Power company agrees to pay $686 million for fires

San Diego Gas and Electric, SDG&E, whose power lines started three huge fires in southern California in 2007, has agreed to pay $686 million to insurance companies that paid claims to their customers for the Witch Creek, Guejito and Rice Canyon fires.

Here are some excerpts from the Union-Tribune:

The money will be paid directly from SDG&E’s own liability insurance carriers to 65 homeowners insurance companies. About 20 more insurance companies are still in negotiations with SDG&E, the utility said, and the final settlement could reach $900 million.

“SDG&E does not acknowledge any fault or liability,” [SDG&E spokesperson Stephanie Donavan]  said. The fires were caused, she said, by the extreme weather conditions that existed in late October 2007. Donovan said the company thought the settlement was prudent, in part to spare the expense of a lengthy trial.

Combined, the Witch Creek, Guejito and Rice Canyon fires killed two people and destroyed more than 1,300 homes in Ramona, Fallbrook, Rancho Bernardo, Poway, Rancho Santa Fe and other communities.

Two state investigations found that arcing SDG&E power lines started each fire. The investigations also blamed, in part, Cox Communications equipment for starting the Guejito fire, which is believed to have been the blaze that burned into Rancho Bernardo before merging with the Witch Creek fire.

Donovan said that as part of the settlement, SDG&E has bought the claims that the insurance companies have against Cox and said the utility will aggressively seek compensation from Cox in a lawsuit that has already been brought.

So the fires were caused by “extreme weather conditions”? Does she mean lightning? No. Strong winds exposed weaknesses in the design and maintenance of the power lines.