San Diego power company pays $14M to state for starting huge fires in 2007

San Diego Gas and Electric (SDG&E) has agreed to a settlement with the California Public Utilities Commission to pay $14.3 million for starting the Witch, Rice, and Guejito fires in eastern San Diego County in 2007. Cox Communications agreed to pay $2 million without admitting they started the Guejito fire.

Here is an excerpt from a report in the San Diego Union Tribune.


San Diego Gas & Electric and Cox Communications agreed Friday to pay $17 million to settle claims by state investigators that their shoddy maintenance led to three huge North County wildfires two years ago. SDG&E also apologized for obstructing investigators looking into the cause of the fires.

The companies did not admit fault for setting the fires, but said they would take steps to better maintain their lines and equipment. The settlement comes more than a year after investigators with the Public Utilities Commission concluded that power lines caused the Witch Creek, Guejito and Rice Canyon fires.

The fires burned more than 1,300 homes, killed two people and disrupted the lives of hundreds of thousands.

SDG&E agreed to pay $14.3 million to the state’s general fund and reimburse the PUC’s Consumer Protection and Safety Division up to $400,000 for a computer system designed to help investigate utility safety hazard incidents. The money will come out of SDG&Es profits, not from ratepayers.

As for the obstruction allegation, the company said it knows it has an “obligation and duty to respond promptly” when investigators need information and access to its workers. “SDG&E admits that its efforts fell short of meeting this obligation and duty in connection with the CPSD’s investigations into the Witch, Rice and Guejito fires and apologizes for permitting this to happen. SDG&E will conduct additional training in this area,” the company said in the settlement.

It also said it failed to file timely reports on the fires. In a statement, SDG&E President Debra Reed said the company wants to move on.

“We are settling this matter to put the issue behind us and avoid the costs and risks of further litigation,” she said.  “As part of this settlement, we maintain that our system met all compliance and safety requirements, but we fell short of meeting our obligations with respect to three follow-up reports,” she said. She did not mention the apology.

Cox, meanwhile, agreed to pay $2 million to the general fund, without admitting that it caused the Guejito fire. Investigators said a Cox lashing wire came loose in high winds and caused arcing when it came in contact with an SDG&E power line.

“We believe that our line was properly maintained and intact prior to the Santa Ana winds in 2007, and did not cause the Guejito fire,” Cox said in a statement. “The CPUC has a long history of handling disputes through agreements, and we entered into this agreement in an effort to move forward and stay focused on the business of serving our customers and our community.”

The settlement does not affect the ongoing litigation in San Diego Superior Court in which hundreds of fire victims as well as governmental agencies are seeking damages from SDG&E. Earlier this year, SDG&E settled many claims, paying out more than $740 million to dozens of insurance companies seeking partial reimbursement for money they had already paid to clients.

However individual fire victims have yet to be compensated for losses beyond whatever insurance they may have had, and numerous governmental agencies such as CalFire and the city and county of San Diego are still trying to recover millions of dollars in fire fighting costs and other damages.

SDG&E has asked the PUC for permission to raise rates to pay for damages beyond what its insurance covers, and for higher insurance costs because of the fires. Lawyers involved in the case say it could still be years before the litigation ends.

SDG&E has not admitted responsibility for the fires. At some point a judge will have to schedule a trial or trials to determine whether SDG&E is liable.