Utility company receives record $1.9bn penalty for role in Californian wildfires

Pacific Gas and Electric Company (PG&E) has been given a record US$1.937 billion penalty for its role in the 2017 and 2018 wildfires which swept through California’s wine country.

Last week, the California Public Utilities Commission (CPUC) announced that PG&E’s penalty was the largest it had ever assessed.

The regulators voted to impose the measure on the utility company for its role in the devastating Californian wildfires of 2017 and 2018.

However, the CPUC has stopped short of requiring payment of $200 million fine imposed on PG&E. This, it said, was to ensure that payment of the fine “does not reduce funds available to satisfy the claims of wildfire victims”. It also “permanently suspended” payment of the fine owing to PG&E’s bankruptcy negotiations.

The fires led to an estimated $30bn worth of claims against the company, pushing it into bankruptcy. It has now agreed to a bankruptcy exit plan and must raise tens of billions of dollars by 30 June in order to qualify for coverage by the wildfire insurance fund.

The $1.937bn figure includes around $1.8bn to be spent on wildfire-related expenditures and a further $114 million on corrective actions to protect public safety.

“The scope of the devastation caused by PG&E’s misconduct demands this record penalty,” commissioner Clifford Rechtschaffen said.

“It is one of many aggressive steps being taken by the CPUC to hold PG&E accountable for failing to keep public safety a top priority.”

According to CPUC documents, PG&E equipment played a role in igniting 15 fires which took place in 2017 and 2018, for which the California Public Utilities Commission’s Safety and Enforcement Division (SED) found violations.

In March this year, the utility company pleaded guilty to 84 counts of involuntary manslaughter in connection with the 2018 Camp Fire, which has been deemed the deadliest and most destructive wildfire in Californian history. It covered an area of over 60,000 ha, claimed the lives of 85 people and destroyed almost 19,000 structures, including the almost total devastation of the town of Paradise.

However, PG&E was not found to be responsible for all fires which took place during this period. For example, the deadly Tubbs Fire, which killed 23 people, has been found to have been caused by a private electrical system next to a residential home.