PG&E Power Lines Caused Biggest California Fire of 2019

(Bloomberg) -- Less than a month after emerging from bankruptcy triggered by a string of devastating wildfires in 2017 and 2018, PG&E Corp. has now been found responsible for California’s biggest blaze of 2019.

The California energy giant’s power lines sparked the Kincade fire which burned 77,758 acres and destroyed 374 structures in Sonoma County wine country, the California Department of Forestry and Fire Protection, said Thursday.

Investigators have sent a report on the incident to the Sonoma County District Attorney’s Office, only a month after PG&E pleaded guilty to 84 counts of involuntary manslaughter for a 2018 conflagration that was the most deadly in state history.

Brandon Gilbert, an assistant to Sonoma County District Attorney Jill Ravitch, said his office recently received the reports and will start reviewing them. PG&E said it doesn’t have access to Cal Fire’s report or the evidence it collected.

“We look forward to reviewing both at the appropriate time,” PG&E said in a statement.

Long Suspected

PG&E’s equipment was long suspected of causing the Kincade fire that started on Oct. 23, as the utility had reported that one of its transmission lines malfunctioned near the location and time of the start of the blaze. The company said in May that it could book a loss of at least $600 million stemming from damages tied to the wildfire.

“The report wasn’t a surprise to anybody,” said Kit Konolige, an analyst for Bloomberg Intelligence. “I don’t think a whole lot of people thought it would exonerate the company.”

The Kincade fire likely won’t cause the same kind of financial trouble for PG&E as the string of catastrophic blazes in 2017 and 2018 that were blamed on its equipment and pushed it into bankruptcy more than a year ago. PG&E estimated liabilities from those fires at $30 billion. The company emerged from Chapter 11 at the start of this month after having settled claims from the earlier fires for $25.5 billion. The Kincade blaze wasn’t included in the bankruptcy settlement with victims.

The shares gained 1.1% to $9.12 at 11:51 a.m. in New York.

Cal Fire’s finding is certain to be of interest to the federal judge overseeing PG&E’s criminal probation stemming from a 2010 gas line explosion in San Bruno.

Lawsuits

U.S. District Judge William Alsup has threatened to impose deep and expensive changes to PG&E’s operations based on its involuntary manslaughter plea following the investigation of the origin of the Camp fire, which destroyed the town of Paradise. The prosecution was led by Butte County District Attorney Mike Ramsey, who concluded that the blaze was due to PG&E’s negligence, which he also tied to the Kincade fire.

Even before Cal Fire’s report, PG&E faced lawsuits over Kincade. One of the suits, filed July 8 in Sonoma County Superior Court, was filed on behalf of a golf course, vineyards and a hotel damaged in the fire. The suit blames PG&E’s culture as the cause, claiming it failed to maintain aging equipment despite knowing it was unsafe.

The fire started after PG&E had shut down other power lines in the area during windy and dry conditions. The measure was part of a number of intentional blackouts carried out by PG&E in October designed to keep its equipment from sparking another calamitous blaze.

Mike Danko, a lawyer representing victims of the Camp fire in Paradise, California, in which PG&E pleaded guilty to involuntary manslaughter, said Cal Fire’s report was unsurprising. Danko is representing a number of individuals and businesses who lost property from the Kincade fire.

“We knew that, just like the Camp fire, PG&E should have turned the transmission lines off, but didn’t,” he said, referring to the Kincade blaze. “The only question is, given what happened in Paradise, why did PG&E leave the transmission lines energized? Did it learn nothing at all?”

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