California’s two largest electric utility companies are under investigation again for their role in starting major wildfires in the state. But the companies are probably less worried about how the devastating fires could impact their finances after state lawmakers passed legislation earlier this year to protect the companies and their shareholders from full financial liability.
Pacific Gas and Electric (PG&E), already facing lawsuits and fines for its role in causing devastating wildfires in previous years, owns the transmission lines that may have caused the Camp Fire in Northern California, the deadliest wildfire in California history.
And in Southern California, state regulators are investigating the possible role played by Southern California Edison (SoCalEd) in the massive Woolsey Fire currently burning in Los Angeles and Ventura counties, California.
California lawmakers, however, are growing frustrated with electric utilities’ alleged role in the state’s wildfires. State Sen. Jerry Hill (D) is looking into legislation that would break up the state’s investor-owned utilities or turn them into public power utilities following reports about how equipment owned by PG&E and SoCalEd may have started the Camp and Woolsey fires, KQED reported Sunday.
“If PG&E is found responsible for burning down the state again, at some point we have to say enough is enough and we have to ask should this company be allowed to do business in California?” said Hill, who represents an area of Northern California south of San Francisco, the Associated Press reported.
"Revoking their charter, their license, their ability to be a monopoly … I think that should be under serious consideration."
Says he will look at legislation to break up utility.
— Jeremy Siegel (@jersiegel) November 11, 2018
Hill’s district was the site of the deadly 2010 San Bruno natural gas pipeline fire and explosion. In 2017, a federal judge imposed a $3 million fine, five years probation and forced PG&E to run ads informing the public about its role in the explosion.
Earlier this year, the California Department of Forestry and Fire Protection (Cal Fire) released a report that found electric equipment owned by PG&E caused 12 wildfires that killed 18 people and burned hundreds of square miles in October 2017.
The Camp Fire in Butte County has burned 113,000 acres and resulted in at least 42 deaths. As of Monday evening, the fire was 30 percent contained, according to Cal Fire. The Woolsey Fire has burned more than 91,000 acres in Los Angeles and Ventura counties with an estimated 370 structures destroyed and at least two people killed. As of Monday evening, the fire was 30 percent contained.
Even if the utilities are found to have played a major role in the two wildfires, new legislation passed earlier this year could offer them some financial protection. In September, California Gov. Jerry Brown (D) signed wildfire reform legislation that included changes to wildfire liability laws that protect utilities from bearing the full financial burden when their equipment is found to have caused wildfires.
Residents and consumer advocates complained that state lawmakers who voted for the legislation are more concerned about how wildfires could harm shareholders of utility companies like PG&E than how the change in law would raise electricity prices for the company’s customers.
The law made it easier for utilities to pass along costs from fire-related damages to their consumers and also avoid possible bankruptcy from a series of major fires that occurred during the 2017 fire season.
It remains unclear how the law will impact electric utilities for damage caused by wildfires in 2018. The new law created two mechanisms for the state’s investor-owned electric utilities — PG&E, SoCalEd, San Diego Gas and Electric — to shift the costs of wildfire lawsuits onto their customers. One process begins in 2019, and the other process covered lawsuits that resulted from the devastating 2017 wildfire season.
But the new law kept the previous rules in place for the 2018 wildfire season. Given their willingness to protect electric utilities from financial costs for the record 2017 wildfire season, it is likely the California Legislature will go back and pass a law that offers electric utilities protection from the huge financial costs of the 2018 wildfire season.
PG&E could be facing huge costs if it is determined that its equipment caused the Camp Fire. A day before the Camp Fire started, PG&E contacted a local resident, Betsy Ann Cowley, about accessing her property due to the company’s power lines causing sparks. In an email communication with Cowley, described to the Associated Press, PG&E told her “they were having problems with sparks.”
The next day, the fire started near Cowley’s property and then traveled to neighboring Paradise, California — town of nearly 27,000 people — that was almost completely destroyed.
Firefighters on Monday declared the area surrounding the power lines on Cowley’s property a crime scene.
Last Friday, PG&E told the California Public Utilities Commission (CPUC) that it had detected an outage on an electrical transmission line near the site of the fire. The area where CalFire says the fire started and where PG&E says sparks were detected on Cowley’s property is roughly the same, according to the AP report.
Meanwhile, SoCalEd also reported an outage near the spot where authorities say the Woolsey Fire started last week. Authorities say the fire started during the afternoon last Thursday, near Woolsey Canyon, east of Simi Valley. Later that day, the utility notified the CPUC that it had experienced an outage two minutes before the fire reportedly started at 2:24 p.m. PT.
In a statement, SoCalEd said it has been in communication with the CPUC with respect to these fires and has submitted an initial electric safety incident report on the Woolsey Fire.
“The information in the report is preliminary. There has been no determination of origin or cause of either wildfire,” SoCalEd said. “SCE will fully cooperate with any investigations.”
PG&E has provided an initial electric incident report to the CPUC. The utility said it will fully cooperate with any investigations, although it emphasized there has been no determination on the causes of the Camp Fire.