California wildfires put Pacific Gas and Electric in tenuous position

Officials for the Pacific Gas and Electric Corp. said the company’s equipment has been linked to another California wildfire, the fifth to which the company has been connected this year.

The largest of the five fires, the Kincade Fire, prompted the evacuation of 180,000 residents of Sonoma County. Officials said that fire is 80 percent contained.

In an incident report filed with the state’s Public Utilities Commission, PG&E officials said they learned from media reports that the California Department of Forestry and Fire Protection (Cal Fire) had determined that the utility’s electrical equipment was responsible for a fire in Martinez. That fire sparked an evacuation and burned about 50 acres of land, but it was under control within a few hours.

PG&E equipment also could be at fault for three other small fires that began that same day: the Cypress Fire in Oakley and two fires in Lafayette.

California wildfires:
$1 billion-plus in losses

PG&E went bankrupt in January after its equipment sparked deadly wildfires, and officials said the company is facing as much as $6.3 billion in after-tax costs in this year alone from the wildfires, its Chapter 11 case, and the recent blackouts.

PG&E reported a $1.6 billion loss for the third quarter alone, a loss that was fueled by a $2.5 billion pre-tax charge for claims related to the 2017 Northern California wildfires and the 2018 Camp Fire, company officials said in a statement. The Camp Fire killed 86 people – the most in a single wildfire in state history.

The earnings are the first PG&E has reported since its mass blackouts last month intended to keep power lines from sparking wildfires during windstorms, a move that drew outrage from state lawmakers and raised the specter of a government takeover. Despite the blackouts, blazes continued to erupt, and PG&E’s equipment has been identified as a possible cause of at least three.

California wildfires continue to put the heat on Pacific Gas and Electric, which has had its equipment blamed for five fires and recently reported a $1.6 billion loss for the third quarter.

California wildfires:
‘Significant liability’ likely

The biggest of those wildfires, the Kincade Fire in Sonoma County, began Oct. 23 shortly after PG&E equipment malfunctioned in the area. It took two weeks to fully contain.

While the cause has yet to be determined, it’s “reasonably possible” the company will incur a loss related to the blaze, PG&E said in a filing Thursday. “The utility could be subject to significant liability in excess of insurance coverage,” the PG&E filing said.

The prospect of more wildfire liabilities is critical for PG&E. Since filing for Chapter 11 in January, the judge overseeing the case warned that another big blaze blamed on its equipment would upend the bankruptcy and potentially wipe out shareholders.

California wildfires:
Bill credits for customers

PG&E officials said customers will receive bill credits totaling $90 million for the first of the widespread “public safety power shutoffs” last month. The utility already had announced – under pressure from California Gov. Gavin Newsom – that it would compensate customers for a deliberate blackout it imposed in early October.

The blackout, however, was plagued with communications problems as PG&E’s website crashed and its call center was overwhelmed.

The bill credits amount to an average of $122 for each of the 738,000 homes and businesses affected by the blackout, which began Oct. 9. Newsom had demanded $100 per household and $250 per small business. PG&E said it won’t offer compensation for any of the other power shutoffs it imposed in October, arguing that high winds buffeted its service territory.

California wildfires:
Claims deadline extended

Meanwhile, PG&E agreed to extend by two months the deadline to file damages claims against the company.

Attorneys for the victims asked to extend the original Oct. 21 deadline, arguing that tens of thousands of people eligible to receive payments from PG&E have not sought compensation. They said many survivors of the California wildfires still are traumatized and weren’t aware of their right to file a claim.

The deadline will be extended to Dec. 31 to increase participation, and the company is looking into setting up a claims center close to Paradise, which was virtually wiped off the map by the Camp Fire.