Reported from the San Francisco Chronicle: https://www.sfchronicle.com/business/article/Fingers-point-at-PG-E-in-Wine-Country-fires-12762854.php
California investigators have not — repeat, not — blamed last fall’s deadly Wine Country wildfires on Pacific Gas and Electric Co. power lines.
But as the sixth-month anniversary of the disaster approaches, many state officials act as if it’s a foregone conclusion. At times, so does PG&E.
Not content to wait for the California Department of Forestry and Fire Protection, or Cal Fire, to wrap up its investigation, public officials are taking steps that would make little sense if, say, arson or a few errant campfires sparked the flames.
Napa, Sonoma and Mendocino counties have sued PG&E, with county supervisors saying they’d seen enough evidence to convince them that the fires started with the company’s power lines, tossed about by a fierce windstorm.
A California Senate subcommittee held a nearly daylong hearing on whether the state and utility companies are doing enough to prevent wildfires. The California commission that regulates utilities held another.
Meanwhile, PG&E Corp., the parent company of Pacific Gas and Electric Co., suspended its dividend in December,saying it needed to stockpile cash in case it’s held financially responsible for damages that are now estimated to top $10 billion. The company made $1.7 billion profit last year on $17.1 billion in revenue, and investors have driven down the stock price, anticipating a hit.
Lawmakers say PG&E lobbyists in Sacramento are pushing for legislation that could help the company avoid paying fire damages, so long as it isn’t found negligent in the maintenance of its equipment.
The legislation and lawsuits may seem premature, given that Cal Fire’s official investigation remains open. The California Public Utilities Commission, PG&E’s regulator, is also conducting an investigation.
In the months since the fires erupted, no evidence has emerged in public pointing to any explanation other than power lines swaying, arcing and falling in the wind. Absent another likely cause, policymakers and investors are assuming that PG&E’s equipment had at least something to do with the catastrophe — and they’re moving on to the next steps.
“All the reports are not in now, but there are telltale signs that it was our power grid causing a lot of these fires,” said state Sen. Bill Dodd, D-Napa, whose district covers much of the North Bay.
He has introduced legislation — SB 901 — that would force utilities to preemptively shut down power lines during times of high fire risk, although it would be up to the companies and the utilities commission to hash out the criteria for doing so. He thinks it’s an idea worth pursuing even if Cal Fire eventually pinpoints a different cause for some or all of the fires.
“That wouldn’t change the calculus of me running this bill at this time,” said Dodd, D-Napa. “I still think this is a prudent way of helping prevent wildfires.”
Similarly, PG&E spokesman Keith Stephens said the company believes Sacramento should be addressing the “new normal” of longer and more destructive fire seasons, regardless of how the Cal Fire investigation turns out.
The company welcomed a statement Tuesday from Gov. Jerry Brown and legislative leaders that they would work to update the state’s liability rules for utilities, as part of a series of steps to improve California’s resilience in the face of disasters and global warming.
“It’s clear that California needs much broader reforms that recognize the mutual interests of customers, investors, insurers, utilities and others as we work together to address the impacts of climate change, including more frequent wildfires,” Stephens said.
As for the causes of the Wine Country fires, “We’re not going to speculate, and there’s been no determination,” he said.
Cal Fire has given no firm timeline for finishing its work. The agency’s meticulous investigations typically take many months. A Cal Fire spokesman would say last week only that the probe remains ongoing.
And yet, some causes of other California wildfires have been named by investigators relatively quickly.
For example, less than a month after the 2013 Rim Fire ravaged part of Yosemite National Park, the U.S. Forest Service announced that it started with a hunter’s campfire. And in December, the Los Angeles Fire Department took less than a week to blame the Skirball Fire in Bel-Air on a homeless encampment’s cooking fire, blown out of control by the wind.
In addition, since the North Bay fires began on Oct. 8, fire investigation experts have told The Chronicle that the pattern of ignition — with multiple blazes breaking out in a short span of time across a wide geographic area — pointed to either a lightning storm or power lines blasted by high winds. No lightning strikes were recorded in the North Bay the night the fires began.
Attorney John Fiske, who represents the counties of Mendocino, Napa and Sonoma in their litigation against PG&E, said the lack of another likely explanation surfacing during the last few months was one of the reasons his clients decided to sue.
“In other fires there may have been a car accident, a homeless camp, a hunter, and we didn’t see anything like that here,” said Fiske, with the Baron & Budd law firm.
PG&E, for its part, has tried to cast blame for the deadliest North Bay blaze, the Tubbs Fire, on power lines owned and operated by someone else. Otherwise, the company reminds anyone who asks that the Cal Fire investigation remains open.
At the same time, however, PG&E has taken steps to protect itself if investigators do determine that power lines started the fires.
The company and its CEO, Geisha Williams, have begun an effort to shield utilities from a legal doctrine called “inverse condemnation,” under which they can be held liable for economic damages tied to their equipment even if they followed all of the state’s safety rules. PG&E lobbyists are seeking state legislation that would exempt utility companies from the doctrine, said Sen. Jerry Hill.
“They want it done before the investigations are complete and the causes have been identified,” said Hill, D-San Mateo. No legislation on the subject has been introduced yet.
Wall Street already assumes that PG&E will pay for the fires, said Travis Miller, director of utilities research at the Morningstar financial research firm. The company’s stock has been punished accordingly.
“You look at the performance of the stock since the fires began through today, and there’s no doubt the market is pricing in a substantial liability,” Miller said.
PG&E stock surged after Gov. Brown’s announcement last week about possibly changing the state’s liability rules for utilities. The company’s stock jumped 8 percent to top $45 within hours of the release.
The week before the fires broke out, PG&E stock was trading above $68 per share.
“Things were looking quite bright for PG&E — up until last fall,” Miller said.