PG&E, California’s largest utility, is buckling under the pressure from its role in multiple deadly wildfires.
As it strives to emerge from the protection of bankruptcy, filed for in the aftermath of the fires, the utility will now have to absorb another hit. An administrative law judge (ALJ) for the state’s utility regulator has recommended an increased penalty in settlement proceedings.
ALJ Park is the presiding officer in the proceedings before the California Public Utilities Commission (PUC), which were filed in June 2019 to determine penalties for PG&E and its role in the fires.
According to Utility Dive, stakeholders in the proceedings, including PG&E and the PUC’s Safety and Enforcement Division, had reached an agreement that included $1.67 billion in fines and penalties. Other parties in the process had appealed that agreement, arguing that it did not go far enough.
The ALJ concurred with their appeal and ordered the penalties to be increased.
Specifically, the judge increased the penalties by nearly $500 million to $2.1 billion. Another change is the inclusion of a $200 million fine payed to a general fund to assist wildfire victims. An additional $64 million will go toward safety enhancement initiatives. Also, the new penalties include a $200 million fine payable to a general fund to satisfy the claims of the wildfire victims.
Finally, the decision requires any tax savings associated with PG&E payments under the settlement agreement to be returned to the benefit of ratepayers.
The Utility Reform Network, one of the organizations that had advocated for stiffer penalties, praised the ALJ decision. Executive Director Mark Toney called it “a victory for consumers.” He commended the PUC for "sending PG&E a message that the company must change course and put customer safety first.”
According to the PUC, in the “October 2017 Fire Siege” report, Northern California burned 245,000 acres, destroyed an estimated 8,900 structures and took the lives of 44 people. The Camp Fire in November 2018, also in Northern California, destroyed approximately 19,000 structures and resulted in 85 fatalities. It leveled the town of Paradise. The California Department of Forestry determined that PG&E’s electric facilities were the cause of the Camp Fire and nearly all of the 2017 fires.