, the agency has asked the state for $25 million to create a three-year program to put its own inspectors in the field, in part because of the problems PG&E has discovered within its system.

“No matter how you look at it, PG&E has a lot of work to do,” she said.

The part of PG&E’s grid that includes the Caribou-Palermo line, known as the Caribou-Valona system, is so old that segments were considered candidates for the National Register of Historic Places at one point by federal agencies. Approximately 800 of the original steel towers built to hold up the transmission lines are still in use, according to PG&E correspondence with federal officials, uncovered through a public-records request.

PG&E delayed safety work on the Caribou-Palermo line for more than five years, the Journal reported in February. The company needed to replace 49 steel towers “due to age,” and hardware and aluminum line on 57 towers “due to age and integrity,” according to memos PG&E officials sent in 2017 and early 2018 to the U.S. Forest Service, whose territory the line crosses. The Journal learned the scope of the work, which hasn’t previously been reported, through a Freedom of Information Act request to federal forest managers.

PG&E has delayed maintenance work on several lines in Northern California’s highest-threat fire areas, including at least one near the Plumas National Forest, federal documents show. The company hasn’t detailed the scope of the work needed for each line, but it has disclosed that some require upgrades similar to those needed on the Caribou-Palermo line it stopped using.

The deferred maintenance became a problem when drought this decade killed millions of trees, greatly heightening the risk of wildfire throughout Northern California. State fire officials concluded that the company’s equipment sparked 18 wildfires in 2017, in most cases because trees made contact with lower-voltage lines.

In response, the company doubled down on tree trimming. The Camp Fire forced PG&E to turn its attention to higher-voltage lines, which typically run through wide paths cleared of trees.

Documents show that PG&E is unaware of the exact age of many of its transmission towers and wires. In 2010, PG&E commissioned consulting firm Quanta Technology, a subsidiary of Quanta Services Inc., to assess the age and condition of transmission structures throughout its 70,000-square-mile service area.

The firm was unable to determine the age of about 6,900 towers in the 115-kilovolt system. It found that nearly 30% of the remaining towers in that system, more than 3,500, were installed in the 1900s and 1910s. About 60% of the structures in the 230-kilovolt system were built between 1920 and 1950.

It is common practice for utilities to use laser imaging equipment to inspect towers instead of having workers climb them. Because PG&E had so many old towers, Quanta concluded that the company should consider climbing at least a sample of them every three to five years.

PG&E didn’t implement that recommendation, said Placido J. Martinez, a former PG&E head of strategic asset management. “We felt we were doing enough,” he said.

Regulators have little say over such transmission-maintenance planning. Although PG&E files transmission-spending plans with the Federal Energy Regulatory Commission, the agency’s jurisdiction is over rates and terms of service. If state officials or electric companies that rely on PG&E’s wires want to challenge the utility’s spending, it is up to them to parse the annual federal filings, which often exceed 1,500 pages. Projects that involve routine maintenance, such as replacing aging towers, hardware and conductors, don’t require state or federal approval.

California regulators have hundreds of pages of rules for many aspects of utility operations. Their rules for transmission are three sentences long. They simply say that each utility must come up with its own procedures and follow them.

With no regulator keeping a close eye, the timetable for completing important upgrades slipped. PG&E told federal regulators it planned to overhaul the Caribou-Palermo line in 2013, yet it still hadn’t made improvements when a piece of hardware holding a high-voltage line failed last November, sending sparks into the grass and igniting the Camp Fire.

After the Journal reported earlier this year that the planned upgrades to that line had been delayed, PG&E released a statement saying the work was “not maintenance-related (i.e., work relating to identifying and fixing broken or worn parts).”

Internally, however, that is how the company characterized it. In a 2017 email to Forest Service officials, PG&E land planner Paul Marotto wrote that the company’s “planned maintenance includes structure replacement, conductor replacement, conductor re-tensioning, installation of new insulators and structure modifications.” PG&E officials said the work was needed in part because the strength of the aging towers and wires had deteriorated.

Asked about the email, PG&E said it still disputes that the work was maintenance related, saying it was needed to adhere to 2010 industry guidelines that called on companies to ensure their transmission lines met design specifications.

PG&E has told state regulators it has struggled to consolidate data on the condition of its equipment. Kevin Dasso, PG&E’s vice president of electric asset management until earlier this year, said the lack of comprehensive information made it difficult to determine which transmission lines were approaching the point of failure.

In 2018, when PG&E proposed a spending plan to federal regulators for thousands of transmission-line upgrades, it used a risk-based system to prioritize the projects. Nearly 600 projects, with an estimated $2.7 billion cost, had a higher risk score than Caribou-Palermo, indicating PG&E considered that work more urgent.

PG&E said it has improved its records in recent years by conducting inventories in the field and has built databases to upgrade its analytical capabilities.

Other PG&E transmission lines at least as old as the Caribou-Palermo remain in service. One leg of the Caribou-Valona network, known as the Ignacio-Mare Island line, delivers power to an electric switchyard at the edge of a high-fire-risk area in Marin County north of the Golden Gate Bridge and a now-closed naval shipyard. At least 28 of the towers on the line have been in place since 1921, according to a company inventory.

PG&E has repeatedly delayed work on the line, which has segments sagging too close to the ground, since first proposing it in 2014, federal regulatory filings show. The $6.9 million project, which involves increasing the height of 44 towers, was initially expected to be completed in 2015 but now is slated to start next year, the company said.

The company also has delayed upgrades to several 115-kilovolt lines passing through national forests that have become California’s highest-risk fire areas, the filings indicate. A line partly in the Plumas National Forest was slated for work this year, but was delayed and now is on hold because of the Camp Fire investigation.

A line built to carry hydroelectric power through the Eldorado and Stanislaus national forests was scheduled for upgrades in 2016, but work isn’t expected to start until the second half of next year. A line in the Los Padres National Forest near San Luis Obispo was initially set for upgrades in 2015 that now are scheduled to start in 2021.

PG&E acknowledged in its 2017 internal presentation that it had poor age data on the towers in its 60-kilovolt system. The company recently targeted one leg for extensive work after discovering that 10 towers within the Golden Gate National Recreation Area were at high risk of failure.

A June 5 letter from PG&E said the towers are in “critical condition with noticeable material loss and ground erosion” and require round-the-clock monitoring. The company estimated it will take more than a year to replace towers and make permanent repairs.

Since 2013, the utility has repeatedly delayed upgrades to the high-voltage line that ran near Paradise, Calif., records show

By Katherine Blunt and Russell Gold

For five years, PG&E Corp. repeatedly delayed a safety overhaul of a century-old high-voltage transmission line that is a prime suspect behind the deadliest wildfire in California history.

The company told federal regulators in 2013 it planned to replace many of the towers, wires and hardware pieces on the line, called the Caribou-Palermo, regulatory filings show. It again proposed the project in 2014, 2015 and 2016—pushing it back each year. The company planned to start work June 2018 and finish late last year. It hasn’t begun.

On Nov. 8, 2018, winds picked up before sunrise near Paradise, Calif., when a wire snapped free from the Caribou-Palermo line, creating an electric arc that scorched the metal tower supporting it. A few minutes later, a PG&E worker spotted a quarter-acre fire under the line, the company has disclosed. Within hours, what became known as the Camp Fire destroyed Paradise and killed 85 people. California fire investigators haven’t yet determined the fire’s cause.

PG&E restarted the line following last November’s fire after spot repairs, it said this week. The line underwent a close inspection in December, with linemen climbing some towers for the first time in years. The inspection uncovered additional problems, the company said, and it has shut down the entire line and has no estimate for when it will resume service.

PG&E’s repeated delays of the Caribou-Palermo line’s maintenance project haven’t been previously reported, nor has the decision by the company to shut down the line.

PG&E operates a vast network of power lines, many through rural regions now at elevated wildfire risk. PG&E said that overhauling the Caribou-Palermo line has proven unexpectedly complex and that it is still planning to replace aging towers and hardware, some of which has been in use since the line began operating in 1921. It said delays in upgrading the line in recent years were due to engineering challenges, partly related to permitting in a federal forest.

The story of the Caribou-Palermo line is part of California’s wildfire reckoning. The state’s largest utility is now at the center of scrutiny after a series of deadly wildfires that have swept the company’s service territory in recent years. California fire investigators have determined the company’s equipment played a role in starting 18 blazes that killed 22 people in 2017.

This year, PG&E has accepted Chief Executive Geisha Williams’s resignation, moved to replace more than half its board, begun restructuring in anticipation of liabilities from hundreds of lawsuits and filed for bankruptcy protection.

It has vowed to do more to prevent its equipment from sparking fires and now plans to consider turning off power lines proactively during high-fire-risk periods in a wide swath of its territory.

PG&E spokeswoman Lynsey Paulo said: “PG&E has heard the calls for change and is committed to taking action by focusing our resources on reducing risk and improving safety throughout our system.”

The emerging picture of the transmission line’s problems could deepen the utility’s legal problems and threaten to add to its growing regulatory headaches. The failure to maintain the Caribou-Palermo line is part of a broader set of challenges the company faces in managing its operations. These include antiquated record-keeping systems that make it difficult to assess the safety and reliability of the aging power grid, according to regulators and regulatory filings.

PG&E has for years worked to digitize and fix errors and gaps in its records, but the work has been slow and remains incomplete. Until 2015, the company said in a state regulatory document, it used “paper wall maps and push pins” in control centers to track electricity-distribution system operations, which provide service over a 70,000-square-mile area to 16 million people.

The company said it is committed to keeping accurate records in accordance with state regulations and, since the Camp Fire, has doubled down on the effort by accelerating its pace of inspections. “Our focus is to leave no rock unturned, to ensure that we are continuing to reduce risk on our system every single day,” said Sumeet Singh, vice president of the company’s community wildfire-safety program.

PG&E plans to have completed enhanced inspections of transmission and distribution equipment in high-risk areas by May. As a result of those inspections, the company shut down more than a dozen transmission lines for immediate repair. The Caribou-Palermo is the only one that remains out of commission. It said it plans to use drones and increase the frequency of in-person investigations in the future.

The California Public Utilities Commission said it has opened a wide-ranging investigation into the Camp Fire’s cause, including PG&E’s past maintenance and spending. An agency spokeswoman declined to comment on the Caribou-Palermo line.

PG&E has previously reported the 115,000-volt Caribou-Palermo line malfunctioned on Nov. 8, some 13 minutes before the PG&E employee noticed a fire underneath it as he drove along a rural two-lane highway.

PG&E in 2013 told federal regulators it had planned maintenance work on the line because it sagged too close to the ground and vegetation. It planned to complete the work by February 2016. Instead, it delayed the $30.3 million project several times.

The company again scheduled work on the Caribou-Palermo line to begin last June, according to records it filed with the federal government. It delayed again. The line wends over hard-to-access ridges and across steep draws along the north fork of the Feather River, some towers perching on rocky outcrops.

PG&E said the tower that malfunctioned before the Camp Fire wasn’t slated for maintenance as part of the project proposed in 2013. It is currently reconsidering the work’s scope in light of December’s findings, which revealed problems with the line’s structural foundations and hardware supporting wires.

The Caribou-Palermo line has experienced a series of problems within the past decade after the expansion of nearby towns strained its capacity. Since 2016, population growth in Paradise and neighboring Chico has outpaced that of the state, boosting regional demand for electricity and exacerbating wildfire risk in an area hurt by drought.

PG&E spends enormous sums on transmission-line upkeep, costs passed to ratepayers. Some big customers have questioned whether it is spending prudently.

Randy Howard, general manager of the Northern California Power Agency, a collection of municipal utilities relying on PG&E’s lines to deliver power to customers, called the company’s annual budget for replacing transformers, towers and other equipment a “black box” with little oversight or accountability. The group challenged a 2017 PG&E federal tariff filing—its request for spending on behalf of the shared bulk-power-transmission system—arguing that it failed to justify why it needed transmission-rate increases to recoup its costs.

“They ask for the money, they get approval for it, they never have to demonstrate they actually did the work,” Mr. Howard said. “There isn’t transparency. There doesn’t seem to be an actual asset-management plan.”

PG&E’s Ms. Paulo said the company, as part of its spending requests, “has been forthcoming with information about our transmission asset management programs and the additions that have occurred year to year.”

Last year, PG&E filed to spend $1.96 billion annually on its transmission system, more than twice the $946 million request a decade earlier.

State regulators have expressed skepticism in filings with federal regulators about PG&E’s transmission spending. Lawyers for the California Public Utilities Commission argued in a federal filing last year PG&E had no effective way of ranking which projects were most necessary to ensure safe and reliable operations. An internal PG&E audit from 2013 found that the company focused mainly on spending its allotted budget, not ensuring expenditures were prudent and effective, and that it lacked performance data and other records for many projects.

Little had changed since then, regulators said last year in federal filings. They argued PG&E continued to build certain projects to meet budget targets and let others slip—in part because it lacked construction, maintenance and inspection records necessary to prioritize the work.

PG&E faces similar problems in tracking its electricity-distribution operations, an issue it acknowledged in regulatory filings after a 2010 natural-gas-pipeline explosion in San Bruno, Calif., that killed eight.

Part of its efforts to improve its record-keeping involved a sweeping inventory of its overhead and underground lines. Some records in its central database had, since the 1970s and 1980s, been missing information such as the make and age of switches, circuit breakers and voltage regulators—information the company said was critical in addressing system safety risk.

Regulators approved about $97 million for a records-system overhaul between 2014 and 2016. By the period’s end, the company in filings estimated it had spent only 15% of that on the effort because of technological challenges and used the rest for other projects.

PG&E is seeking additional funding to complete its distribution-line inventory and fix gaps in records, an undertaking it projected will continue through 2024.

“PG&E does understand that it has issues,” said Garrick Jones, a consultant who has examined the company’s record-keeping spending for the Utility Reform Network, a consumer advocacy group. “But its history of making promises and under-delivering makes one question whether they undertook the records program with all due haste.”

The long-distance transmission lines that run near Paradise, including the 56-mile Caribou-Palermo, are among America’s oldest, dating to the early 1920s when electricity was an urban luxury. They became part of a system tapping into Sierra Nevada dams and powerhouses known as the “Stairway of Power.” In the 1960s, the Caribou-Palermo line was in a relatively sparsely populated region.

In 2010, the California grid operator said the line would soon face “thermal overload”—a designation that means there’s too much power moving through it—as nearby communities expanded. It concluded: “There is more than ample time to schedule implementation by 2018.”

PG&E undertook sporadic repair work on the lines near Paradise. Near Camp Creek, the remote waterway that gave the fire its name, it’s possible to see under towers a few replaced disc-shaped insulators and metal anchors—evidence of small-scale repairs over the past few years.

Xela Young, 37, has lived her whole life in Yankee Hill, a few miles from Paradise. PG&E transmission lines cut through her community. A year or two before the Camp Fire, she said, she saw PG&E workers planning for clearing vegetation or doing maintenance.

“The same frickin’ tree got marked three times, but was never cleared,” she said. “It seemed like they did a lot of preparation, but not a lot of follow-through.”

In December 2012, a storm blew through and five towers on the Caribou-Palermo collapsed. PG&E erected temporary wooden towers and devised a $2.9 million plan to replace them.

In 2013, when it filed an annual transmission tariff with federal regulators, it unveiled a broader plan to overhaul the Caribou-Palermo line by 2017. In January 2017, wind blew trees into the line, causing a fault that shut down a powerhouse. The company cleared trees and resumed service, but it took six days to restore the powerhouse, PG&E documents show.

In July 2017, PG&E’s federal filing again included overhauling the line. More than one in four wire spans between towers were too close to vegetation, the filing said. The plan involved swapping 61 lattice towers with modern tubular-steel poles, and replacing wire and hardware connecting it to the towers. It never began the work.

California’s public utilities commission prioritized rates, green power; wildfires exposed shortcomings

By Katherine Blunt and Russell Gold

In 2015, the California regulator overseeing PG&E Corp. opened an inquiry into whether the state’s largest utility put enough priority on safety.

Since then, a federal jury has found PG&E guilty of violating safety regulations for natural-gas pipelines and a federal judge later placed it on criminal probation. Its electrical equipment has sparked more than a fire a day on average since 2014—more than 400 last year—including wildfires that killed more than 100 people. It filed for bankruptcy protection this year, citing $30 billion in fire-related liabilities, and started blacking out millions of customers to try to avoid sparking blazes during strong winds. On Friday, it agreed to pay $13.5 billion to wildfire victims in a settlement deal.

The regulator, meanwhile, is still investigating.

PG&E’s collapse has exposed the California Public Utilities Commission’s failure to hold the utility accountable on safety. The CPUC for years focused attention elsewhere, on setting rates and pushing for cleaner power.

Now, the agency tasked with regulating utility safety is struggling to refocus on the issue while also grappling with its failure to prevent the state’s second electricity crisis in two decades.

“The PUC is reactive,” says Janice Grau, a retired administrative law judge for the commission. Of the weather patterns that led to deadly power-line failures and blackouts, she says: “There wasn’t anyone at the PUC who had the idea to look at the Diablo Winds and say that maybe this is going to get worse.”

Behind the CPUC’s failure to ensure a safe PG&E lie a number of political mandates from California’s leadership, skimpy financial and personnel resources for safety, and an internal culture that ceded much safety oversight to the utilities themselves, say former commissioners, academics and industry experts.

The commission’s detractors say it has been excessively cozy with PG&E and the other companies it is supposed to regulate, with a revolving door of staffers shuttling between the regulator and utilities. The companies, meanwhile, have long been among the biggest political players in Sacramento, showering money on Democrats and Republicans alike and helping write the state laws that are meant to govern their behavior.

Utility commissioners, appointed by California’s governors, have focused much of the past two decades on implementing politicians’ increasingly ambitious goals to reduce the state’s carbon footprint by requiring utilities to buy more wind and solar power.

Those efforts were largely successful in pushing the utilities toward renewable power, turning California into a green-energy leader. But now, as state fire officials link outdated PG&E and Southern California Edison equipment to an increasing number of destructive fires, the CPUC faces criticism it should also have prepared the state for the rising wildfire threat.

In 2013, a consultant interviewed CPUC staff about the agency’s safety-enforcement efforts and issued a report concluding the safety division received less money and staffing than others focused on delivering green energy and setting rates.

The report stated: “There has been little attention and limited resources directed toward reliability, and even fewer toward safety, by the Legislature and the Commissioners.”

Several of its safety auditors and other staffers have moved into roles at PG&E and other utilities in recent years to oversee the functions they were once charged with regulating.

Earlier this year, U.S. District Judge William Alsup, who is overseeing PG&E’s federal probation stemming from the 2010 natural-gas-pipeline explosion that killed eight people in San Bruno, Calif., criticized the commission’s staff as they testified before him on the company’s safety practices. “It’s a revolving door with PG&E over there,” he said. He later apologized to the staffers.

“Criticism of the CPUC being too close to the utilities it regulates is not reflective of current CPUC leadership,” a commission spokeswoman said, adding that “the CPUC overhauled how all investor-owned utilities identify, prioritize, and mitigate safety risks.” PG&E declined to comment.

California Gov. Gavin Newsom recently appointed a new commission president, Marybel Batjer, a former casino executive and veteran California bureaucrat who held top jobs with the state’s prior Democratic and Republican governors, and gave her the task of overhauling the regulator. He has threatened a state takeover of the utility. Ms. Batjer has criticized PG&E for its handling of recent blackouts, telling Chief Executive Bill Johnson it was “an unacceptable situation that should never be repeated,” and she has signaled the need for better safety regulation.

Ms. Batjer says the CPUC, as part of the continuing safety probe, is considering going beyond fines in sanctioning PG&E, perhaps by targeting executive compensation or the board’s makeup. She notes that safety problems have persisted within the company, even after the agency fined it $1.6 billion for the San Bruno explosion, which destroyed a neighborhood near San Francisco.

“I’m not sure that changed their behavior,” she says, “or their corporate culture.”

Green focus

The 1,200-employee CPUC, whose roots trace to 19th-century efforts to check railroad tycoons’ power, is the nation’s largest state-utility commission. The next largest, Virginia’s, has about 625 employees to regulate utilities and other industries, according to the National Association of Regulatory Utility Commissioners. California’s commission oversees a range of industries, including telecommunications and ride-sharing companies like Uber Technologies Inc.

From the early 2000s, the commission’s focus was on setting rates and implementing Sacramento’s renewable-energy goals. Starting in 2002, three consecutive governors, two Democrats and a Republican, signed bills ratcheting up the percentage of wind and solar power utilities had to buy.

These mandates required investor-owned utilities such as PG&E to change their mix of generation, effectively phasing out burning coal and lowering reliance on natural gas while signing contracts to buy electricity from new solar and wind farms. The CPUC oversaw these deals, as well as figuring out how to integrate thousands of new rooftop solar installations.

“Was there a considerable amount of resources placed on policy? Yeah, there was,” says Timothy Alan Simon, a commissioner between 2007 and 2012 and now a utilities consultant. “It’s a challenge to balance between the safety aspects and the need for policy deliberation.”

Michael Peevey, a former Southern California Edison president, and CPUC president between 2002 and 2014, was a vocal champion of renewable-energy policies. Now retired, he says the regulator was large enough to focus on safety and renewables simultaneously but that it was tough to get Sacramento lawmakers excited about funding safety.

When compared with eliminating coal and adding solar energy, he says, “Safety is not a glamorous thing.”

PG&E was among nine corporations that made the maximum $58,400 contribution to Democratic Gov. Newsom’s 2018 campaign. It was a major contributor to the gubernatorial campaigns of Democrat Jerry Brown and Republican Arnold Schwarzenegger before him.

The company reported in a federal court filing earlier this year that it made $5.3 million in contributions to candidates, political parties and political-action committees in 2017 and 2018. The top recipients were the state’s Republican and Democratic parties, which each received more than $400,000, according to campaign-finance records.

While PG&E remains among the state’s top political donors, its role in the wildfires has eroded that clout despite its support of the governor and other key lawmakers.

Struggle for resources

The commission’s budget for regulating utilities was roughly $200 million in the 2018-19 fiscal year, up from $98.5 million in the 2015-16 year, a budget that funds all activities related to the oversight of utility companies, including inspections, rate-setting, auditing, writing reports, doing investigations and other bureaucratic tasks—but that budget doesn’t fund its regulation of other industries. The CPUC has historically struggled to find sufficient resources to conduct safety inspections and investigations, despite a long string of California utility disasters that have suggested the need for closer oversight.

“There ought to be a team of safety experts living in an office in PG&E’s headquarters with access to all employees and records, looking at what they are doing and asking hard questions,” says Steve Weissman, who spent 30 years at the commission as an administrative law judge and a top adviser to commissioners, and is now a lecturer at the University of California, Berkeley’s public-policy school. “But that has not been the approach that they have taken.”

The CPUC began probing its own safety culture after the 2010 San Bruno explosion. At the time, its safety and enforcement division had about 30 employees, less than a third of the number today. They focused on conducting record audits and did little to determine whether the utilities had adequate maintenance and inspection procedures.

After the explosion, the division created a new seven-person team to assess risk and push the utilities to be more forthcoming when they discovered problems. Arthur O’Donnell, who began supervising the team in 2015, says it was down to three engineers when he took over and lacked the money to ramp back up quickly. By the time he retired late last year, he says, it had added six positions and become more sophisticated in its approach.

The commission has for years labored to fill vacancies. Mr. Peevey, the former commission president, says agency jobs often pay less than similar jobs elsewhere in the industry. “We’d attract very bright people,” he says, “and they work three or four years and then leave to make more money and have less bureaucracy.”

Inside the CPUC was a culture that felt it had to pick its battles, says Mark Ferron, a commissioner between 2011 and 2014. Not long after the San Bruno explosion, the PG&E waited months to tell the regulator about potentially similar problems with another pipeline.

Mr. Ferron, now retired, says he wanted to launch an investigation to obtain company emails but was told by staff that PG&E would fight the effort in court for years, taxing agency resources. He relented, he says, and agreed to support fining PG&E $14.4 million for “delay and obfuscation.”

Lawyers for San Bruno, who were suing PG&E following the explosion, uncovered evidence commissioners had engaged in back-channel communications with PG&E executives, which was supposed to be banned under the commission’s rules. Thousands of emails were made public that raised questions about whether the CPUC was too cozy with PG&E.

After an investigation, the commission last year fined PG&E, which admitted wrongdoing, $97.5 million for improper communications with its own officials.

Among those involved was Mr. Peevey. Four months before San Bruno, the commission’s then-president had invited a PG&E executive to his house for dinner. “No matter the menu,” he wrote, “we have some great bottles of Pinot to drink.”

Mr. Peevey says he extended the invitation upon running into the executive at a grocery store near his home. They discussed the company’s politically unpopular effort to push a failed ballot initiative that would have made it harder for local governments to form electricity-buying authorities, he says, calling the meeting “pretty innocent.”

At the end of 2014, then Gov. Brown appointed Michael Picker to succeed Mr. Peevey as president. Shortly thereafter, the commission fined PG&E $1.6 billion for negligence in record-keeping and other problems that led to San Bruno, the largest penalty ever levied against a utility in the state.

Mr. Picker pressed the agency to consider going beyond imposing fines to hold utility executives accountable for operating safely. He opened the 2015 investigation into PG&E’s safety culture and pushed to strengthen the commission’s approach to safety regulation. He declined to comment.

Last month, Mr. Picker expressed frustration that the CPUC was tasked with enforcing safety in addition to overseeing rates, which he saw as the regulator’s main mandate. “Utility commissions across the country were designed for one purpose, but now are expected [to] tackle everything,” he wrote on Twitter.

Diablo Winds

Even as the CPUC tried to increase oversight of PG&E, wildfire risk was spreading from Southern to Northern California. That heightened the chance PG&E equipment could spark fires when warm gusts known as Diablo Winds swept across its 70,000-square-mile service territory.

In 2012, the regulator had launched an effort to map high-threat fire areas throughout the state, but the maps weren’t completed until the end of 2017. By that time, a wave of wildfires in the state’s wine country had killed 44 people and burned more than 6,600 homes. State fire investigators later determined that 18 of the fires, responsible for half the deaths, were started by PG&E equipment; the company concurred.

As part of the 2015 probe into PG&E’s safety culture, a consultant produced a report in May 2017 that spelled out the utility’s failings and made recommendations that involved increasing field training and supervision, hiring leaders with stronger safety qualifications and improving risk analyses.

The commission spent more than a year evaluating the report, and it didn’t vote to adopt the recommendations until last November, after the Camp Fire killed 85 people and destroyed the town of Paradise in the Sierra Nevada foothills. State fire investigators later linked the fire to PG&E equipment, a conclusion with which PG&E concurred.

In December, Mr. Picker formally opened a new phase of the investigation. The commission is now considering a number of proposals to restructure the company, including separating its gas and electric businesses, making it a publicly owned utility or tying shareholder returns to safety performance.

Elizaveta Malashenko, head of the CPUC’s safety division, says the agency has expanded its ability to investigate and litigate utility failures. This month, her division released a report citing PG&E for regulatory violations related to the transmission-line maintenance, including the one that ignited the Camp Fire.

The agency remains constrained in its ability to inspect the vast expanse of utility infrastructure throughout the state due to the size of its workforce and budget, she says. This year, lawmakers gave Ms. Malashenko approval to hire more electric inspectors. She says it has been a challenge to find qualified inspectors, most of whom have been hired by PG&E and other utilities.

She says she hopes to be able to use technology, including drones, to expand the agency’s inspection capabilities. “We need to be looking at this a little more creatively than just sending out people to duplicate the workforce of the utilities,” she says.

State lawmakers voted in July to create a Wildfire Safety Division in the CPUC, where it will begin examining investor-owned utilities. In 2021, it will be moved to the state’s Natural Resources Agency to ensure it has oversight over municipal utilities as well.

The CPUC earlier last month opened a new investigation, its seventh, into PG&E. This one will examine whether PG&E and other utilities put enough priority on safety during large-scale blackouts.

Gov. Newsom and regulators criticized PG&E for the shut-offs in October, but the company was operating within the rules. After a deadly fire near San Diego in 2007 involving a different utility, the commission approved plans to let utilities pre-emptively turn off power during windy and dry periods to reduce the risk that equipment would spark fires.

Only last year, however, did it opened a proceeding to look at how and when utilities decided to shut off power. That proceeding is continuing.

Ms. Batjer, the new commission president, says the CPUC is examining ways to make its investigation and rule-making procedures faster and more efficient. “We do and should, at all times, apply due process,” she says. “Due process takes time.”

The utility has sparked deadly fires and pipeline explosions, left millions of Californians in the dark and gone bankrupt twice in less than 15 years. Here’s what went wrong.

By Russell Gold, Rebecca Smith and Katherine Blunt

PG&E Corp. Chief Executive Tony Earley liked the idea the minute he heard it. He would change the signature line on company emails—“PG&E is committed to protecting our customers’ privacy”— to promote safety instead.

Six months after a top state regulator suggested it, nothing had happened.

“We have one more level of governance to go through before we can change,” Jack Hagan, the regulator, recalled Mr. Earley saying.

“I said, ‘You’ve got to be kidding me.’ He couldn’t get it done.”

For the past 15 years, PG&E has plotted a round trip from one bankruptcy to another. In between, it navigated the aftermath of a catastrophic natural-gas pipeline explosion and a series of increasingly demanding green-energy mandates from state regulators.

Managing that push and pull would have challenged any company. It proved to be especially challenging for a plodding utility undergoing management upheaval, heavily regulated and saddled with aging, neglected equipment.

Executives were so focused on the past and the future that the present sneaked up on them. PG&E’s electric lines, after years of deferred maintenance, were threatening drought-parched California. When the Camp Fire started to burn in late 2018, eventually killing 85 people, it was the first of four fires that PG&E reported it sparked that day. It was its 408th of 2018, and the 1,961st since record-keeping started in mid-2014.

Thousands of pages of documents and scores of interviews show Mr. Earley, like the CEO before him and the one who followed him, struggled to steer the ship. One tried to reimagine the company. When that failed, the next one labored to return to the basics of safely delivering power. The last was left to face the consequences.

“We acknowledge that we’ve fallen short in the past, too many times with tragic consequences,” PG&E said in a written statement, adding that it has made many needed changes in personnel and practices. “We know we have much more work to do to meet the challenge of safely providing electric service in a changed and changing climate.”

EVERYTHING ABOUT PETER DARBEE suggested the very model of a modern chief executive. His pedigree: Dartmouth, Goldman Sachs and Pacific Bell. His grooming: crisp dress shirts, rimless glasses and sandy hair combed just so. His speech: deliberate, calm and laced with management theories.

He had been at the company for a little more than five years when he was elevated in January 2005 from chief financial officer to CEO. He vowed to remake a company that traces its roots to the gasworks that lighted San Francisco after the Gold Rush into the very model of a modern utility.

The company’s electric-and-gas unit had emerged from chapter 11 bankruptcy protection 10 months before. Pacific Gas & Electric was the most prominent casualty of a 1996 California law that was designed to increase competition but had instead allowed wholesale energy prices to spike and blackouts to roll through the state.

Expectations for utilities were changing as PG&E emerged from bankruptcy. Utility shares had been seen as widows-and-orphans stocks, delivering safe, unspectacular returns. Investor appetite for larger returns was soon whetted by the success of TXU Corp., a Texas company that embarked on a turnaround and quickly boosted earnings and dividends.

A month into the job, Mr. Darbee flew to New York City to meet investors at the St. Regis Hotel to explain his vision for the company. He would modernize the way it did its work, reap savings and pour them back into new power plants and wires, driving growth and allowing PG&E to reinstate dividends without raising rates.

Two months later, he restored PG&E’s dividend and then raised it 10% to 33 cents a share by year’s end. The share price, $35.51 when Mr. Darbee met with investors, closed out the year up 5% to $37.12.

In 2006, he promised to increase earnings per share by at least 7.5% a year for the next five years—roughly twice that of many of PG&E’s peers. During that time, he raised the dividend by another 36 percent to 45 cents a share.

He told investors that his goal was to become “the leading utility in the United States.” That involved having “delighted customers/energized employees/rewarded shareholders.” Some executives found the word “delighted” ironic, given the company’s problems keeping the lights on during the electricity crisis.

To enshrine his vision, Mr. Darbee hung a plaque in the boardroom titled “Expectations of Our Leaders.” It outlined 17 objectives. One said leaders should “protect both public and employee safety as the first order of business.”

Executives were asked to sign a statement saying they understood that the company’s No. 1 goal was transformation. Mr. Darbee’s relationship with the utility’s top executives was fraught, though. Some found him arrogant and controlling. For his part, Mr. Darbee was unimpressed with them.

“When I came to PG&E, many officers had been there 20 years. I didn’t feel they were up to industrial, competitive standards,” he said recently. “I replaced them and went up the ladder, continuously replacing people.”

Mr. Darbee estimated he removed 40 to 42 officers—more than 100% turnover—during his six years as CEO. Replacements often came from Wall Street, telecommunications or utilities he regarded as more advanced.

There was a cost, though, said Gordon Smith, who retired as president of the company’s Pacific Gas & Electric unit in 2005. “Those were many of the people who made the company work.”

Mr. Darbee’s “Business Transformation” initiative soon involved hundreds of employees from Accenture, the global business consulting firm. They targeted more than 50 work processes and field offices to consolidate operations.

Accenture pressed the company to “turn up the dial” on outsourcing jobs, according to documents reviewed by The Wall Street Journal, including relying more heavily on contractors for pipeline construction, gas-leak detection and damage prevention—programs later investigated by state regulators for rules violations.

Mr. Darbee’s plans relied heavily on new computer software systems. A priority was to reduce the wait for electric and gas hookups, but when the new process went live in late 2006, the wait grew.

The company’s unions were angry. Workers complained Accenture’s new software systems were overly complex and they didn’t receive enough training. The result: When the software was switched on, many work orders disappeared and no one knew where they went. Customers weren’t delighted.

Greg Dart, owner of an electrical contracting company in Stockton, wrote to the California Public Utilities Commission, which regulates gas-and-electric providers, in late 2007. He said a new application process required that he submit “$10,000 worth of documentation” for jobs that were only worth a few thousand dollars to him.

He begged the commission to “impose some sanity.” He never got a reply.

EVEN AS IT STRUGGLED, PG&E was becoming a global leader in buying solar and wind energy.

In May 2007, Vanity Fair photographed Mr. Darbee on a bluff overlooking the Golden Gate Bridge alongside activists, artists and other climate-change crusaders.

“It might seem strange to have the chief executive of a big utility in these pages, but here is Peter A. Darbee of San Francisco,” the caption read. “Unlike others who sit at the controls of power plants, Darbee believes global warming is indeed a serious threat.”

The state’s politicians and regulators gave PG&E little choice but to change. Michael Peevey, the head of the utilities commission under three governors, was the point man for implementing California’s goals to deepen its commitment to renewable energy. A former president of Southern California Edison, Mr. Peevey got the state’s three largest investor-owned utilities on board, bolstering the growth of solar power and helping drive down prices.

By 2009, PG&E signed contracts for construction of more than double the solar power that existed in the U.S. at the time.

As regulators pushed for more renewable energy, the combination of high winds and sparks from a damaged San Diego Gas & Electric power line ignited what came to be called the Witch Fire in Southern California, killing two people, injuring 45 firefighters and destroying 1,140 homes.

San Diego Gas & Electric faced hundreds of millions of dollars in potential liability. It also needed to spend heavily to make its grid safer. The company asked regulators for permission to recoup some of the liability costs by passing them on to customers.

It would take state regulators more than a decade to provide a final answer, with crucial consequences for PG&E.

BY DECEMBER 2007, Mr. Darbee’s Business Transformation wasn’t producing the savings that he had hoped to reinvest in the company. PG&E announced its earnings would fall short of analysts’ expectations in the fourth quarter of 2007 and said it expected future savings to be as much as $285 million less than forecast.

Utility executives notified employees that PG&E was scaling back its relationship with Accenture. Accenture charged PG&E more than $300 million, Mr. Darbee recalled recently, but the company was so dissatisfied that it wrangled a roughly 10% reduction.

Accenture said it couldn't comment due to contractual restrictions. People with knowledge of its work said it was frustrated by turnover in PG&E management. They said PG&E also balked at some recommendations—such as cutting 8,000 employees and contractors—over concerns it would spark a war with unions.

PG&E didn’t officially pull the plug on the transformation until 2009. Although it had made small improvements, such as centralizing purchasing, it did nothing to address deficiencies that would become glaring in the next few years: aging equipment, shoddy inspections and flawed maps and records, many still kept on paper.

“The initiative was too theoretical to implement in a practical way,” PG&E said in a report to regulators.

The next summer the company squandered much of the rest of its political capital. Under Mr. Darbee’s direction, PG&E funded a ballot initiative in June 2010 that aimed to make it harder for local governments to sidestep the utility by forming local electricity-buying authorities. Mr. Darbee worried they would “take over our business.”

Virtually the entire political establishment opposed Proposition 16. Other utilities wouldn’t back it. Environmentalists who had cheered PG&E over green power lined up against it. Voters shot Proposition 16 down.

Mr. Peevey, the utility commission head at the time, said in an interview that the effort displayed the “incredible arrogance of a company that’s been around for a hundred years” and was “pretty much used to getting their way.”

Mr. Darbee said it was a “bumpy and difficult road” to modernize a company that had spent too many years spending too little. He felt it had made solid progress by decade’s end with a much cleaner energy supply and more spending on technology. “It was like trying to change the direction of a huge, oceangoing tanker,” he said.

Still, PG&E was six years out of bankruptcy, and its fresh start was long gone.

Investors failed to see the annual 7.5% increases in earnings per share Mr. Darbee had promised from 2006 to 2010. PG&E delivered an average of 3.6% during that time.

Homeowners accustomed to steady bills saw their rates rise an inflation-adjusted 9% from 2004 to 2010, to 15.8 cents per kilowatt-hour.

It had been a lost decade, but the closing months of 2010 held the cruelest blow for the company and its customers.

AT DINNERTIME on Sept. 9, 2010, a PG&E natural-gas pipeline underneath the San Francisco suburb of San Bruno ruptured, allowing a torrent of gas to whoosh from the pipe and ignite an inferno.

The explosion turned a 3,000-pound piece of steel pipe into a projectile.

The pipeline, large enough for an adult to crawl through, spewed gas for more than an hour and a half as PG&E tried to figure out how to shut it down.

The blast killed eight people and injured dozens. It leveled 38 homes and damaged 70.

Two days later, hundreds of people—some in bandages, many still shaken—crowded into the blond-wood pews of St. Robert’s Catholic Church, seeking answers from PG&E. Mr. Darbee didn’t appear.

Instead, Geisha Williams, an executive recruited from a Florida utility to oversee energy delivery, approached the microphone set up in the center aisle. As sunlight streamed through stained glass, Ms. Williams faced down jeers and profanity, explaining that PG&E didn’t know why the pipeline had exploded.

“We know our customers are extremely nervous, and who wouldn’t be?” she said.

The National Transportation Safety Board traced the cause of the explosion to 1956, when the pipe had been laid with shoddy welds. The board concluded that PG&E failed for decades to detect the problem and properly inspect and maintain its pipelines. It also blamed the utilities commission for ineffective oversight.

Pressed to determine whether other pipes had similar problems, PG&E acknowledged that its records were a mess. It took over the Cow Palace, a 250,000-square-foot arena south of San Francisco, to spread out thousands of boxes of documents and organize them.

In April 2011, seven months after the San Bruno explosion, California’s new governor, Jerry Brown, signed legislation raising the percentage of state electricity that must come from renewables to 33% by 2020, up from the previous state goal of 20% by 2010.

An independent panel later found that commissioners had been too focused on turning the state into a leader on climate change and renewable energy to focus on safety or compliance.

PG&E announced a management shake-up that April meant to atone for San Bruno. Two executives departed, and a few weeks later, Ms. Williams was promoted to run electric operations.

“Who is Geisha?” Mr. Peevey wrote in an email to Brian Cherry, PG&E’s vice president of regulatory affairs. Mr. Cherry replied that she had joined PG&E about four years earlier from Florida Power & Light with a background in electric-transmission operations.

“Sounds like a classic reshuffling of the deck chairs,” Mr. Peevey responded.

Mr. Darbee’s chair was empty by the end of that month.

Amid growing calls for his resignation over the Proposition 16 debacle and the San Bruno blast, Mr. Darbee said he had offered to resign in a few months.

Board Chairman C. Lee Cox asked that he leave sooner, and Mr. Darbee left at the end of April with a $34.8 million retirement package. Not long after, the “Expectations of Our Leaders” plaque was gone, too.

PETER DARBEE’S SUCCESSOR was nothing like Peter Darbee. Anthony F. Earley Jr., a utility veteran who had most recently been CEO of Michigan’s DTE Energy Co., wasn’t a flashy visionary.

A graduate of Notre Dame and a veteran of the Navy’s nuclear submarine service, Tony Earley had a self-effacing, easygoing manner designed to cultivate allies rather than intimidate. Favoring dark suits and casually combed hair, he talked about “servant leadership,” asking his top managers how he could help.

Mr. Earley had a reputation for getting utilities to operate well and for smoothing ruffled feathers with regulators and lawmakers. His first instinct was to steer clear of PG&E, but he reconsidered.

“I think I know what needs to be done,” he said in a news conference introducing him as the first outsider to lead the company. DTE had underinvested in infrastructure and strained relations with regulators but righted itself. He believed the same tonic could cure PG&E.

Mr. Earley called it “back to basics.” He promised to mend fences the way he had in Michigan and pledged to spend $400 million over two years to accelerate repairs and improvements of the company’s gas and electric systems.

The money would come from corporate profits, not higher rates. Analysts trimmed PG&E earnings forecasts three months after Mr. Earley’s arrival. PG&E’s shares fell 3.5% to $40.86.

PG&E traditionally had spent $5 to maintain its far bigger electrical transmission and distribution system for every dollar it spent maintaining its gas network each year. The furor over the San Bruno explosion skewed spending toward gas.

In 2011, the company spent $237.8 million to maintain its gas network, more than twice the amount in 2010, according to federal filings. That spending kept rising, hitting $658.3 million in 2016, when it topped the spending on electric upkeep by $60 million.

The figures don’t capture the full extent of gas and electric spending, which also included multibillion-dollar investments to upgrade or replace parts of the network.

“We need to be brutally honest about where we are,” Mr. Earley said three months after he became CEO. “Right now, we need to be humbled because we have a lot to be humble about.” He repeated a warning to employees: “We cannot afford to have any significant operational issues.”

A week later, a PG&E wire failed, plunging a nationally televised Monday Night Football game into darkness.

“We are snakebit,” Mr. Cherry, PG&E’s head of regulatory affairs, wrote in an email to a utility commissioner.

Still smarting from the San Bruno disaster, the company brought in Lloyd’s Register, the venerable British risk-management consultant, in 2012 to evaluate its gas operations. It found that the utility had fallen far behind peers in modernizing pipeline records and using state-of-the-art methods to monitor operations.

Nick Stavropoulos, executive vice president in charge of gas operations, said he suggested to colleagues that Lloyd’s could do a similar assessment of the electric operation. The response: Not necessary.

The electric system, they thought, was in good shape, and getting better. By 2014, spending to maintain transmission and distribution lines had risen 55% in the decade since PG&E emerged from bankruptcy. The company was making substantial investments in upgrading or replacing aging electric infrastructure, spending millions more to improve the safety and reliability of the grid.

Jim Hall, a retired chairman of the National Transportation Safety Board whom PG&E hired in late 2011 to help improve gas safety, said he also offered to look at the electric side, after finding “obvious deficiencies in their safety culture.” The company declined.

“What was curious to me,” he said, “is they did not extend that interest in improvement to the whole company.”

CALIFORNIA REGULATORS kept up the pressure to meet the state’s aggressive renewable energy goals.

By 2012, PG&E was spending more than $1.2 billion a year to meet the targets, more than double what it spent in 2003, according to PG&E filings, and it was projected to top $2 billion by 2015. Mr. Peevey, the utilities commission head, addressed concern that Californians faced a “rate bomb” as the deals kicked in.

“There is no free lunch here,” he told state senators, explaining that the contracts, though expensive, were making California an energy leader, and costs for future projects would fall.

By 2015, the state found PG&E was paying an average of 12 cents a kilowatt hour for renewable electricity. Four years earlier, it paid less than 8 cents.

Adjusting for inflation, that helped drive residential customers’ overall electric rates 14% higher than a decade earlier.

There was also a more immediate and deadly threat. California has long been prone to punishing dry spells. The one that overtook the state in 2011 was unusually strong.

Lack of water stressed the trees, causing them to produce less of the gooey pitch that fends off invasive bark beetles. The beetles, as small as a grain of rice, burrowed in, feasting on the trees’ nutrients. As the trees died under assault from drought and pest, their needles turned red and combustible.

Regulators didn’t see immediate cause for concern. In 2012, they ordered Southern California utilities to prepare fire-prevention plans. PG&E didn’t have to.

“Northern California does not experience Santa Ana winds that contribute significantly to the risk of catastrophic power‑line fires in Southern California,” the commission said.

PG&E depended largely on reliability data to gauge the health of its electrical system, and it appeared in good shape. Outages were shorter each year, in part because the company had been installing technology to automatically restart power after momentary faults. PG&E warned regulators, though, that its aging equipment was breaking down more frequently.

Because reliability statistics took into account the number of customers affected by outages, PG&E focused much of its effort on maintaining its urban and suburban lines. It paid less attention to thousands of miles of lines, some predating World War II, that stretched deep into the Sierra Nevada and crisscrossed forests.

By 2014, the drought had turned large parts of Northern California into kindling. Gov. Brown declared a state of emergency that January. In May, forest officials convened a drought task force to deal with dying trees.

State regulators required PG&E to begin reporting how many fires were started by its equipment. The numbers garnered little attention, but they were eye-popping in retrospect: PG&E equipment was starting more than one fire a day.

In the final seven months of 2014, its equipment ignited 254. In 2015, PG&E started 435. Most were small and quickly extinguished, but as conditions dried more, the threat of conflagration grew.

Despite being told by the state to “take all practicable measures,” PG&E spent just $26.2 million on emergency drought response measures in 2014 and $35 million the next year. That increased to $254 million in 2016.

By then, though, more than 100 million trees in California were dead and ready to burn. And PG&E, trapped between crises old and new, was in no position to stop it.

JUST AS THE MAGNITUDE of the drought was coming into focus, any hopes Mr. Earley had of putting the San Bruno fireball behind PG&E were dashed.

Federal prosecutors filed criminal charges against the company in April 2014 for “knowingly and willfully” failing to maintain gas pipeline records and relying on inaccurate maps to make decisions.

State regulators dropped the hammer a year later, levying a record $1.6 billion in penalties against PG&E for 2,425 safety violations and demanding the utility return $635 million to customers for pipeline improvements it never completed or mismanaged.

On a 102-degree day in September 2015, winds blew a tree into a 12,000-volt PG&E electric line southeast of Sacramento, setting ablaze the dry grass underneath. In a bitter twist, the state later found that the tree had become vulnerable because a PG&E contractor had cut down two others nearby. What came to be known as the Butte Fire burned 70,868 acres, destroying 549 homes and killing two people.

“The problem is going to get much worse before it gets better,” David Shew, the head of risk analysis for California Department of Forestry and Fire Protection, said.

In summer 2016, a federal jury found PG&E guilty in the San Bruno blast. The judge put the company on probation for five years and assigned a monitor.

Mr. Earley wouldn’t be there to see it through. The board announced that fall that he was out as CEO.

In his final year, PG&E’s average cost of electricity for residential customers had risen an inflation-adjusted 10% to 20 cents per kilowatt hour, among the most expensive of any large utility in the country.

Mr. Earley, who had touted his practical-minded, back-to-basics approach, returned to Detroit, never having tamed PG&E.

“We are coming back to Michigan when this adventure is over,” he had promised the Detroit Economic Club two years earlier. “One of the reasons is someone once summed up San Francisco absolutely perfectly. They described the city as 49 square miles surrounded by reality.”

PG&E HAD TRIED Mr. Darbee’s gospel of change and Mr. Earley’s catechism of simplicity. Neither worked. Now, it was Geisha Williams’s turn.

When elevated from head of PG&E’s electrical operations in March 2017, Ms. Williams became the first Latina to run a Fortune 500 company.

She came to America at age 5, speaking no English, after her mother and father, a political prisoner, emigrated from Cuba in 1967. She grew up working as a cashier in her family’s grocery, becoming the first in her family to graduate from college. She started at Florida Power & Light as a summer job while studying engineering at the University of Miami.

Former colleagues said she was adept at politics, both inside and outside the company. She had demonstrated that aplomb in facing down the hostile crowd at St. Robert’s after the San Bruno explosion.

This time it was investors who were wary. With rates rising, Ms. Williams said the company would focus on affordability, in part by attempting to make operations leaner and more efficient. One of her first steps was to announce PG&E would cut about 1,200 employees and contractors.

The affordability campaign, like many of her predecessor’s initiatives, was soon overtaken by events. A month-long siege of fires turned swaths of California wine country into moonscapes that October. More than 6,600 homes burned, and 44 people died.

State investigators later determined 18 of the fires, responsible for half of the deaths, were started by PG&E equipment.

With fires still burning, Ms. Williams went to PG&E’s base in a hayfield on the outskirts of the Sonoma County town of Rohnert Park. More than a dozen tents were pitched on either side of a two-lane road, housing a kitchen to feed more than 2,000 workers, a laundry and a truck repair shop. Smoke was everywhere.

The destruction she witnessed rattled her.

“I’ve seen firsthand the destruction that hurricane force winds can bring to a community,” she said on an earnings call days later, “but this was like nothing I’ve ever seen.”

Then she explained the financial implications. A California constitutional provision known as inverse condemnation let residents and business owners seek compensation from utilities if their equipment damaged property.

“Even if a utility has followed all the rules and, in essence, has not done anything wrong,” Ms. Williams said.

The next month, 10 years after the Witch Fire near San Diego first raised the specter of devastating wildfire liability for utilities, the utilities commission ruled on whether San Diego Gas & Electric could pass $379 million in costs to customers.

The commission denied the request, saying the utility had failed to operate its electric system in a prudent manner—a precedent with devastating implications for PG&E. It wasn’t long before PG&E announced it was suspending its dividend to conserve cash. Its shares fell 13% to $44.50.

PG&E operated thousands of miles of lines in fire-prone areas. It couldn’t get enough insurance to protect itself. Getting a fix in the Legislature would be tough. The company was a convicted criminal on probation.

While its service area burned, PG&E’s residential electricity rates averaged 21 cents a kilowatt hour in 2017, rising to 22 cents the next year. Only New York’s Consolidated Edison and San Diego Gas & Electric charged more among the nation’s largest utilities.

In September 2018, Gov. Brown, months from leaving office, signed a bill that again raised the state’s renewable-energy target, this time to 60% by 2030. Ms. Williams said PG&E was again willing to help, but with one caveat.

“We will require access to affordable capital in order to help the state meet these bold targets,” she explained in a call with investors, saying that would be difficult unless state lawmakers or the courts removed the threat of inverse condemnation.

THAT NOVEMBER, ill winds returned to Northern California. Fire, death and bankruptcy soon followed.

PG&E’s Caribou-Palermo transmission line was built in 1921 through the Plumas National Forest. Part of a larger network that carried electricity from the Sierra Nevada to the Bay Area, it was so old that it had been considered a candidate for the National Register of Historic Places. PG&E had told federal regulators it planned to replace many of the towers and hardware on the line but postponed the work several times.

PG&E assigned the line a low risk score, pushing it down the priority list for improvement. An electric division employee told a colleague in a 2014 email that if a structure failed, “it will be likely due to heavy rain and no wildfires are possible then.”

At about 6:15 a.m. on Nov. 8, 2018, an iron hook holding up a 115,000-volt line broke, dropping the live wire and sparking a blaze.

Thirty minutes later, what would come to be known as the Camp Fire was out of control. Officials ordered the evacuation of the nearby town of Paradise, home to 26,000 people. The town was soon burned to the ground. Within hours, the fire destroyed 13,983 homes and killed more people, 85, than any other California wildfire.

“There are no words to describe the unspeakable tragedy and loss of life,” Ms. Williams said in a written statement at the time.

PG&E issued an incident report to regulators that strongly suggested the fire had been caused by its equipment, a conclusion later confirmed by investigators. Over the next five days, PG&E shares plunged 63% to $17.74 from $47.80.

Investors and credit-ratings firms had cast doubt on PG&E’s financial future after the 2017 wine-country fires. The Camp Fire darkened the outlook.

By January 2019, PG&E was facing 50 lawsuits from the Camp Fire, six seeking class-action status. That was on top of 700 suits from the wine country fires.

PG&E’s directors decided heads needed to roll to signal changes to come. After some debate, they concluded Ms. Williams had to be one of them.

She fought to stay. With more time, she argued, she could reorient the company, according to two people with knowledge of the exchange. The board was unmoved.

Ms. Williams stepped down on Jan. 13. She had been CEO for just 14 months.

The next morning, PG&E said it expected to seek chapter 11 protection for a second time, the dreaded return trip to bankruptcy archly dubbed Chapter 22.

A familiar cast of characters assembled 15 days later for what was then the sixth-largest U.S. corporate bankruptcy. Attorneys filled the seven wooden pews in Judge Dennis Montali’s courtroom, supplemented by a motley collection of green and gray office chairs. Those who couldn’t fit spilled over into a room a floor below. The judge and about a dozen of the lawyers had worked on the PG&E’s first bankruptcy.

One of the first orders of business for PG&E’s lead attorney, Steve Karotkin, was asking the court to allow the company to keep paying suppliers for the gas and electricity it sold to customers.

“We can’t let the bankruptcy court lights go out,” Judge Montali said.

Almost a year later, the lawyers and the judge have hammered out ways for the lights to stay on in Northern California, but PG&E’s future remains murky. The fires, deaths and blackouts have some elected officials pushing to take the company over. Some want to control seats on its board. Others want to fundamentally change the way power is generated and delivered.

On this trip to bankruptcy court, restoring PG&E’s financial health may not be enough.

When dangerously high winds arise this year, the utility says it will black out fire-prone areas that are home to 5.4 million people

By Russell Gold and Katherine Blunt

PG&E Corp. can’t prevent its power lines from sparking the kinds of wildfires that have killed scores of Californians. So instead, it plans to pull the plug on a giant swath of the state’s population.

No U.S. utility has ever blacked out so many people on purpose. PG&E says it could knock out power to as much as an eighth of the state’s population for as long as five days when dangerously high winds arise. Communities likely to get shut off worry PG&E will put people in danger, especially the sick and elderly, and cause financial losses with slim hope of compensation.

In October, in a test run of sorts, PG&E for the first time cut power to several small communities over wildfire concerns, including the small Napa Valley town of Calistoga, for about two days. Emergency officials raced door-to-door to check on elderly residents, some of whom relied on electric medical devices. Grocers dumped spoiling inventory. Hotels lost business.

PG&E is “essentially shifting all of the burden, all of the losses onto everyone else,” said Dylan Feik, who was Calistoga city manager until earlier this month.

By shutting off power in fire-prone parts of its service area, which are home to 5.4 million people, PG&E said in regulatory filings it hopes to prevent more deadly wildfires. The San Francisco-based company sought bankruptcy protection in January, citing more than $30 billion in potential damages from fires linked to its equipment.

This plan amounts to an admission by PG&E that it can’t always fulfill its basic job of delivering electricity both safely and reliably. Years of drought and a drying climate have turned the state’s northern forests into a tinderbox, and the utility has failed to make needed investments to make its grid sturdier.

During this year’s wildfire season, which typically starts around June, PG&E is preparing to make cutoffs to a far larger geographic region than it has targeted for blackouts in the past, increasing the number of potentially affected customers nearly 10-fold. While it is unlikely all areas would be affected at once, the outages may turn entire counties dark.

The company said it is attempting to figure out how to avoid stranding medically vulnerable residents and is working with local authorities to try to ensure water, traffic lights and phone services aren’t shut off. It concedes it may end up cutting power to some of these services until it can build a better system.

“We simply don’t have the luxury, given the extreme weather conditions we are seeing, to wait to get it perfect,” said Aaron Johnson, the PG&E vice president in charge of the program.

PG&E said it generally wouldn’t cover losses due to intentional blackouts—regulations don’t require it to—though it would consider claims case-by-case. It declined to say whether it has ever compensated anyone for such claims.

The plug-pulling could go on for years. PG&E is rushing to strengthen its system to make its power lines more fire resistant and to trim trees in fire-prone areas. It is installing equipment to pinpoint shut-offs more accurately. In February, it said that work would take five years or longer.

California has long faced wildfire risk in the summer and fall, when hot, strong winds threaten to dislodge power lines that can ignite dry brush. Drought and climate change have made the risk especially acute in Northern California, where aging power lines cut through forests filled with dead trees.

Although California is drought-free for the first time since 2011 and has experienced a rainy spring, a hot, dry summer could desiccate new vegetation, creating more fuel for wildfires.

California regulators and elected officials acknowledge the PG&E shut-offs could have unintended consequences but say the fire threat warrants extreme measures. Wildfires have destroyed thousands of homes and killed dozens of people in Northern California in recent years. State fire investigators determined that PG&E equipment played a role in starting 18 wildfires in 2017 that killed 22 people.

Last November, the so-called Camp Fire burned down the town of Paradise and killed 85 people. PG&E has said its equipment was probably the cause. The company had repeatedly delayed a safety overhaul of a century-old high-voltage transmission line that is a prime suspect.

“We find ourselves as a state in the situation where this appears to be a necessary program,” said Elizaveta Malashenko, the California Public Utilities Commission’s safety and enforcement chief. “The best we can do is establish parameters around it.” These rules will include reporting requirements and rules for when a utility could shut off power.

San Diego Gas & Electric was the first California utility to cut power during dry, windy weather. It first contemplated doing so after a deadly fire in 2007 but didn’t black out any areas until 2013, because of pushback from residents and regulators. It has been adding weather stations to precisely locate problem areas, as well as technology that allows it to shut down smaller parts of its grid.

To date, the San Diego utility’s largest blackout affected about 20,800 people. ”If conditions threaten the integrity of our system, we will turn off power to protect public safety,” said a company spokeswoman. State rules, she said, “prevent payment for damages, such as food spoilage.”

Calistoga cutoff

PG&E has shut off power to reduce the risk of sparking fires only once before. The experience left residents, business owners and local officials unhappy. Last October, as winds reached 50 miles an hour, it shut off parts of its system that served 60,000 people in parts of seven counties.

Calistoga, a town of about 5,300 on the edge of wine country, was among those that went dark. City officials said communication with the company broke down when the lights went off, leaving them scrambling to find information and send medical help to vulnerable residents in three mobile-home parks. Some people spent nearly three days without power.

“This makes good business sense,” said Mr. Feik, the former city manager, of the power cut-off, “but from a public policy perspective, it’s awful.”

At the Calistoga Inn, an 18-room hotel with a restaurant and brewery, the lights went out during the dinner rush with 150 people dining on the patio. It took two days to restore power, forcing owner Michael Dunsford to clean out his refrigerators and issue refunds to hotel customers. Mr. Dunsford, also the town’s vice mayor, estimated the outage cost him about $15,000 in lost revenue and inventory.

The local hospital postponed surgeries. All three Calistoga schools closed. At the Calistoga Roastery, a refrigerator full of groceries used to make breakfast and lunch had to be thrown away. October is peak season for wine tourists, and hotels and restaurants had to cancel reservations.

Cal Mart, the local grocery store, closed for about 18 hours, costing owner Bill Shaw thousands of dollars in perishable goods. He plans to spend more than $100,000 to install a generator in the coming months.

Rural Sierra County, home to about 3,000 people in the Sierra Nevada, depends on internet-based phone service that doesn’t operate without electricity. When PG&E shut off power, the county lost its ability to use “reverse 911,” a system to alert residents using a recorded phone message.

“We would implore PG&E to rethink this policy,” the Sierra County board of supervisors later wrote in a letter to the company.

Resilience zones

PG&E is expanding its blackout program following the big 2018 Camp Fire.

It acknowledged the blackout resulted in some problems and said it is working to improve communications in future shut-offs. It also plans to create what it calls resilience zones, islands of power in town centers that provide electricity for certain services—police, a grocery store, a gas station, a community center where people can charge phones. That would require that PG&E deliver a generator to the zone after power is cut.

“We are a society so dependent on electricity,” said Junice Wilson, director of Mendocino Coast Home Health and Hospice, an agency that provides in-home services to about 100 residents in a rural coastal community. “It will be difficult for folks dependent on medical equipment.”

Conflicting estimates of how many people will be affected can make it hard to plan. In February, a lawyer representing Napa County wrote in a regulatory filing that PG&E told the county there were 150 people on a list of residents who received low-cost electricity because they used medical devices such as motorized wheelchairs and respirators. The state later said there were 1,691 people on the list. Meanwhile, the county had a separate list of 900 residents who needed electricity for medical reasons.

Expanding the program without first working out the bugs is a dangerous approach, said Irwin Redlener, a public-health professor at Columbia University and head of the National Center for Disaster Preparedness. “This is a population experiment that has some real ethical questions associated with it.”

Mr. Johnson, the PG&E official in charge of the program, said the company plans 350 community meetings this year to spread awareness about the blackouts. He said it also plans to conduct drills with county emergency officials in the early summer, when hot, dry winds could return to spark fires.

“The program will continue to evolve,” he said, “and get better and better each month.”

In Santa Rosa, a city devastated by wildfires in 2017, Councilman Jack Tibbetts said residents would likely tolerate a few days without power, given the alternative they had experienced.

Mr. Tibbetts, who serves as executive director of the county’s Society of St. Vincent de Paul, the region’s largest soup kitchen, added that it’s looking into buying a generator so it doesn’t have to shut down. “It is probably a good time to be in the generator business.”

The Golden State’s largest utility has struggled to reduce fire risks as its equipment keeps igniting blazes

By Russell Gold, Katherine Blunt and Rebecca Smith

PG&E Corp.equipment started more than one fire a day in California on average in recent years as a historic drought turned the region into a tinderbox. The utility’s unsuccessful efforts to prevent such blazes have put it in a state of crisis.

The fires included one on Oct. 8, 2017, when nearly 50-mile-an-hour winds snapped an alder tree in California’s Sonoma County wine country. The tree’s top hit a half-century-old PG&E power line and knocked it into a dry grass field, a state investigation found. The line set the grass ablaze, sparking what became known as the Nuns Fire.

It was among at least 17 major wildfires that year that California investigators have tied to PG&E. Data from the state firefighting agency, Cal Fire, show the fires together scorched 193,743 acres in eight counties, destroyed 3,256 structures and killed 22 people.

California’s largest utility, with a history of safety and maintenance problems, has been scrambling for five years to reduce fire risks. It has been overwhelmed by the threat’s severity and the challenge of shoring up thousands of miles of aging power lines and cutting and trimming millions of trees in a service area larger than Florida, according to a Wall Street Journal review of court records, regulatory filings and interviews with current and former regulators and company employees.

Sunday evening, PG&E announced that Chief Executive Geisha Williams was stepping down and that John Simon, the company’s general counsel, would serve as interim CEO until a replacement is found. On Monday, the company said it plans to file for bankruptcy protection by the end of the month.

PG&E faces billions of dollars in legal claims, the specter of bankruptcy, a federal judge forcing his way into utility operations, the possibility state regulators will break it into pieces, and potential state criminal charges including homicide, due to its continued inability to stop the fires from starting.

“It’s an organization facing collapse,” said Arthur O’Donnell, a safety supervisor at the California Public Utilities Commission until late last year. “There aren’t any silver bullets that can fix things quickly.”

The decade’s drought was unprecedented, bringing fire risks few in California had experienced. As conditions became more conducive to massive fires, the utility and its power lines kept providing sparks. PG&E spent heavily to make its system safer but couldn’t prevent an increase in fires.

PG&E didn’t anticipate how quickly the drought would overtake heavily wooded areas north of San Francisco and outside Sacramento, said Stephen Tankersley, who oversaw PG&E’s vegetation-management program between 1999 and 2015. “It’s hard to believe that anybody would have predicted that it would have been like this,” said Mr. Tankersley, now a utilities consultant. “I’ve never seen anything like it.”

Conditions on the ground worsened dramatically and quickly, said PG&E spokeswoman Lynsey Paulo. She said the utility has reacted with speed and urgency. “We are very aware of the risk and we are doing everything we can to keep our customers and the communities we serve safe,” she said. “PG&E considers wildfire risk as a top-tier enterprise risk. It is evident in our actions.”

The utility removed 451,000 more trees from 2016 through 2018 than it had originally forecast, she said, in an “amped up” effort to deal with massive tree mortality.

“We aspire to have absolutely no wildfires,” Ms. Williams said during a 2017 deposition in a lawsuit seeking fire-related damages from the company. She said operating thousands of miles of electrical conductors through forests created “an inherent exposure.” PG&E declined to make her available for an interview.

The number of fires PG&E reported its equipment sparked has risen in recent years even as it has stepped up spending on tree trimming and fire reduction programs. The state required it to report fires beginning in June 2014. It has since disclosed its equipment started about 1,550 fires through 2017. While most are snuffed out within minutes, some stoked by winds have spread quickly.

PG&E executives tried to assure investors, politicians and the public last year that the company, which provides natural gas and electricity to 16 million people, was getting the wildfire threat under control. Then in November, another tore through the town of Paradise, Calif., killing 86 people and destroying about 14,000 homes.

California officials have yet to determine the cause of that blaze, the Camp Fire, the deadliest in state history. PG&E has disclosed a 115,000-volt line was damaged and dislodged from one of its towers in the area some 15 minutes before the fire was first reported.

PG&E faces dozens of lawsuits from residents and insurers demanding it pay for fire damages. California law makes utilities responsible for any fire started by their equipment, even if they weren’t negligent. Analysts have pegged PG&E’s wildfire liabilities as high as $30 billion. That is triple its market value of $9.12 billion, which has plunged from $25.32 billion in mid-October. The S&P Utilities index has fallen 0.8% over the period.

Credit agencies have downgraded PG&E and have raised the possibility of bankruptcy along with regulators, legislators and analysts, citing the huge liability sums the company could face and the souring relationship between the company and California politicians. State lawmakers passed legislation last year to help shield the company from the prospect of bankruptcy after the 2017 fires by letting it pass some liability costs on to ratepayers. But the measure didn’t explicitly address fires in 2018. Now public opposition to PG&E has grown, complicating the prospects of any new political rescue.

Bankruptcies of regulated utilities are rare because their revenues are largely guaranteed by state and federal regulators. There haven’t been utility bankruptcies in significant number since the 1980s, when there was fallout from canceled nuclear power plants. PG&E’s Pacific Gas & Electric unit underwent bankruptcy reorganization from 2001 to 2004, as a result of the California energy crisis—the only utility in the state to take that step.

The California Public Utilities Commission and state lawmakers are debating proposals to let PG&E turn much of the fire-related obligation into securitized debt, which businesses and homeowners would pay off over many years through their power prices, already some of America’s highest. Regulators are exploring whether PG&E could be split into separate gas and electric businesses or into smaller regional utilities.

The California attorney general’s office recently said the company could face criminal charges, including manslaughter, in connection with fires, depending on the outcome of investigations. PG&E is on federal criminal probation resulting from felony convictions stemming from the 2010 San Bruno natural-gas-line explosion that killed eight people—it pleaded not guilty—and has a federally appointed monitor reviewing its gas safety practices.

U.S. District Judge William Alsup is considering whether PG&E may have violated the terms of its probation due to the fires. This month, he also proposed forcing PG&E to turn off power in fire-prone pockets during high-risk periods, saying “that inconvenience, irritating as it will be, will pale by comparison to the death and destruction that otherwise might result from PG&E-inflicted wildfires.” PG&E has until Jan. 23 to respond and declined to comment.

Surviving San Bruno’s fallout was a driving focus of company leaders for years, distracting it from the emerging wildfire threat, said Paula Rosput Reynolds, chairwoman of an independent panel that investigated PG&E after the explosion. “They lurch from crisis to crisis,” she said.

PG&E faced two challenges as drought took hold. It needed to update many of its 125,000 miles of electrical lines—enough to wrap the equator five times. From 2013 through 2017, it reported more than 16,000 sections of high-voltage lines fell. That is one downed line every three hours. PG&E reported that most dropped because trees fell on them but that many tumbled due to equipment failures. PG&E estimates about 30% stayed energized—creating fire or shock risk.

It also faced a massive tree-clearing campaign. It estimated in January 2018 that there were 120 million trees that could come in contact with its power lines and set out to trim 1.4 million annually.

It had problems finding skilled workers to do the job. Between 2014 and 2016, it let one contractor lower its hiring requirements because of a shortage of qualified workers, according to a deposition of the contractor’s operations manager taken as part of a wildfire lawsuit.

The task was complicated because some dangerous trees were on private land, forcing PG&E to negotiate with landowners, said Bob Fratini, a retired PG&E vegetation-management manager. Residents sometimes pressured crews, he said, to trim just enough to satisfy minimum requirements.

“Utilities should be given the right to remove any tree that could cause an outage or a fire,” he said. California regulators recently gave utilities more latitude in this area, saying they could shut off power to homes or businesses that prevent tree crews from working. PG&E’s Ms. Paulo said that isn’t necessary very often.

Sometimes, PG&E’s tree-clearing created new problems. After PG&E workers removed two trees in January 2015 southeast of Sacramento, a gray pine was exposed to wind and began leaning, according to a state investigation.

On a 102-degree day in September, the pine hit a 12,000-volt line and electricity ignited it, dropping embers onto dry grass and sparking the Butte Fire, which burned 70,868 acres and 921 buildings. Two people died.

In 2016, PG&E spent $435 million on a one-year blitz to clear dead trees hit by drought and beetle infestation, and $300 million more on other wildfire-related measures.

Since 2010, state inspectors assigned to audit PG&E’s electric operations have consistently found that the company completed maintenance and repair work behind schedule.

Wildfires returned with a vengeance in 2017. PG&E voiced optimism it was getting the situation under control. Weeks after the 2017 fires, it filed a 660-page report with state regulators describing wildfires as its fifth-most-significant safety risk, behind factors such as employee safety. PG&E’s Ms. Paulo said that the exact rank wasn’t important. “What is important is that top enterprise risks like wildfire are receiving focused attention,” she said.

“They never understood the risks,” said state Sen. Jerry Hill, a longtime critic of the company’s safety record. “They missed it in San Bruno and missed it with the wildfires. They didn’t have a clue.”

For years, PG&E and state officials assumed the company’s fire risks were less severe than those of utilities in Southern California, where hot Santa Ana winds had historically posed a threat in autumn.

Now it was clear PG&E faced a similar danger in what state officials concluded was the manifestation of climate change. And a growing population shift to Northern and Central California woodland areas had put more people in harm’s way.

Two big Southern California utilities, Sempra Energy’s San Diego Gas & Electric and Edison International’s Southern California Edison unit, encouraged by state officials, had installed weather stations to track regional wind conditions and developed policies to proactively turn off electricity in areas with especially high fire risks. PG&E, which state officials hadn’t pushed to do the same, was far behind in these measures.

After a deadly 2007 fire, San Diego Gas & Electric replaced 16,000 wood poles with steel poles, selectively insulated wires and widened gaps between wires, building a system to withstand 85 mile-an-hour winds. It has spent more than $1 billion so far, said a utility spokeswoman, and is still implementing the changes.

PG&E filed a request with state regulators last month to spend $5 billion from 2018 to 2022 to reduce fires by accelerating plans to insulate wires, replace power poles and towers, install safer equipment and cut down trees.

It is proposing to install technology that better allows engineers to automatically shut down equipment when fire risks are highest. It plans to install 600 smoke-spotting cameras to provide early fire warnings, up from nine currently installed, and add 1,300 local weather stations. PG&E estimates most of the proposed changes won’t be completed until 2022, raising the prospect fires could continue for the next few years.

For Californians like Mike Holdner, trust in PG&E has eroded. Mr. Holdner, whose home burned down in the 2017 Tubbs Fire that killed 22 people, said he is considering suing the utility if a state investigation determines its equipment started the fire. “If it puts them into bankruptcy, so be it,” he said, “if that’s the way you have to change that culture.”