California utility PG&E faces billion$ in fines, lawsuits for wildfire death and damages


Click to enlargeDavid Paul Morris/Bloomberg

❝ Late Friday, California confirmed what many across the state’s devastated wine country had suspected for months: Equipment owned by utility giant PG&E Corp. ignited some of the deadliest and most destructive wildfires that tore through their homes in October.

The most unexpected and crucial part of the findings, though, was at the very bottom of California’s end-of-day statement: The state had found evidence of alleged violations of law by PG&E in connection with eight of the blazes…

❝ That evidence — which California’s fire agency has now sent to county prosecutors — could make or break PG&E in the dozens of lawsuits over the Northern California fires that altogether killed 44 people, consumed thousands of homes and racked up an estimated $10 billion in damages. The alleged violations could also expose PG&E to criminal charges only two years after the San Francisco company was convicted of breaking safety rules that led to a deadly gas pipeline explosion in San Bruno, California.

I have no idea what portion of American corporations are dumb enough to think that skipping safety requirements to save a buck or two ever pays off over time. PG&E has to be as short-sighted as derivative investors in 2007 – or Trump voters.

8 thoughts on “California utility PG&E faces billion$ in fines, lawsuits for wildfire death and damages

  1. McLeod says:

    “Fire victims on Monday derided Gov. Jerry Brown’s wildfire liability proposal for large utilities as unconstitutional and illegal — even though PG&E’s top boss has said the plan doesn’t go far enough to help the utilities.” https://www.mercurynews.com/2018/07/30/pge-friendly-wildfire-plan-is-labeled-unconstitutional-fire-victims/ “Gov. Brown on July 24 proposed a plan that could dramatically ease future potential wildfire-related financial burdens on large utilities such as PG&E by potentially shoveling more costs onto the shoulders of utility ratepayers and California homeowners. Brown said the plan wouldn’t, however, affect any of PG&E’s potential costs from the deadly October wildfires that torched the North Bay Wine Country and nearby regions.
    The fire victims’ opposition to the governor’s plan is a fresh indicator that a full-scale battle looms in the waning weeks of the state legislative session over the nature and extent of future liabilities for PG&E and other big power companies when their equipment is involved in fires.” https://www.mercurynews.com/2018/07/30/pge-friendly-wildfire-plan-is-labeled-unconstitutional-fire-victims/
    See also “New Mexico wildfire verdict upholds traditional relationships between distribution co-ops and generation providers” http://ahclaw.com/cooperative-blog-posts/2016/09/new-mexico-wildfire-verdict-upholds-traditional-relationships-distribution-co-ops-generation-providers/
    20111 Las Conchas wildfire: estimated cost of suppression $48,385,000. Total costs estimate between $91,931,500 and $1,403,165,000 with midpoint at $614,489,500.

  2. Update says:

    “Facing $17 Billion in Fire Damages, a CEO Blames Climate Change” (Bloomberg 8/13/18) https://www.bloomberg.com/news/articles/2018-08-13/facing-17-billion-in-fire-damages-a-ceo-blames-climate-change
    “State investigators have tied PG&E equipment, such as trees hitting power lines, to some of the blazes in October that in total destroyed nearly 9,000 structures and killed 44 people. It now faces damage liabilities totaling as much as $17 billion, and possible financial ruin – its stock is down about 37 percent and the company has lost 40% of its market value since the fires – unless its CEO can convince California lawmakers that the company’s problem is, in fact, a climate change problem.
    PG&E has already been hit with a $2.5 billion charge stemming from the October fires and has told California lawmakers that it may be forced into bankruptcy unless they enact changes that will shield the company from this liability. The utility declared bankruptcy in 2001 after incurring $9 billion in debt by buying power for more than it could charge customers. It emerged three years later after paying $10.2 billion to its creditors.
    In 2001 the New York Times reported “That Pacific Gas and Electric, which helped design the deregulation that brought on the California power crisis, would now take so drastic a step both concerned and puzzled analysts”, while The Governor stated ”This action was unnecessary, they’ve caused undue alarm. PG&E was not pushed into bankruptcy, but plunged themselves into bankruptcy for their own strategic advantage — not the best interests of the people of California.” https://www.nytimes.com/2001/04/07/us/california-s-largest-utility-files-for-bankruptcy.html See also California electricity crisis (remember Enron?) https://en.wikipedia.org/wiki/Gray_Davis#California_electricity_crisis

  3. Reality ✓ says:

    Ten months after wildfires devastated Wine Country, PG&E’s lobbying efforts are entering their final week to spur California lawmakers to overhaul the state’s wildfire liability rules during the current legislative session. However, the debate “has tended to obscure one unpleasant fact for utility customers: No matter what Sacramento decides, utility bills are likely to rise as a result of recent fires,” reports the San Francisco Chronicle. (San Francisco Business Times Aug 27, 2018) https://www.bizjournals.com/sanfrancisco/news/2018/08/27/pg-e-bills-likely-to-rise-amid-wildfire-liability.html The utility posted nearly $1 billion of net losses for the second quarter and took a $2.5 billion charge after Cal Fire blamed 14 of the 16 California wildfires last year on the utility. With more than 200 lawsuits filed against the PG&E following the Wine Country fires, estimates of the utility’s potential liability range as high as $17 billion — far exceeding the $840 million in insurance coverage PG&E listed in a financial filing in June.
    See also “Wildfire risk doesn’t douse housing demand” (University of Nevada, Las Vegas 8/2718) https://phys.org/news/2018-08-wildfire-doesnt-douse-housing-demand.html

  4. Update says:

    Pacific Gas & Electric’s new CEO is set to make $3 million on his first day on the job Wednesday. https://sanfrancisco.cbslocal.com/2019/04/17/pge-ceo-bonus-3-million-first-day/
    Bill Johnson was tapped to become the utility’s new executive, according to a regulatory filing.
    He’s set to receive a one-time payment of $3 million on his first day, that’s on top of his $2.5 million base pay. That figure doesn’t include stock options.
    PG&E filed for bankruptcy in January in the face of billions of dollars in potential liability from huge wildfires in California in 2017 and 2018, including the deadliest U.S. wildfire in a century. That blaze in November 2018 killed 86 people and destroyed most of the town of Paradise.
    In March, PG&E asked a judge to allow it to pay $235 million in 2019 bonuses to thousands of employees despite its bankruptcy filing.

  5. Update says:

    Utility equipment sparked massive California wildfire, investigators say : PG&E makes its way through bankruptcy, now utility is responsible for 85 deaths. https://arstechnica.com/tech-policy/2019/05/fire-officials-say-utilitys-power-lines-were-responsible-for-cas-deadliest-fire/ The Camp Fire, which killed 85 people and burnt down nearly 15,000 homes, was sparked by PG&E power lines, according to a report that Cal Fire officials discussed with the press. The report was not widely released, but it was forwarded to the Butte County district attorney’s office.
    The district attorney may bring criminal charges against the utility, and Cal Fire Deputy Director Mike Mohler told reporters that “Investigators determined there were violations of law.” According to the San Francisco Chronicle, charges could include “recklessly causing a fire or manslaughter.” https://www.sfchronicle.com/business/article/PG-E-power-lines-have-long-been-the-leading-13848463.php

  6. Reddy Kilowatt says:

    “California regulators on Thursday approved allowing utilities to cut off electricity to possibly hundreds of thousands of customers to avoid catastrophic wildfires like the one sparked by power lines last year that killed 85 people and largely destroyed the city of Paradise.
    Utilities’ liability can reach billions of dollars, and after several years of devastating wildfires, they asked regulators to allow them to pull the plug when fire risk is extremely high. That’s mainly during periods of excessive winds and low humidity when vegetation is dried out and can easily ignite.
    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 nation’s deadliest wildfire in a century. The blaze last November killed 85 people while wiping out nearly 15,000 homes in and around Paradise.”
    https://www.usnews.com/news/best-states/california/articles/2019-05-30/california-sets-rules-for-cutting-power-to-prevent-wildfires

    • Ashes, ashes... says:

      “PG&E starts Northern California power blackouts in 3 counties under wildfire threat” (Sacramento Bee 6.8.19) https://www.sacbee.com/news/state/california/fires/article231338763.html “PG&E Corp. began deliberate blackouts to about 1,700 customers in parts of Yolo, Solano and Napa counties early Saturday, as high winds created “red flag” wildfire conditions across parts of Northern California.
      The utility, driven into bankruptcy by two horrific wildfire seasons, engineered the blackouts at about 6:30 a.m. Most of the affected customers live west of Winters, and in areas around Suisun City, Vacaville and Lake Berryessa. The shutoffs will last “through at least Saturday afternoon,” the company said.
      PG&E warned that the deliberate shutoffs, the first of the 2019 fire season, could spread to as many as 30,000 customers later in the day, including portions of Butte, Yuba, Nevada, El Dorado and Placer counties.”
      The largest wildfire in California history was started last July by a property owner who was installing a shade barrier. After disturbing an underground nest of yellow jackets, the man hammered a two-foot-long concrete stake into the ground to plug the hole, according to Cal Fire’s investigative report.The hammering created a spark that lit up a patch of tall grass. Winds were strong, conditions were dry and the fire grew out of control. The property owner was unable to douse the flames, which eventually burned a total of 410,203 acres, 280 homes and other buildings and left a firefighter from Utah dead. https://www.sacbee.com/news/state/california/fires/article231259623.html
      “The future is already here — it’s just not very evenly distributed.” William Gibson, The Economist, December 4, 2003.

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