PG&E probation judge demands details after utility equipment seized in wildfire investigation

Dive Brief:

  • California state investigators have taken possession of Pacific Gas & Electric (PG&E) equipment as part of an ongoing investigation into the origin of a Northern California wildfire that began in late September, the utility reported on Friday.
  • The federal judge overseeing PG&E’s five-year probation ordered the utility on Monday to explain its role in the ignition of the Zogg Fire, as well as provide more information on the equipment — and vegetation management practices in the area it was installed — by Oct. 26.
  • PG&E’s report comes months after it exited a 17-month-long Chapter 11 bankruptcy proceeding, which was initiated due to liabilities from previous wildfires caused by its power lines in 2017 and 2018. But the utility is still exposed to wildfire risk, experts have said, as well as soaring fire insurance costs.

    Dive Insight:

    PG&E’s bankruptcy exit was based on a $25.5 billion payout to resolve its fire liabilities, including a $13.5 billion trust to compensate victims of the wildfires. The company also agreed to an $11 billion settlement with insurance companies that held wildfire claims and another $1 billion payment to local government entities impacted by the blazes.

    The Zogg Fire, which began in late September, caused four fatalities and burned more than 56,000 acres, destroying around 204 residential, commercial and other structures as of Monday, according to the California Department of Forestry and Fire Protection (Cal Fire).

    The area around the Zogg Fire is served by a 12 kV PG&E distribution line, according to the report. On Sept. 27, the day the fire began, a PG&E smart meter and line recloser reported “alarms and other activity,” according to the incident report — coinciding with the time that camera and satellite data identified smoke, heat or signs of fire in the region. On Friday, Cal Fire informed PG&E that it had taken some of the utility’s equipment in the area as part of its investigation.

    On Monday, U.S. District Judge William Alsup, who is supervising the five-year criminal probation placed on PG&E after a 2010 natural gas pipeline explosion in Northern California, ordered the utility to provide the court with information on its role in sparking the fire, the specific equipment that is part of the investigation, as well as “the extent of trimmed and untrimmed vegetation” where the equipment is installed. Alsup has previously included requirements related to vegetation management in the terms of the utility’s probation — most recently in August, when the judge required PG&E, among other things, to recruit in-house inspectors to oversee its processes.

    Other California investor-owned utilities face similar financial risks from wildfires. In September, S&P Global Ratings issued research updates revising to negative the outlook for PG&E and parent company PG&E Corp, San Diego Gas & Electric as well as Southern California Edison and parent company Edison International. California is in the midst of an unprecedented wildfire season, which increases the likelihood that a utility could spark a catastrophic wildfire, the ratings agency said.

    After the series of utility-caused wildfires in 2017 and 2018, California lawmakers created a $21 billion wildfire insurance fund, which included contributions from both ratepayers and utility shareholders. However, that fund could be depleted sooner than anticipated given the acreage and damage wrought by fires in the state this year, S&P noted last month.

    In an emailed statement, PG&E spokesperson Lynsey Paulo said the information in the incident report is preliminary, and the utility is cooperating fully with Cal Fire’s ongoing investigation, which has not yet officially determined the cause of the Zogg Fire.

    “We recognize the tragic losses sustained as a result of this year’s fire season and are thankful, as always, for the efforts of thousands of first responders who have worked tirelessly to contain the fires and protect the lives and property of California residents,” Paulo added.

    Mindy Spatt, communications chief with ratepayer advocacy group The Utility Reform Network, said in an email that it looks like the utility has “once again failed miserably and murderously to deliver the safe reliable service customers are entitled to.”

    “While we don’t know what this investigation will reveal, we do know that four people died in this fire, and that PG&E had indications of problems on its lines shortly before the fire started,” Spatt said.