PG&E could face financial trouble if utility is found responsible for California’s worst wildfire
In a grim sign for the Northern California utility giant, Pacific Gas & Electric Co. said Wednesday that if it is deemed responsible for the fire that destroyed much of Paradise, the liability would exceed its insurance coverage.
The cause of California’s most destructive and deadliest wildfire has not yet been determined. But PG&E said a transmission line in the area went offline 15 minutes before the fire was first reported, and the company found a damaged transmission tower near where investigators said the fire began. Investigations are underway on the cause of the Camp fire, which has destroyed more than 10,300 structures and killed at least 56 people.
In a corporate filing Wednesday, PG&E said that if its equipment caused the fire, it “would be expected to have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.”
In a statement, the utility added: “Right now, our entire company is focused on supporting first responders and assisting our customers and communities impacted by the Camp fire. Our hearts are with the communities impacted by the Camp fire. The loss of life and property is staggering. We encourage the public to follow their directions and warnings as fire conditions continue to change.”
Since the fire began Thursday, PG&E stock has lost half its value.
Ariel view of destruction from the Camp fire in Paradise off of Clark Road. The Camp Fire has burned more than 7,000 structures in Paradise.(Carolyn Cole / Los Angeles Times)
Crews continue their search for victims of the Camp fire in Paradise, Calif., where the majority of homes were destroyed by the fast-moving wildfire.(Carolyn Cole / Los Angeles Times)
A body is recovered from Ridgewood Mobile Home Park in Paradise, as the search continues for victims of the Camp Fire in Paradise.(Carolyn Cole / Los Angeles Times)
Little remains of the Ridgewood Mobile Home Park in Paradise, Calif., where a team recovered one victim Monday.(Carolyn Cole / Los Angeles Times)
The search for victims continues in Paradise, Calif., after the deadly Camp fire raced through the community.(Carolyn Cole / Los Angeles Times)
A crew recovers the remains of a dog on Lawndale Lane in Paradise, Calif.(Carolyn Cole / Los Angeles Times)
A horse at the Butte County Fairgrounds has its owner’s phone number on its neck(Carolyn Cole / Los Angeles Times)
Outside of Pulga, Calif., on the North Fork of the Feather River, helicopters do airdrops while ground crews try to keep the Camp fire from spreading.(Carolyn Cole / Los Angeles Times)
Two young deer stand in the rubble of a home in Paradise, Calif.(Carolyn Cole / Los Angeles Times)
Burned out business in the downtown area of Paradise, Calif., after the Camp fire burned through the area.(Peter Dasilva / EPA / Shutterstock)
Silvia Johnson, age 85, said her house in Paradise, Calif., was burning when she left it, and knows it’s gone. Johnson has been living in Paradise for 48 years and says of the fire, “I’ve never seen anything like it.”(Carolyn Cole / Los Angeles Times)
The sun rises over the burned hills near Paradise, Calif., as the Camp fire continues to burn.(Carolyn Cole / Los Angeles Times)
Firefighters work to keep flames from spreading through the Shadowbrook apartment complex as a wildfire burns through Paradise, Calif., on Friday.(Noah Berger / Associated Press)
Scorched vehicles at a used-car dealership in Paradise, Calif., on Friday.(Noah Berger / Associated Press)
Officer Randy Law tends to a rescued horse as a wildfire burns in Paradise, Calif.(Noah Berger / Associated Press)
A firefighter battles flames in the Butte County town of Magalia on Friday.(Justin Sullivan / Getty Images)
Abandoned vehicles on the side of a road in Paradise, Calif.(Josh Edelson / AFP-Getty Images)
A home burns in Paradise, Calif.(Justin Sullivan / Getty Images)
Hospital workers and first responders evacuate patients from Feather River Hospital as the Camp fire moves through Paradise, Calif.(Justin Sullivan / Getty Images)
Rescue teams scramble to evacuate patients as Feather River Hospital burns in Paradise, Calif.(Josh Edelson / AFP-Getty Images)
A statue is seen on a smouldering property as the Camp fire tears through Paradise.(Josh Edelson / AFP-Getty Images)
A home is overshadowed by towering smoke plumes as the Camp fire races through town in Paradise(JOSH EDELSON / AFP/Getty Images)
A home burns during the Camp fire in Paradise. At least five people have died in a massive wildfire raging in northern Calif.(JOSH EDELSON / AFP/Getty Images)
A Jack In The Box fast food restaurant burns as the Camp fire tears through Paradise.(JOSH EDELSON / AFP/Getty Images)
Flames consume a Kentucky Fried Chicken as the Camp Fire tears through Paradise.(Noah Berger / Associated Press)
A fire fighter puts water on a fire as he performs structure protection, as the Camp Fire burns out of control through Paradise.(PETER DASILVA / EPA / Shutterstock)
Hillery Johnson prepares to leave here horse, Augie in a shopping center parking lot after law enforcement officers said it was time to leave as the Camp fire approached and there is no trailer to transport Augie out of the area.(PETER DASILVA / EPA / Shutterstock)
Hospital workers embrace as they evacuate patients from the Feather River Hospital in Paradise, Calif.(Justin Sullivan / Getty Images)
A home burns as the Camp fire rages through Paradise.(Noah Berger / Associated Press)
A Paradise business is in ruins as the Camp fire ravaged the area.(Justin Sullivan / Getty Images)
Hospital workers and first-responders evacuate patients from the Feather River Hospital in Paradise.(Justin Sullivan / Getty Images)
Flames engulf a home in Paradise.(Noah Berger / Associated Press)
The evacuation of patients continues at the Feather River Hospital in Paradise.(Justin Sullivan / Getty Images)
The Camp fire rages through Paradise.(Noah Berger / Associated Press)
Flames from the Camp fire destroy a home in Paradise.(Justin Sullivan / Getty Images)
The evacuation at Feather River Hospital.(Noah Berger / Associated Press)
A building burns in Paradise.(Justin Sullivan / Getty Images)
Some who lost homes in Paradise have already sued PG&E, accusing the utility of negligence and blaming it for the fire.
The financial costs of the deadly blaze are expected to be staggering.
After destructive fires swept through wine country last year, PG&E faced similar liability questions. Wall Street estimates the utility giant faces up to $15 billion in liabilities from those fires, which also burned thousands of homes. PG&E has raised the possibility of bankruptcy if it cannot get some relief.
Investigators already have linked PG&E lines to some of the October 2017 fires, including the Atlas fire that killed six people and destroyed 781 structures, and the Redwood Valley fire that killed nine and destroyed 544 structures. Officials continue to investigate the cause of the largest of the wine country fires, the Tubbs fire, which swept into Santa Rosa, killing 22 and destroying more than 5,600 structures.
Gov. Jerry Brown in September signed a bill that will offer financial help to utility companies facing massive fire losses. Though the bill was scaled back from an earlier effort to rewrite a liability standard that applies to the companies when their equipment is involved in sparking a fire, it nonetheless offers new power to the California Public Utilities Commission to offer concessions when appropriate. The bill allows PG&E to borrow money for its 2017 wildfire costs while using money collected from ratepayers to pay back the loan.
Some consumer groups oppose the bill, though, calling it a bailout for PG&E.
The cause of the Woolsey fire, which has destroyed hundreds of homes in Los Angeles and Ventura counties, is also under investigation.
On Monday, Southern California Edison reported an issue with a circuit in the utility’s Chatsworth substation on East Street and Alfa Road that occurred minutes before the Woolsey fire broke out in the same area.
Edison this year announced a plan to spend $582 million for a series of improvements aimed at reducing fire risk that probably would mean higher bills for ratepayers. The proposal includes strengthening poles and using better technology to determine when winds put the power grid at risk.
Many of California’s most destructive fires have been fueled by powerful winds, which in some cases have caused power lines to snap off and spark blazes. Utility companies are on the hook for hundreds of millions of dollars in losses, and officials have warned that the losses will grow if the agencies can’t find ways to reduce the risks.
Times staff writer Paige St. John contributed to this report.
7:30 p.m.: This article was updated with information about fires caused by power lines.
This article was originally published at 11:40 a.m.
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