PG&E Equipment Tied to Northern California’s Cascade Wildfire
(Bloomberg) -- Sagging power lines owned by PG&E Corp. caused the fatal Cascade fire in Northern California last year, but no public codes were violated, according to a report by state investigators.
PG&E equipment has already been blamed as the ignition source of 16 other fires in 2017. The newest report came from the California Department of Forestry and Fire Protection in a statement on Tuesday. The Cascade fire destroyed 264 structures and killed four people.
The state agency known as Cal Fire said it didn’t find public code violations, and that it sent its report to the Yuba County District Attorney, which said late Tuesday its office wouldn’t pursue criminal charges related to the fire. PG&E said in statement it will review the report.
Separately, Cal Fire and the Riverside County Fire Department said equipment owned by Edison International’s Southern California Edison caused the 300-acre Liberty fire in Riverside County in December. Edison said in a statement that it will review the report when it is made available.
Edison said its own internal report indicated that its equipment ignited the Liberty fire although it did not mean that the utility "failed to observe proper practices or comply with the law."
Investigators have already alleged PG&E violated state laws in 11 of last year’s fires. Cal Fire still hasn’t released a report on the Tubbs blaze, which was the deadliest.
PG&E said in June that it will take a $2.5 billion pretax charge tied to some of those blazes. JPMorgan Chase & Co. estimated in August that it could be on the hook for as much as $17.3 billion.
“It’s good to be wrapping up the process of determining what PG&E liability might be,” said Travis Miller, a utility analyst at Morningstar Inc. “We think investors remain concerned about the much larger Tubbs fire report and regulatory developments that might come along in the next few months.”
PG&E’s shares dropped about $1, or 2 percent, to touch $47.86 in the minute after the news was released. Shares immediately rebounded and rose 1.3 percent to $48.55 at the close in New York. Edison climbed 0.7 percent to $70.45.
Last month, California Governor Jerry Brown signed legislation that will help PG&E and other utilities cover the costs of wildfire damages, including by selling bonds backed by customer bills. PG&E has lost more than $10 billion in market value in the past year and faces about 200 legal complaints tied to the blazes. The utility suspended its dividend and withheld its 2018 profit guidance because of the uncertainty about how much it might have to pay for damages.
Under California law, utilities can be held liable for costs if their equipment is found to have caused a fire, even if they followed safety rules.
On Oct. 5, PG&E reached a $1.5 million settlement with the Butte County district attorney for three of the October 2017 fires. The money will go toward monitoring PG&E’s rural power lines.
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