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That's an argument for making utilities publicly-owned again more than anything else.

The thing that confuses me is that California bailed out PG&E when they declared bankruptcy, yet PG&E are still operating as a for-profit company? They essentially just got free money from the government. Why didn't the government take over the company?

I agree with you, but to the average citizen, they are unaware of the direct consequences of those who they are voting for, especially when it relates to taxes. To some, this could be seen as a direct result of the "woke agenda" and would be anti-woke tax. They might double down and reelect their candidate who got them into this mess to "fix" the system and stop the tax increases, since that's easier than actually creating meaningful changes in society.

And how has this penalty incentivised any change in behavior? I assume the money will come from the school district, which is earmarked from local and federal taxes. So now there's less money to pay for schools. In practice the school board may do as they wish with less funding until they are not reelected. Do you think they will be firing or docking pay of the people who are actually to blame?

The large sums of money are supposed to be punitive. They're supposed to hurt the offender enough that they won't do it again.

Unfortunately, the sums are rarely high enough to do that, and usually get cut several times in appeals.

A better method would be going after the individuals responsible for it directly, instead of the entire organization. But that'll never happen.

To paraphrase Churchill, it's the worst possible system, except for all the others,

While I get what you're saying, the best type of outcome for something like this will be a policy change to avoid similar incidents. However if you were to force policy changes through these sort of lawsuits, you would have the defense fighting for the smallest policy changes and even arguing that these small changes infringe their rights or are cruel and unusual - this would be even more complex to solve, and ineffective. The better way is to make penalties high enough that those penalties themselves motivate policy changes that will actually be effective. It puts the people being punished in charge of their next possible punishment, and this can lead to even better policy changes than simply doing it directly.

For an example, if you sued a company because you stepped on a nail left by their construction crew (which was proven to be willful negligence), they might argue that they can simply sweep up any remaining nails. By changing that to a $1 million fine, they're going to not only remove all of the nails, but make sure they never get left on the floor ever again. You can't get this effect by simply ruling "no more nails on the floor."

I’ve always found it absurd how you can get compensated with amounts of money you would not see in a lifetime of work if you win the right type of legal case in the US so much so that purposely getting hurt to sue has become a running joke.

This isn't entirely unique to the USA. It takes different, and even worse forms, in some other countries.

In China for car accidents theres a history of the offender intentionally killing the injury victim to avoid having to pay for a lifetime of disability payments. Its cheaper for the offender to pay a one-time fine for killing than it is to pay for years or decades to support the victim financially. source