Who Will Pay For California's Deadliest Wildfire?

By Steve Goldstein
Published: Thursday, May 16, 2019 - 2:05pm
Updated: Friday, May 17, 2019 - 8:38am

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Camp Fire
inciweb.nwcg.gov
The Camp Fire in California on Nov. 19, 2018.

STEVE GOLDSTEIN: It's been confirmed by fire investigators that electric power lines were a major part of the cause of California's deadliest wildfire. The Camp Fire started in Paradise, California last November and killed 85 people burning around 150,000 acres and destroying nearly 19,000 buildings. The power lines are owned and operated by Pacific Gas and Electric or PG&E. The utility company is the largest electric company in California. The finding wasn't unexpected though as the company had said in February its own investigation pointed to its power lines along with dry vegetation as possible culprits. With me to tell us more about what we know now is Ben Adler, capital bureau chief at Capital Public Radio in Sacramento. So Ben let's get down to specifics on this. How did these power lines in fact helped cause this fire?

BEN ADLER: Well this was a really dry, windy day in November, and it had been months since rain had last fallen in this area in Butte County, about an hour or so north of Sacramento, a couple hours north in northern California. So it was ripe fire conditions, and the power lines did not make things any easier. They apparently had a couple of situations: One, a transmission tower that sparked, and then Cal Fire says there was a second ignition point that in the end was swallowed up by the first, and that second ignition point involved vegetation and electrical distribution lines. So you've got these two incidents that really got this fire going and sent it rolling through the territory there.

GOLDSTEIN: Was PG&E properly maintaining its equipment maintaining its lines? Was this a situation that perhaps perhaps could have been prevented or at least made less dramatic?

ADLER: There are billions of dollars riding on the answer to that question, and we don't know publicly to what extent that is the case or not. That is going to determine whether every Californian who is a customer of PG&E — so ratepayers residents and businesses and industries — pay for this. In the end, or if PG&E shareholders pay under at least under current California state law, and is certainly possible that that law will change between now and that means it will take many years for this process to go through. For example in San Diego there was a big wildfire in 2007 —actually three fires — and it took 10 years before state utility regulators made the determination that San Diego Gas and Electric, which is part of Sempra Energy, could not pass the cost on to ratepayers because they should have done more work on the electrical equipment to prevent those wildfires.

GOLDSTEIN: Now PG&E has filed for bankruptcy. Is the camp fire — is what's going on with that — is it connected in any way with the bankruptcy, or is PG&E been struggling in other ways for a long time?

ADLER: Yes. The answer to both of those questions is yes. PGE has absolutely been struggling, much, their critics say, of their own making. There was a large gas explosion just south of San Francisco many years ago that PG&E was found criminally liable for. Not just a regular investigation, but they were convicted of a felony in a court. And they're under some federal oversight as a result. PG&E suspected that this wildfire in the Paradise area was going to end up being its electrical equipment, and they were already potentially headed toward bankruptcy even before that. But now, as a result, I think they felt they had no other option.

GOLDSTEIN: So what do we know about the new PG&E CEO, and what actions he can or wants to take — was there a full mea culpa — and do people really care about that at this point?

ADLER: Well coincidence or not, and we can all make our guesses, this report was released yesterday right when the PG&E CEO was testifying to a state legislative committee. The odd thing was that if the hearing room seemed to be disconnected from the real world. It took at least an hour for anyone to get word to the lawmakers up on the dais doing the questioning that this news had broken maybe you should ask the PG&E CEO about it. When they finally did, he said look, we'd been assuming that this was us. And in another portion of the testimony, he said he does think that that shareholders should pay their fair share in addition to ratepayers for for things that had happened in the past. They are looking for different rules moving forward. California's liability law is such that even if PG&E is not negligent but it is still liable for a fire that its equipment starts, again the question is you pass on the ratepayers or keep it for shareholders to pay. And either way, PG&E's financial stability is challenged, and so is the ability of ratepayers to pay their power bills. So PG&E CEO is saying look this this isn't sustainable, and you know we need to be more safe, and we need to prove it to you. But there are many proposals under consideration at the state capital including some state fund that would be able to absorb these fire the cost of these damages if and when they occur.

GOLDSTEIN: Is this something that is going to linger with folks — not just there who had their homes destroyed — but sort of in a in a general sense about the impact of these wildfires? And in some ways is that going to make it an even harder climb for PG&E because their reputation is hurt even more because of this absolute devastation that people can see with their own eyes?

ADLER: You know, there is a lot of anger toward PG&E. That's why they didn't get the change in liability law last year that they asked for, and even former Governor Brown said, you know, we really ought to take a look at this. But the bottom line is this is, you know, as everyone is saying, the new normal. With with hotter temperatures and less rain, although there was a very wet winter this year, you're going to get a lot more of these fires in California. There's so many homes built in high fire risk areas right now, there are going to be more of these fires, and the state is working on preventing them as best they can by forest thinning and trying to figure out how to pay for these fires when they do happen. And there is anger toward PG&E, but there's also the reality that shifting all the blame on PG&E may feel good but it's not going to prevent the next fire.

GOLDSTEIN: Ben Adler is capital bureau chief at Capital Public Radio in Sacramento. Ben, thanks for your insights. Great to talk with you.

ADLER: You're welcome.

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