Facing liability over wildfires, PG&E to file for bankruptcy

The company may have $30 billion in potential liability costs related to their role in starting wildfires

PG&E service territory
Map showing the service area of Pacific Gas & Electric, and the land protected by CAL FIRE (State Responsibility Area).

Pacific Gas and Electric has announced that it will file for Chapter 11 protection before the end of the month as it faces $30 billion in potential liability costs related to their role in starting wildfires. The company already carries a heavy debt load of more than $18 billion.

A dozen of the fires that started in Northern California around October 8, 2017 have been blamed on PG&E’s electrical equipment, according to CAL FIRE investigators, who also are looking into power line equipment failures that may have caused the Camp Fire on November 8, 2018. Over 40 people died in the Northern California fires, and 86 perished in the Camp Fire which also destroyed more than 14,000 homes.

The bankruptcy process would put a halt to more than 750 civil suits brought by thousands of homeowners and insurance companies over the wildfires allegedly caused by PG&E’s equipment, some of it 100 years old. The suits would then be resolved in a bankruptcy proceeding.

PG&E supplies power and natural gas to approximately 5.2 million households in the northern three-fourths of California. The company also declared bankruptcy in 2001 which lasted until 2004.

State law requires the corporation to notify employees at least 15 days before any bankruptcy filing. Chief Executive Geisha Williams has stepped down after serving for less than two years, the company said on Sunday.

In a brief submitted to a federal court in December, the California Attorney General said PG&E could be prosecuted for murder, manslaughter, or lesser criminal charges if investigators determine that “reckless operation” of its power equipment caused any of the wildfires in which people were killed during the previous 15 months.

Wildfires: Attorney General says PG&E could face murder charges

Depends on which charges, if any, are filed by county district attorneys for causing wildfires in 2017 and 2018

In a brief submitted to a federal court, the California Attorney General wrote that Pacific Gas & Electric could be prosecuted for murder, manslaughter or lesser criminal charges if investigators determine that “reckless operation” of its power equipment caused any of the wildfires in which people were killed during the last 15 months.


A dozen of the fires that started in Northern California around October 8, 2017 have been blamed on PG&E’s electrical equipment, according to CAL FIRE Investigators, who also are looking into power line equipment failures that may have caused the Camp Fire on November 8, 2018. Over 40 people died in the Northern California fires, and 86 perished in the Camp Fire. More than 14,000 homes were destroyed in the Camp Fire.

Shortly after both events the stock price of PG&E dropped precipitously, sinking 66 percent over the 13-month period. It took several days in 2017 for word to spread that the company appeared to be liable for the Northern California fires, but the sell-off began the day after the Camp Fire started in 2018. Investors are worried that the utility could be on the hook for billions of dollars in civil damages in addition to criminal penalties.

Stock price PG&E california fires wildfires liable

Below is an excerpt from the Sacramento Bee:

The legal brief submitted by [Attorney General Xavier] Becerra’s office said prosecutors would have to gauge PG&E’s “mental state” before determining which charges, if any, to bring. The charges would range from murder to a misdemeanor negligence charge, according to the brief. Becerra’s brief is purely advisory; if any criminal charges are filed, they would likely be lodged by county district attorneys, not the state.
So far, though, district attorneys have shown little appetite for prosecuting PG&E, according to Sacramento Bee reporting. No charges have been filed yet in the wine country fires. And at least one DA has opted for a financial settlement in lieu of criminal prosecution

Prosecutors looking at a dozen fire investigations that could implicate PG&E

camp fire smoke column
The Camp Fire, Friday morning November 9, 2018. SJSU FireWeatherLab.

Already on probation after the 2010 San Bruno gas line explosion that killed eight, injured 58, and destroyed 38 homes, the Pacific Gas and Electric Company could be responsible for causing November’s Camp Fire at Paradise, California and 12 other Northern California blazes that burned thousands of houses in 2017.

CAL FIRE investigators are looking at two possible PG&E power line failures that may have ignited the Camp Fire resulting in the deaths of 86 people. The agency has already prepared investigation reports on 12 fires from last year for which they believe PG&E likely violated state laws. It is now up to the seven county prosecutors and the state Attorney General to determine if they are going to file criminal charges.

PG&E’s actions before and after the gas line explosion in 2010 could be noted in combination with the recent fires likely caused by the electrical equipment, leading to additional probation controls imposed by the court.

Below is an excerpt from Wikipedia about the federal charges related to the gas line explosion:

“On April 1, 2014, PG&E was indicted by a federal grand jury in U.S. District Court, San Francisco, for multiple violations of the Natural Gas Pipeline Safety Act of 1968 relating to its record keeping and pipeline “integrity management” practices. An additional indictment was issued by the grand jury on July 29, 2014, charging the company with obstruction of justice for lying to the NTSB regarding its pipeline testing policy, bringing the total number of counts in the indictment to 28. Under the new indictment, the company could be fined as much as $1.3 billion, based on profit associated with the alleged misconduct, in addition to $2.5 billion for state regulatory violations.

“On January 21, 2017, PG&E was fined $3 million and ordered to perform 10,000 hours of community service for criminal actions of violating the Natural Gas Pipeline Safety Act and for obstruction of justice. In addition, it must institute a compliance and ethics monitoring program and spend up to $3 million to “publicize its criminal conduct”. These actions were imposed after the company was found guilty by a federal jury in August, 2016 of six of the twelve charges against the company in US District Court.”

Why did a 99-year old power line fail, igniting the Camp fire?

Investigators have removed parts of a transmission tower to examine more closely

Investigators are zeroing in on their goal to determine exactly what caused molten aluminum and metal to drop from a 115,000-volt PG&E power line tower at about 6:15 a.m. on November 8 near Poe Dam seven miles east of Paradise, California. A few hours later most of the town had been reduced to ashes as 50 mph winds pushed the wildfire through the community, killing at least 85 people and making thousands homeless.

As reported by an article in the Mercury News, something failed on the tower, causing a power line to get loose and whip around, striking metal which instantly heated, melted, and dropped to the ground igniting the vegetation. It could have been “a tiny O-ring that holds up rows of disc-shaped insulators, or possibly fatigued steel from one of the tower’s arms”, the article explains. The tower was built in 1919 which raises the possibility of worn out parts and metal fatigue. CAL FIRE has removed some pieces from the tower to examine further.

The newspaper also reports that CAL FIRE is investigating a possible second point of ignition below a PG&E lower voltage distribution line that occurred about half an hour after the first failure.

The Camp Fire started 13 months after the disastrous fires that burned in the Napa Valley in October of 2017. There are reports that at least 12 of them were caused by Pacific Gas & Electric power lines.

PG&E to patrol power lines with aircraft this weekend

PG & E pacific gas and electricFollowing reports that at least 12 of the wildfires that devastated areas of the California wine country last year were caused by Pacific Gas & Electric power lines, the company has decided to initiate helicopter patrols. The aircraft will inspect lines in El Dorado County in the areas of Camino, Cedar Grove, Pollock Pines, Sly Park, Newtown, Old Fort Jim, Sierra Springs, Pleasant Valley, Sweeneys Crossing and Happy Valley through October 28.

The National Weather Service predicts breezy conditions and elevated wildfire danger in some areas of Northern California Sunday and also Tuesday through Thursday of next week.

In the past PG&E has contracted for at least one Blackhawk helicopter that they use for heavy lift operations.

Blackhawk helicopter PG&E
Blackhawk helicopter under contract to PG&E.

In July of 2017 a helicopter under contract to PG&E crashed near Donner Summit in California.  The CHP said the six people on board had only minor injuries and none were transported to a hospital.

PG&E helicopter crash
Crash of helicopter under contract to PG&E July 11, 2017. near Donner Summit. CHP photo.

Strong, dry winds hit California

PG&E has proactively shut off power to tens of thousands of customers to prevent vulnerable power lines from starting fires

Red Flag Warnings CaliforniaWith a forecast for strong Santa Ana winds that are predicted to gust above 65 mph in some areas firefighters and utility companies are making preparations — some to prevent fires and others to suppress them after they start.

Sunday night Pacific Gas and Electric turned off the power for 59,000 of their customers in areas of six Northern California counties — Amador, Calaveras, El Dorado, Lake, Napa, and Sonoma — reasoning  that their electricity infrastructure is vulnerable to the strong winds, which could ignite fires.

PG&E power shut off traffic signalsPG&E sent out a tweet asking residents of those areas to “Please be safe at intersections where traffic signals are out”.

In the south part of the state Southern California Edison warned 130,000 customers they may shut off power in parts of Ventura, Los Angeles, Orange and San Bernardino counties.

The National Weather Service has issued Red Flag Warnings for large areas of southern California through 10 p.m. Tuesday for 25 to 45 mph winds that could gust in some areas at 65 or 75 mph with humidities ranging from 4 to 12 percent.

Wind gusts at 9 a.m. PDT October 15, 2018 California
Wind gusts at 9 a.m. PDT October 15, 2018.

Several Red Flag Warnings are in effect in areas of Northern California until mid-day Monday or 1 a.m. Tuesday for 15 to 25 mph winds gusting at 35 to 45 mph along with very low humidities.

Many areas in Southern California from Los Angeles to San Diego received over half an inch of rain Friday which could have an effect on the spread of wildfires until the fine fuels are dried by the winds.

Red Flag Warnings precipitation california
Red Flag Warnings in California for October 15 with an overlay showing precipitation that occurred October 12-13, 2018.

On Sunday the moisture content of ten-hour time lag fuels in those areas was still relatively high, at 11 to 15 percent.  Ten-hour fuels include vegetation 0.25-inch to 1-inch in diameter.

10-hour time lag fuel moisture
Moisture content on October 14 of 10-hour time lag fuels (less than one-half inch in diameter).

But Northern California was a different story with 3 to 4 percent moisture content. These numbers will be lower at both ends of the state after a day or two of strong, dry winds.