PG&E to Pay $43.4 Million for Starting the Kincade Fire

Fresh out of bankruptcy, and with fire season right around the corner, PG&E agreed to pay for damage caused by the 2019 blaze.

A meteor streaks across the sky as gusty winds create an ember cast on a valley oak tree burned by the Kincade fire, early Wednesday morning, Oct. 30, 2019, in Knights Valley east of Healdsburg, Calif. (Kent Porter/The Press Democrat via AP)

(CN) — Pacific Gas & Electric barely emerged from bankruptcy less than a year ago, but the company is already on the hook for another $43.4 million after agreeing to new settlements on Wednesday.

The agreements between PG&E, the state’s largest power supplier, and 10 California cities and counties will compensate local areas that were severely damaged by the 2019 Kincade Fire in Sonoma County and the 2020 Zogg Fire in Shasta County. The Kincade Fire alone forced the evacuation of nearly 190,000 residents, and the Zogg Fire killed four people.

The latest settlements resolve claims against the company made by California municipalities but PG&E could still be held liable for a staggering $600 million in claims filed by individual home and business owners in the affected regions. Because claims stemming from the Kincade and Zogg fires occurred after PG&E filed for Chapter 11 bankruptcy, they’re not covered by a $13.5 billion fund set up by the company to pay victims of earlier wildfires.

As a new drought intensifies and California gets drier, PG&E and its fellow energy providers are having an increasingly difficult time not setting the state ablaze. The company has been tasked with performing a delicate balancing act: They can play it safe by powering everything down at the first sign of trouble and wind up with irate customers sitting in the dark. Or they can roll the dice, leave much of it on, and risk igniting the next big one. In 2019 they chose the latter, resulting in the Kincade Fire that burned 77,000 acres and destroyed 352 homes and buildings.

“Our thoughts continue to be with those who lost homes or businesses, and were personally impacted by the October 2019 Kincade fire, especially those who were injured, including several firefighters,” said James Noonan, a PG&E representative, in an email. “As we’ve said previously, we dispute the charges filed by the Sonoma County District Attorney’s Office. In our filing, we outlined why we believe the majority of these charges should be dismissed as a matter of law.”

The company faces more than just money troubles this time — the district attorney for Sonoma County has filed criminal charges against the utility and prosecutors in Shasta County are considering a similar move. PG&E disputes those charges, claiming that 25 of the 33 counts filed against it “are based on environmental statutes that appear never before to have been applied to a wildfire in the long history of California wildfires.”

Among the charges that PG&E disputes is the district attorney’s claim that the company negligently produced and released air contaminants, which PG&E says were merely a byproduct of the fire. The company contends the statutes they’re accused of breaking were intended to regulate pollution-generating industries like oil refining and dumps, rather than pollution emitted as the result of an accident outside the scope of the company’s normal operations.

PG&E claims they are taking further measures to mitigate wildfire risk this year, including meeting state vegetation standards across 1,800 miles of power lines; continuing to upgrade the electric grid; installing 250 sectionalizing devices to minimize the number of affected customers when they’re forced to shut off power; piloting new technologies to detect various threats; and employing new risk modeling to target work in areas that remain at the highest risk.

The company was also hit Wednesday with a $106 million fine by the California Public Utilities Commission for missteps related to its 2019 public safety power shutoffs. The commission will offset $86 million of the fine based on bill credits PG&E provided to customers at the governor’s direction, leaving them with a net penalty of $20 million.

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