PG&E has been blamed for the Dixie Fire. Now what’s in store for the company?

Cal Fire confirmed this week what many in California already suspected: The Dixie Fire was caused by PG&E, when a tree fell onto the utility’s energized power lines last summer in a remote mountainous canyon.

The fire, which grew into the state’s second-largest blaze on record and burned for 3½ months through towns and forests of the northern Sierra Nevada, remains a stark display of the company’s unmet challenge to secure a safe electrical grid.

Whether Pacific Gas and Electric Co., blamed for similarly starting dozens of fires from the Wine Country infernos to the deadly Camp Fire in Butte County, can and will improve safety remains a question. Critics of the utility say the company is still doing too little to reduce fire risk while its regulators are not doing enough to hold it accountable.

Continuing investigations into the Dixie Fire will determine what consequences there might be for the company. Already facing criminal charges in Shasta and Sonoma counties for causing the 2020 Zogg Fire and the 2019 Kincade Fire, PG&E could face more criminal accusations as well as financial penalties, added scrutiny from state regulators and lawsuits from fire victims seeking compensation.

Some of the fallout, though, could be blunted by new state protections for investor-owned power companies. The fire will probably be the first test of California’s wildfire insurance fund, which helps utilities pay for damage when blamed for sparking wildfires — and a test of the California Public Utilities Commission’s role in evaluating whether the utility acted reasonably enough to deserve the partial bailout.

The Dixie Fire burned 963,309 acres, second in size only to the 2020 August Complex, clouding skies thousands of miles away with noxious smoke. The Gold Rush-era town of Greenville was reduced to ashen rubble. Tens of thousands of acres of commercial timberlands burned. Businesses shut down during the area’s critical tourism season.

PG&E executives have defended the company, saying there was little that could have been done to prevent the blaze, and the tree “was one of more than 8 million trees within strike distance to PG&E lines.” After the fire, the company pledged to bury 10,000 miles of power lines.

“Regardless of today’s finding, we will continue to be tenacious in our efforts to stop fire ignitions from our equipment and to ensure that everyone and everything is always safe,” PG&E officials said in a statement Tuesday.

Butte County District Attorney Michael Ramsey said his office is leading a criminal investigation on behalf of Butte and four other counties: Plumas, Lassen, Tehama and Shasta.

Though his county suffered the least damage of the four counties from the Dixie Fire, Ramsey said county attorneys are “taking the lead as, unfortunately, we have the most experience in this area of the law — reckless arson.”

Ramsey’s office led the successful prosecution of PG&E for the 2018 Camp Fire, which killed 84 people and destroyed the town of Paradise. Former PG&E executive Bill Johnson, on behalf of the company, pleaded guilty in 2020 to 84 counts of involuntary manslaughter and one count of illegally setting a fire, the result of a felony plea deal that included a $3.5 million fine.

In that case, investigators said the fire started when a decrepit hook the company had failed to replace snapped off a transmission tower amid a windstorm, sending a high-voltage line buzzing to the ground.

For the Dixie Fire, Ramsey said his prosecution team has, in some ways, a more complicated task.

The fire started July 13, a mild, blue-sky day when a 100-foot-tall Douglas fir fell, taking power lines down with it in the Feather River Canyon near Cresta Dam, not far from the area where the Camp Fire started, according to Cal Fire. Ten hours passed from the time PG&E first detected an issue with the line and when a repair person reached the remote area, slowed by a bridge closure and dirt roads, and saw a small patch of flames.

Prosecutors must prove the utility was responsible for the tree that took the power lines down, which involves an examination of the utility’s vegetation management procedures in addition to technical information about trees and electric systems, Ramsey said.

The PG&E employee who first reached the remote area of the fire said the tree appeared healthy, though the company shared in federal court that a PG&E arborist later said a photo of the tree showed one of its eight roots having signs of internal rot.

Prosecutors are also examining PG&E’s response to the fire.

“That tree was on the line for 10 hours — had PG&E done something more expeditiously to turn off the power to that line, would that have changed the outcome, and does that represent reckless negligence?” Ramsey said.

That point has been questioned by U.S. District Judge William Alsup, who is overseeing the utility’s criminal probation for a 2010 gas line explosion in San Bruno. After the Dixie Fire, PG&E revealed it had ranked that stretch of wires the 11th highest at risk of starting a fire — out of 3,635 circuit sections. Alsup has asked the utility to explain its procedures for handling one of its most risky circuits.

Catherine Sandoval, who served on the California Public Utilities Commission and is an associate professor at Santa Clara University School of Law who represents ratepayers in the probation hearings, said the utility apparently didn’t make that information available to employees making decisions about whether to cut power — an element she believes shows negligence.

Sandoval said a similar scenario played out for the Zogg Fire in Shasta County, which killed four people and destroyed more than 200 homes, when PG&E detected a disruption in power and later found a pine tree had fallen on lines.

“PG&E failed to learn from the Zogg Fire,” Sandoval said.

The Dixie Fire burned on federal lands, and the U.S. Attorney’s Office for the Eastern District of California served PG&E with a subpoena in October for documents related to the fire, signaling a federal investigation was also under way.

California’s new wildfire insurance fund, established in 2019 to protect investor-owned utilities from financial ruin in the wake of disastrous wildfires, could help cover some of the damages. This requires the PUC to find the company’s actions and operations related to its management of the circuit that started the fire to have been “reasonable.”

To gain access to the fund, the state’s three participating utilities — PG&E, Southern California Edison and San Diego Gas & Electric — must contribute half of the $21 billion eventually slated to make up the pool of money available for payouts. The other half comes from ratepayers through a monthly charge on bills from 2020 through 2036.

The Dixie Fire would be the fund’s first payout, designed to cover damages that exceed $1 billion, the amount utilities are required to cover through insurance.

The commission could also ramp up its efforts to monitor PG&E, according to Mark Toney, executive director of The Utility Reform Network consumer group. The same legislation that established the wildfire fund, AB1054, created new avenues for state regulators to monitor operations.

Toney questioned at what point the commission would take a stronger stance toward the utility.

“We’re worried the CPUC hasn’t been strict enough with PG&E,” Toney said. “We’re worried that the concerns of Wall Street investors are taking precedent over what’s good for ratepayers and what’s good for residents.”

Michael Wara, director of Stanford University’s climate and energy policy program and a member of the California Catastrophe Response Council, which oversees the wildfire fund, credited PG&E with making improvements to its policies and infrastructure, but he said those advances haven’t yet met the pace of an increasingly volatile climate with fire-prone weather and overgrown forests.

“The track record coming out of PG&E shows progress, but it is running on a treadmill that keeps speeding up,” Wara said. “The situation is getting more and more dangerous and less tolerant of any error.”

Plumas County Supervisor Kevin Goss said holding PG&E accountable for the fire that destroyed Greenville “is crucial.” With high rates of insufficient insurance or no insurance among residents and business owners, the community is already facing steep hurdles to rebuild, he said.

Goss said he believes the Dixie Fire is yet another example of how the utility has failed to update its equipment or prepare sufficiently for drought conditions across the state — actions that have left forested communities in the crosshairs.

“I really implore PG&E to put together a different strategy, a new strategy,” Goss said. “Unfortunately it’s after the fact for us.”