PG&E to pay $1 billion to governments for wildfire damage

FILE: View of the San Bruno fire on September 9, 2010 at 11:31 pm (Photo By MisterOh – Own work, CC BY-SA 3.0)

SACRAMENTO, Calif. — A California utility agreed Tuesday to pay $1 billion to 14 local governments to cover damages from a series of deadly wildfires caused by its downed power lines.

The settlement is a sliver of the more than $30 billion in potential damages Pacific Gas & Electric is facing in lawsuits filed by local governments, insurance companies and private property owners.

More than half of the $1 billion in the agreement would go to four governments impacted by a 2018 fire that killed 85 people and destroyed nearly 14,000 homes in Northern California.

A total of $270 million would go to Paradise, which was mostly destroyed in the blaze. The town had 26,000 residents before the fire and now has less than 3,000 people. It has lost more than 90% of its tax revenue.

“There is some relief and hope in knowing that we will have some financial stability,” Paradise Town Manager Lauren Gill said. “We can’t do disaster recovery and rebuild the town if we don’t have people to do it.”

The settlement also covers a 2015 fire in Calaveras County and a series of 2017 fires in wine country.

PG&E filed for bankruptcy in January. The agreement would resolve claims from some local governments, but it still must be approved by a bankruptcy court. That likely won’t happen until lawsuits by insurance companies and private property owners are resolved.

“The bankruptcy court approval is not trivial,” said Mike Danko, part of a group of attorneys who represent about 2,800 wildfire victims in a lawsuit against PG&E. Danko said they are “definitely not” close to resolving the lawsuit.

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

“We remain focused on supporting our customers and communities impacted by wildfires and helping them recover and rebuild,” he said.

High winds knocking down power lines during hot, dry weather have been blamed for starting several of the state’s most destructive wildfires.

Last month, regulators agreed to let utilities temporarily cut off electricity to possibly hundreds of thousands of customers during peak fire conditions to avoid starting more wildfires.

The 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.

“Nobody who lives in the wildfire zone should consider themselves to have reliable electricity. They should prepare accordingly,” Mike Picker, president of the California Public Utilities Commission, told the Sacramento Press Club on Tuesday.

California’s other two investor-owned utilities have also warned that wildfire liabilities could force rate increases later this year.

State lawmakers are considering legislation that would set up a fund to help utility companies pay damages related to wildfires caused by their equipment.

California state Sen. Bill Dodd, a Democrat from Napa, said the fund could total anywhere between $24 billion and $50 billion, mostly paid for by utilities and their shareholders.

“It’s important that we put together a program that ratepayers aren’t the victims once again,” he said.