PG&E to pay $1B to govts for wildfire damage

by Bamidele Ogunberu Posted on June 18th, 2019

Sacramento: California utility Pacific Gas & Electric Co. (PG&E) blamed for igniting several wildfires caused by downed power lines that killed dozens and destroyed thousands of homes agreed Tuesday to pay $1 billion in damages to local governments.

Attorneys representing 14 local public entities announced the settlement with Pacific Gas & Electric to cover “taxpayer losses.”

More than half of the settlement is related to the 2018 fire in Northern California that killed 85 people and destroyed more than 13,000 homes. It included $270 million to the town of Paradise, which was mostly destroyed in the fire.

The money also covers damage from a 2015 in Butte County and a series of 2017 fires in Northern California wine country

The Texas-based Baron & Budd law firm announced the settlement on behalf of the 14 local governments.

“This money will help local government and taxpayers rebuild their communities after several years of devastating wildfires,” Baron & Budd said in a news release. “The cities and counties will be in a better position to help their citizens rebuild and move forward.”

PG&E Corp. filed for bankruptcy earlier this year citing billions of dollars in expected losses, mostly from lawsuits filed by individual fire victims, businesses and insurance companies. A judge overseeing that case must approve the settlement announced Tuesday.

PG&E spokesman Paul Doherty called the settlement “an important first step toward an orderly, fair and expeditious resolution of wildfire claims.”

Last month, regulators approved allowing utilities to cut off electricity to possibly hundreds of thousands of customers to avoid catastrophic wildfires.

The California Public Utilities Commission gave the green light but said utilities must do a better job educating and notifying the public, particularly those with disabilities and others who are vulnerable, and ramp up preventive efforts, such as clearing brush and installing fire-resistant poles.

The precautionary outages could mean multiday blackouts for cities as large as San Francisco and San Jose, Northern California’s major power provider warned in a recent filing with the utilities commission.

Pacific Gas & Electric anticipates cutting the power only in “truly extreme fire danger weather” while recognizing that there “are safety risks on both sides of this issue,” vice president Aaron Johnson said.

PG&E initially planned to de-energize power lines in at-risk rural areas but has since expanded its plans to include high-voltage transmission lines like the one that sparked the Paradise fire.

Criminal Case

Butte County’s district attorney has been considering criminal charges against the company over the fire, which state investigators blamed on a PG&E power line. The settlement announced Tuesday would have no effect on any criminal case, Fiske said.

Nine counties and cities would, together, receive $415 million related to fires that tore across Northern California’s wine country in October of 2017. And the Calaveras County Water District would get $3 million to cover damage from the 2015 Butte Fire, which was started by a tree leaning into a power line.

Also on Tuesday, California regulators asked for comment on proposals designed to improve PG&E’s safety culture. Among the proposals: splitting the company’s gas and electric operations into separate utilities or selling its gas assets outright; a periodic review of PG&E’s certificate to operate; eliminating PG&E’s holding company structure; and linking the company’s profits to safety performance.

“This is a company that is in Chapter 11 related to their perceived safety performance,” said Paul Patterson, an utility analyst at Glenrock Associates. “One has to wonder if any of these proposals would provide any meaningful additional incentive.”

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