PG&E to Pay Largest Penalty Ever For Deadly Wildfires

By Rick Laezman | May 14, 2020




A grim chapter in California history may finally be coming to a close.

Its closure should be welcome, if not entirely satisfying, news to all those who were involved.

On May 7, the California Public Utilities Commission (PUC) approved a settlement with Pacific Gas & Electric Company (PG&E) for its role in several deadly wildfires in 2017 and 2018.

According to the PUC, its decision “resolves all issues” related to its own investigation into the utility’s role in the fires.

The decision imposes penalties on PG&E totaling $1.9 billion. This includes $1.823 billion in disallowances for wildfire-related expenditures and $114 million in System Enhancement Initiatives and corrective actions.

In its decision, the Commission increased the amounts that had been included in a settlement agreement proposed by the utility and other stakeholders. The disallowance for wildfire-related expenditures is a $193 million increase, and the penalty for system enhancement initiatives is a $64 million increase.

The decision additionally requires any tax savings associated with the shareholder payments under the settlement agreement to be returned to the benefit of ratepayers, which the utility estimates could exceed $425 million.

The PUC also “permanently suspended” PG&E’s obligation to pay a $200 million fine payable to the commission’s general fund to satisfy the claims of wildfire victims. The utility had argued that the fine might jeopardize financing it had secured as part of its plans to exit bankruptcy.

While the penalties are steep, not all observers were satisfied, especially concerning the suspension of the $200 million fine. Mark Toney, executive director of the advocacy group, The Utility Reform Network, said the PUC, “let PG&E off the hook” in a statement to Utility Dive. He added that the decision "sent the wrong message” to the utility and to customers.

PUC Commissioners defended their decision, describing the wildfires as “unprecedented in size, scope, destruction, and loss of life.” Combined, they resulted in nearly 400,000 acres burned and nearly 130 deaths.

About The Author

LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected]

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