Pacific Gas and Electric Company (PG&E) is a major utility company in California, providing electricity and natural gas services to approximately 16 million people. It is one of the largest utility companies in the United States. Established in 1905, it is one of eight investor-owned electric utilities in California that are regulated by the California Public Utilities Commission (CPUC).
The company has been the subject of public scrutiny and numerous lawsuits over the years for its negligent role in several high-profile wildfires. PG&E has been accused of prioritizing profits over safety and failing to uphold even their own standards of operation. In recent years, PG&E has promised to enhance its safety measures and improve infrastructure resilience, though several government officials and the public have found the company’s efforts subpar.
PG&E equipment has been the cause of numerous wildfires in California, many of which were the result of criminal negligence and safety violations. For instance, PG&E was convicted of 739 counts of criminal negligence for the 1994 Trauner Fire for failing to trim trees near its power lines.
The utility company has been linked to some of the worst wildfires in California history, though the frequency is equally, if not more, appalling. A 2019 WSJ investigation attributed more than 1,500 fires from June 2014 to December 2017 to the utility’s equipment.
In 2016, PG&E was convicted of six felony crimes related to the 2010 San Bruno natural gas pipeline explosion that killed 8 people. The charges included obstruction of justice for lying about its pipeline testing policy and 5 violations of the Natural Gas Pipeline Safety Act of 1968. The company was put on a 5-year felony probation that started in January 2017, wherein the focus was on gas operations. However, following a string of fires in October 2017, the scope expanded to include electrical equipment, as well.
According to U.S. District Judge William Alsup in his final comments on the company’s probation, PG&E “neglected its duties concerning hazard-tree removal and vegetation clearance” for decades, even though “such duties were required by California’s Public Resource Code.”
Rehabilitation was the primary goal of probation, and though probation was lifted on January 25th, 2022, Judge Alsup strongly felt systematic problems remained. PG&E was still 7 years behind in vegetation maintenance, by his estimates, and almost all of the fires that sparked while the company was on probation involved hazardous trees.
Fires attributed to PG&E equipment from 2015 to present. Not a complete or comprehensive list. Fires may or may not have been related to violations of state law.
In California, utility companies can be held accountable for wildfire damages their equipment has caused, regardless of whether they are found to be negligent. During wildfire investigations, the cause of the blaze is determined, and if electrical equipment is involved, investigators will also determine whether any safety standards or protocols may have been violated. Depending on the findings, District Attorneys for affected counties may choose to file criminal charges against the utility company. Fines, restitution, probation, disallowances, and other punishments may result from criminal charges. Civil cases and claims can be filed by individuals, businesses, and other entities to recover monetary damages when a utility company or other entity is to blame. Finally, the California Public Utilities Commission decides whether any fire damages or wildfire mitigation costs incurred by utility companies can be passed onto customers. Typically, if the company is found to have acted recklessly and/or negligently, they are not allowed to pass on costs.
Since at least the 1990s, PG&E has been linked to various wildfires across the state. While not all were determined to be the company’s fault, PG&E has shelled out billions of dollars in settlements and claims for California wildfires. The utility managed to stay afloat through most of these financial woes, excepting a 2011 Chapter 11 bankruptcy due to rising energy costs and a more recent Chapter 11 bankruptcy in 2019.
PG&E filed for protection on January 29th, 2019, citing its wildfire liabilities from the 2015 and 2017 wildfires, as well as the deadly 2018 Camp Fire. The utility’s liabilities were estimated to be around $30 billion at the time, while PG&E said in a filing that it only had about $1.5 billion in cash and cash equivalents on hand. Chapter 11 bankruptcy is frequently referred to as a “reorganization” bankruptcy in which the “debtor” proposes a plan to reorganize the business and pay its debts over time. Typically, the debtor is also able to shed some of its debt.
On July 1st, 2020, PG&E emerged from bankruptcy. As part of the reorganization agreement, the company had to set up the Fire Victim Trust to settle damages with 70,000 victims of 24 wildfires between 2015 and 2018. The court approved the $13.5 billion PG&E financed account to be funded half in cash and half in PG&E stock. The utility also agreed to a new board of directors, more state oversight, and to not pay shareholder dividends for 3 years, which would have amounted to an estimated $4 billion. And if the utility failed to meet safety improvements, it could be sold or have its license revoked by the state.
Many people have expressed discontent with how the Fire Victims Fund was set up, specifically that its funding is tied to how the company fares in the stock market. While claimants were given a say in how the trust would be funded, many felt they didn’t have much choice. “They were given a yes-or-no, there weren’t other choices,” said investigative reporter Brandon Rittiman. Claimants are being paid pro rata (in equal proportion) and slowly in installments and are at the whim of PG&E stock prices. As of January 2023, 34% of claimants had yet to receive their first 45% payment. As of June 2023, the most any claimant had received was 60% of their claim amount. Many victims have been waiting years for their claims to be paid out and continue to struggle to rebuild their lives.
Governor Gavin Newsom signed AB 1054, also known as the California Wildfire Fund, in July 2019, which set up a fund of $21 billion in insurance protection for three of the state’s investor-owned utility companies. The fund, which would be paid for by a $10.5 billion contribution from utility shareholders and a $10.5 billion contribution from utility ratepayers, was created to encourage companies to prioritize safety, according to Newsom. The fund protects the utilities from bankruptcy by helping pay for wildfire damages that exceed $1 billion, so long as the companies acted reasonably and responsibly. If the utilities obtain a safety certification from the state, by implementing certain safety measures, they are presumed to have acted responsibly, unless a third party create’s “serious doubt” about the company’s conduct. PG&E was allowed to join this fund once it emerged from bankruptcy in 2020, which has yet to be used by any utility company. Learn more about the California Wildfire Fund and its controversies.
CAL Fire investigators determined the Dixie Fire started when a tree came in contact with PG&E power equipment. In September 2021, Singleton Schreiber McKenzie Scott filed two lawsuits against PG&E on behalf of over 200 victims. The lawsuits accused the utility of negligence for not cutting off power to the area where the fire originated, despite being aware of high-risk conditions.
In January 2023, Shasta County and nine other entities reached a $24 million settlement with PG&E for damages caused by the Dixie Fire. Reimbursement of FEMA and Cal OES funds were also part of the settlement.
CAL Fire investigators determined PG&E equipment caused the Kincade Fire, and the CPUC later identified 3 code violations related to PG&E’s equipment. In 2021, PG&E reached an agreement with CPUC to pay $125 million in penalties and permanent disallowances.
In April 2022, Sonoma County agreed to drop 33 criminal and civil charges in exchange for a $20 million settlement and the implementation of wildfire safety measures in the county. PG&E was ordered to hire at least 80 new wildfire safety-related positions in the county and pay just over $20 million to go towards non-profits, fire programs, civil penalties, and to reimburse the District Attorney’s Office for the costs of the investigation.
A civil lawsuit was filed in 2020 on behalf of individuals and businesses harmed by the Kincade Fire. On February 9th, 2023, California legislators introduced a bill to exempt survivors of the Kincade Fire from paying state income tax on settlement awards from PG&E.
The Zogg Fire was caused by a tree that fell on a PG&E transmission line. The utility reached a $150 million regulatory settlement with the CPUC in May 2023 for two regulatory violations. CPUC regulators alleged that the tree that fell on the line was marked for removal but PG&E did not remove it due to poor record keeping. PG&E challenged the regulatory agency’s findings, and the settlement reportedly does not resolve the dispute. The approved deal includes a $10 million fine and requires PG&E shareholders to contribute $140 million for better record keeping and vegetation management in high-fire risk areas, among other wildfire safety efforts.
PG&E avoided criminal charges in Shasta County, including 4 counts of manslaughter, with a $50 million settlement agreement. $5 million will be paid to Shasta County, and the remaining $45 million will go to local organizations assisting local recovery efforts and emergency services. The agreement also stipulated that PG&E must underground electrical wires and add additional weather stations in the area. The $50 million payment cannot be charged to customers or recovered in customer rates.
Shasta County District Attorney Stephanie Bridgett said holding PG&E criminally responsible was always the goal, but a tentative ruling found PG&E was not criminally negligent because it had not identified the tree as a potential danger before the disaster. As a result, prosecutors felt the case was too risky to take to trial.
PG&E also reached a $12.36 million settlement with public entities in Shasta and Tehama counties in 2021.
PG&E pled guilty to 84 counts of manslaughter and one felony count of unlawfully starting a fire for the 2018 Camp Fire. An investigation revealed the fire was sparked by an outdated PG&E power line. The company was fined $4 million and ordered to pay billions of dollars in settlement money to compensate victims, their families, and Butte County agencies.
Victims of the Camp Fire were set to have their claims paid out by PG&E’s Fire Victim Trust.
CAL Fire investigators determined PG&E equipment was the cause of at least 17 wildfires that ignited on October 8th and 9th, 2017 in Northern California. While it was determined that the Tubbs Fire was caused by customer equipment, the utility accepted liability for the fire during its 2019 bankruptcy proceedings. This was to avoid a civil trial brought by fire victims that challenged whether the Tubbs Fire was actually caused by PG&E.
Victims of the Napa, Sonoma, Humboldt, Butte, and Mendocino County fires were set to have their claims paid out by PG&E’s Fire Victim Trust.
Two separate civil lawsuits filed on behalf of property owners and residents in Placer and El Dorado counties are still pending.
A lawsuit filed by the Placer County Water Agency over the loss of power sales is still pending.
A joint lawsuit filed by Placer County, El Dorado County, El Dorado Water Agency, Georgetown Divide Public Utilities District, and Georgetown Divide Fire Protection District that seeks to recover taxpayer resources lost in the fire is still pending.
PG&E has estimated a $100 million overall loss from the Mosquito Fire.
There is a general consensus that PG&E has not done enough to mitigate its fire risks. Decades of neglect in which profits and executive compensation were prioritized over safety operations and maintenance are difficult to recover from, yet safety still does not appear to be PG&E’s number one priority.
Questions have been raised as to when “enough is enough” and whether intervention beyond legal repercussions is necessary. U.S. District Attorney William Alsup recommended the utility be split into two separate entities—one to serve High Fire Threat Districts and one (or more) to serve the rest. The California Community Choice Association (CalCCA) has called for CCAs to take over buying and generating electricity for communities, while PG&E transitions to a “wires-only” company.
After the San Bruno pipeline explosion in 2010, state regulators took a closer look at the company and found at least a decade’s worth of underspending on maintenance. NorthStar Consulting Group conducted an assessment of the company in 2016 to determine how PG&E was addressing its safety issues and observed the lack of a clear and comprehensive safety strategy.
Over the next several years, PG&E would cause the deadliest (2018 Camp Fire) and second largest (2021 Dixie Fire) fires in California history. In short, PG&E’s progress is slow and systematic problems remain. PG&E plans to spend over $18 billion on wildfire mitigation between 2023-2025. It spent roughly $14.25 billion from 2020-2022.
A major issue for safety has been PG&E’s outsourcing model. For many years, the utility has been delegating its responsibility for identifying and removing hazard trees, as well as maintaining vegetation clearances, to independent contractors. This practice has contributed to the wildfire problem as observed inspection and clearance work has been deemed “sloppy”.
PG&E has also attributed its large backlog of vegetation maintenance to a lack of available outside arborists. Judge William Alsup asserts that outsourcing, which PG&E has used to shield itself from liability, should be outlawed or restricted and that the company should’ve been required to hire and train more vegetation inspectors during its 5-year felony probation.
PG&E began implementing its Public Safety Power Shutoffs in 2019, after objecting vehemently to the Court’s proposal of such a program. The program aims to reduce the risk of wildfires caused by electrical equipment during hazardous weather conditions, such as strong winds and dry vegetation. Power is proactively shut off in certain areas to prevent electrical infrastructure from sparking wildfires.
This program is especially helpful for PG&E as a safety measure until miles of hazardous trees and vegetation can be cleaned up. The program prevented any distribution lines from sparking fires in 2019 (The Kincade Fire was started by a PG&E transmission line).
The PSPS program could have also prevented the 2020 Zogg Fire had PG&E maintained its safety protocols, according to Judge Alsup. Instead, the company watered down its criteria to leave power running in more circuits than before. Consequently, the Zogg Fire was sparked by a pine tree falling on a distribution line during a windstorm.
This was also not the first time that PG&E had done something like this. The transmission tower that caused the 2018 Camp Fire was almost 25 years too old by its own standards, yet no steps had been taken to replace it.
Utility companies regulated by the California Public Utilities Commission submit yearly Wildfire Safety Plans to the agency which were upgraded to Wildfire Mitigation Plans by SB 901 in 2018. In 2019, between its routine vegetation management and Enhanced Vegetation Management program, PG&E cleared 2,498 miles of distribution lines within High Fire Threat Districts. In 2018, only 760 miles were cleared.
PG&E cleared 1,878 miles in 2020, exceeding the 1,800-mile yearly target. However, on April 15th, 2021, the CPUC placed PG&E into the first step of an Enhanced Oversight and Enforcement Process. This was because the utility’s vegetation management work in 2020 was not prioritizing risk; the CPUC said PG&E was “not doing the majority of EVM work – or even a significant portion of work – on the highest risk lines.”
PG&E cleared another 1,983 miles in 2021 and completed Step 1 of the EOE process on December 1st, 2022. In its Mitigation Plan, PG&E said its, “EVM program goes above and beyond regulatory requirements for distribution lines by expanding minimum clearances and removing overhang in HFTD areas.”
PG&E’s system hardening plan includes “replacing bare overhead conductor with covered conductor, select undergrounding where appropriate, replacing equipment with equipment identified by the California Department of Forestry and Fire Protection (CAL FIRE) as low fire risk, upgrading or replacing transformers to operate with more fire-resistant fluids, and installing more resilient poles to increase pole strength and fire resistance.”
In 2019, the utility company planned to harden 150 circuit miles, 8.8 times the amount it had in 2018. Reports show it was able to harden 171 miles in 2019, 342 miles in 2020 (221 miles was the target), and 210 miles in 2021 (180 miles was the target).
The company plans to harden 7,100 miles by 2029 and underground 10,000 circuit miles of distribution lines in High Fire Threat Districts.
In 2021, PG&E announced a new safeguard called the Fast Trip Mitigation Protocol. PG&E reclosers were adjusted to “shut off power more quickly (and more often) when its monitors show a disturbance on the lines in High Fire Threat Districts.”
If these sensitivity settings had been adjusted earlier, it could have prevented the Dixie Fire. Instead, the tree fell on the distribution line that remained energized for the entirety of the 9 hours it took PG&E to reach it.
The incident also calls into question PG&E’s culture of keeping the meter running. Though the company did not know what caused the outage until personnel were on the scene, it was possible that a tree was the cause. Given the prolonged search for the problem, it would have been reasonable to exercise caution and manually de-energize the line.
Southern California utility SDG&E has implemented many changes in the past several years to mitigate its wildfire risk. Although smaller than PG&E, the company sets an example for implementing effective safety measures in a timely manner.
SDG&E says it has invested $1.5 billion into fire risk mitigation since 2007. During that time, the company fixed its equipment, cleared trees, and split its grid into smaller segments so it can shut off power in areas only with the highest fire risk.
The company also prioritized monitoring its system. SDG&E collects data from all of its poles and transmission towers, tracks weather conditions, and has 100 HD cameras across its network.
PG&E has prioritized its situational awareness in recent years, having installed over 1400 weather stations and 611 HD cameras by 2022. It is widely accepted, however, that PG&E has taken longer than it should have to implement these and other measures.