PG&E faces record $2.1 billion penalty over Northern California wildfires that killed dozens
PG&E Corp. agreed last fall to pay a record $1.675 billion penalty for causing deadly wildfires that swept through California wine country and destroyed the town of Paradise in 2017 and 2018. Now the state is asking for more.
A Public Utilities Commission administrative law judge proposed Thursday that PG&E be penalized $2.137 billion for its role in the fires, saying last fall’s settlement wasn’t enough. The new figure, like the earlier penalty, would be a record for the PUC.
The original penalty was the result of a negotiated settlement between the bankrupt utility and the PUC’s staff. The administrative law judge, Sophia Park, said more money is justified because of the magnitude of the fires and PG&E’s lax behavior. The Camp Fire killed 85 people, more than any wildfire in California history. The wine country fires in 2017 killed more than 40 people.
Among other things, Park was upset that the original penalty didn’t fine PG&E a penny. Instead, it consisted almost entirely of forcing PG&E’s shareholders to eat “wildfire-related costs” and not bill ratepayers. Her proposed penalty — which must be approved by the five-person commission — would include a $200 million fine, payable to the state’s general fund.
Fines are “the most potent tool for ... penalizing and deterring unlawful conduct,” she wrote.
In addition, she would prohibit PG&E shareholders from pocketing a tax break, worth an estimated $500 million, that would be generated by the penalty. Instead, the tax savings must be “applied to the benefit of PG&E’s customers,” she wrote.
The prospect of a tougher penalty comes as PG&E is fighting to exit bankruptcy. Park said PG&E, despite its financial woes, appears capable of absorbing the stronger medicine. The fact that PG&E has agreed to pay $25.5 billion in wildfire claims to leave bankruptcy “gives a sense of the scale of capital that a company of PG&E’s size is able to raise, even while in bankruptcy proceedings,” she wrote.
PG&E said it was “disappointed” in Park’s proposed penalties. The utility said the original settlement “addresses multiple needs and would allow for additional investments to further strengthen the company’s electric operations.”
This story was originally published February 27, 2020 at 3:52 PM.