Sonoma County Fires Update
Sonoma County Fires Update
Sonoma County Fire Update: The October 2017 Northern California Wildfires - Where We Stand Today
Sonoma County Fire Update: Northern California Wildfire Lawsuits On Hold Due To PG&E Bankruptcy, Will Be Resolved In Chapter 11 Process, SEC Disclosure Says
An examination of the legal and financial disclosures contained within PG&E’s Form 10-K for the 12 months ended December 31, 2018 reveals that the company faces thousands of lawsuits over its equipment’s role in sparking the numerous wildfires that have ravaged California in recent years, including the 2017 Northern California fires and the 2018 Camp Fire, with PG&E’s projected financial liability running well over ten billion dollars.
However, all of those lawsuits are now on hold due to PG&E’s filing for Chapter 11 bankruptcy protection in late January 2019, the company’s SEC filing states. The company has further disclosed that it expects its financial obligations as to any and all wildfire-related claims to be handled through the Chapter 11 process.
Coordinated litigation over the October 2017 North Bay fires, which is being conducted in San Francisco County Superior Court, was “in the early stages of discovery” with a trial related to the Atlas fire in Napa County “scheduled to begin on September 23, 2019,” according to PG&E’s filing.
The company further disclosed that, with regards to the 2017 Northern California wildfires alone, as of January 28, 2019, it was “aware of approximately 750 complaints on behalf of at least 3,800 plaintiffs…five of which seek to be certified as class actions.”
The plaintiff fire victims accuse PG&E of an “alleged failure to maintain and repair their distribution and transmission lines and failure to properly maintain the vegetation surrounding such lines,” claiming that these were “the causes of the 2017 Northern California wildfires.”
Damages sought include “wrongful death, personal injury, property damage, evacuation costs, medical expenses, punitive damages, attorneys’ fees and other damages.”
PG&E also faces 48 subrogation complaints filed by insurance companies who paid out claims related to the October 2017 North Bay fires, as well as lawsuits from a number of government entities impacted by the blazes, including “Yuba, Nevada, Lake, Mendocino, Napa and Sonoma Counties and the Cities of Santa Rosa and Clearlake.”
Additionally, several PG&E investors have brought securities-related litigation against the company, alleging that PG&E failed to adequately disclose the risks it faced over wildfire-related liability.
However, according to PG&E’s SEC filing, all of this litigation has been put on hold as a result of the company’s decision to file for Chapter 11 bankruptcy protection, which it announced in a press release issued January 29.
“This [coordinated Northern California wildfires] litigation, including the trial date with respect to the Atlas fire, currently is stayed as a result of the commencement of the Chapter 11 Cases,” PG&E states in its filing, adding later, “PG&E Corporation’s and the Utility’s obligations with respect to such [wildfire-related] claims are expected to be determined through the Chapter 11 process.”
The financial motivations for PG&E’s wanting to postpone the wildfire litigation as long as possible and to have its obligations governed by bankruptcy rules are spelled out in the fiscal disclosures contained in its SEC filing.
Even net of anticipated insurance recoveries of over $2.1 billion, PG&E reports that it estimates losses of $11.771 billion dollars in total wildfire-related claims, and the company’s balance sheets reflect estimated total liabilities of $14.226 billion related to the 2015 Butte fire, the 2017 Northern California wildfires, and the 2018 Camp fire combined.
With regards to the 2017 Northern California wildfires, which devastated broad swathes of the state’s famed wine country north of San Francisco in October 2017, PG&E disclosed estimated losses of $3.5 billion from third-party claims brought by fire victims.
Meanwhile, the day after PG&E filed for bankruptcy, a federal judge responsible for overseeing the criminal probation imposed on the company following the deadly 2010 San Bruno gas pipeline explosion declared PG&E to be in violation of the terms of that probation, blasting the company for its role in the recent wave of catastrophic California wildfires.
“Does a judge turn a blind eye and let PG&E continue what you’re doing, let you keep killing people?” Judge William Alsup pondered openly before the court, according to The MercuryNews. “Can’t we have electricity that is delivered safely in this state?”
If lawyers for PG&E were hoping that the verbal tongue-lashing would end there, they were to be sorely disappointed, as Judge Alsup’s public excoriation had only begun.
“Those fires killed 22 people burned alive in their cars and homes,” US District Judge Alsup said, per The MercuryNews. “There is one clear pattern here: PG&E is starting these fires. Global warming is not starting these fires.”
Judge Alsup’s will decide what measures he will impose on PG&E in response to its probation violations following the company’s presentation to the court of its wildfire mitigation plan, which was expected within a matter of weeks.
The October 2017 Northern California Wildfires - How We Got Here Continued
The October 2017 Northern California Fire Siege
Almost immediately, suspicions arose that electrical equipment owned and operated by the California utility giant PG&E had played a role in sparking the fires, and within a matter of days fire victims were filing lawsuits against the company, alleging that PG&E had been negligent in failing to adequately maintain a safe distance between powerlines and vegetation, as it is required to do.
The Cal Fire Reports
May 2018: CAL FIRE Investigation into The La Porte Fire, The McCourtney Fire, The Lobo Fire, and The Honey Fire
Ominously for PG&E, the CAL FIRE press release reported that the “McCourtney, Lobo, Honey investigations have been referred to the appropriate county District Attorney’s offices for review.”
June 2018: CAL FIRE Investigation into 12 Wildfires in Mendocino, Humboldt, Butte, Sonoma, Lake, and Napa Counties
October 2018: CAL FIRE Investigation into The Cascade Fire
“A high wind event in conjunction with the power line sag on two conductors caused the lines to come into contact, which created an electrical arc,” the CAL FIRE press release explained as to the fire’s cause. “The electrical arc deposited hot or molten material onto the ground in a receptive fuel bed causing the fire. The common term for this situation is called ‘line slap’ and the power line in question was owned by the Pacific Gas and Electric Company.”
Although CAL FIRE announced that its investigators found “[n]o violations of the Public Resource Code” by PG&E with regards to the Cascade Fire, the agency said it still had forwarded its report to the Yuba County District Attorney.
January 2019: CAL FIRE Investigation into The Tubbs Fire
“After an extensive and thorough investigation,” the announcement read, “CAL FIRE has determined that the Tubbs Fire, which occurred during the October 2017 Fire Siege, was caused by a private electrical system adjacent to a residential structure.”
Further, “CAL FIRE investigators did not identify any violations of state law, Public Resources Code, [sic] related to the cause of this fire.”
This result potentially saved PG&E from billions of dollars in additional liabilities.
PG&E Lobbies Hard For—And Ultimately Gets—Help From Sacramento
The legislation, signed into law by then-Governor Jerry Brown in September 2018, contained a number of measures favorable to PG&E, among them provisions relaxing the standards used by regulators to determine utility liability, granting utilities the ability to issue bonds to raise funds to pay legal damages, and allowing them to slap a surcharge on ratepayers to compensate themselves for disaster-related losses.
One of the major arguments used by backers of the legislation was that, whatever one might think of PG&E, a bankruptcy of the utility giant would be a catastrophic outcome for both ratepayers and fire victims and therefore must be avoided at all costs. State Senator Bill Dodd, revealed to have a son who works for PG&E, was one of the legislation’s chief backers and one of the main pushers of the narrative that a PG&E bankruptcy would be devastating for Californians and that the bailout legislation was needed to stop it.
“Without it, ratepayers will be left holding the bag and communities will needlessly suffer,” Dodd, a Democrat, told Reuters, adding, “You’ve got a lot of investors like hedge funds circling like vultures. What would happen to the North Bay fire victims [in the event of a PG&E bankruptcy]?”
You’ll never guess what happened next.
PG&E Files for Bankruptcy
Interestingly, PG&E’s bankruptcy announcement made specific mention of Cal Fires Report on the cause of the Tubbs Fire, which had been released just days earlier, suggesting the findings may have played a role in the company’s decision to seek Chapter 11 protection.
“On January 24, 2019, CAL FIRE released the results of its investigation of the 2017 Tubbs Fire, which concluded that PG&E equipment did not cause the fire,” the press releasenoted. “The comprehensive analysis underlying PG&E’s decision to pursue reorganization under Chapter 11, conducted with the assistance of independent legal and financial advisors, took into account PG&E’s longstanding belief based on available evidence that its equipment did not cause the Tubbs Fire.”
The section concludes, “As such, PG&E continues to believe that the Chapter 11 process will facilitate the orderly, fair and expeditious resolution of the liabilities that have arisen and will continue to arise in connection with the 2017 and 2018 Northern California wildfires.”
With PG&E now in bankruptcy, the company has stated in SEC disclosures filed February 28, 2019, that the civil actions against it have been stayed and that its obligations regarding wildfire-related claims will be dealt with through the bankruptcy proceedings.
Sonoma County Fire Update: PG&E Ordered to Explain Any Role It Had In The Camp and Tubbs Fires
November 29, 2018
In what could be a huge blow to PG&E, a Federal court judge has ordered PG&E to explain any role it had in the Camp and Tubb fires.
Why do we believe this could be a huge blow? PG&E has not been very forthcoming with information. For example, more than a year after the devastating Tubbs Fire in Santa Rosa, we still have no official answers about the cause of that fire. Citing ongoing investigations, PG&E always seem to bunt any responsibility.
However, this Order from Judge Alsup could change all that. Judge Alsup is the Judge responsible for the criminal case against Pacific Gas & Electric for the San Bruno fire.
In his Order, Judge Alsup said he wants to know whether any requirements in the sentence handed down last year for the pipeline blast in San Bruno “might be implicated” if the reckless operation or maintenance of PG&E power lines ignited a wildfire. He noted that the sentence required PG&E not to engage in any additional crimes.
This obviously puts PG&E in a very difficult position. To say that a Federal Court Judge has an enormous amount of power over PG&E at this point would be an understatement. PG&E is a convicted felon over the San Bruno explosion. One would think that PG&E might try and stall the Court by claiming it doesn’t have full information or that the investigation is ongoing.
However, Judge Alsup also asked what requirements of the sentence might be affected by any “inaccurate, slow, or failed reporting of information about any wildfire by PG&E” and what steps the independent monitor has taken to improve the utility’s safety and reporting on power lines and wildfires. The judge asked for “an accurate and complete statement” of any role PG&E may have played in the Camp fire and all other wildfires in California since its sentencing.
Thus PG&E will likely face a very difficult choice: try and blow off a Federal Court Judge that it has to answer to or be forthcoming to the Court and potentially expose its culpability in these fires. It is possible that Judge Alsup may allow PG&E to file its answers under seal so that PG&E can both answer the Court’s questions and protect itself from the answers.
Nevertheless, this is huge news for all the victims and survivors of the Camp and Tubb fires. Perhaps we will get some answers about the role of PG& in these fires in the very near future.
Here are the exact questions PG&E is ordered to answer by December 31, 2018:
1. What requirements of the judgment herein, including the requirement against further federal, state, or local crimes, might be implicated were any wildfire started by reckless operation or maintenance of PG&E power lines?
2. What requirements of the judgment herein might be implicated by any inaccurate, slow, or failed reporting of information about any wildfire by PG&E?
3. What specific steps has the monitor herein taken to monitor and improve PG&E safety and reporting with respect to power lines and wildfires?
4. Provide an accurate and complete statement of the role, if any, of PG&E in causing and reporting the recent Camp Fire in Butte County and all other wildfires in California since the judgment herein.
Sonoma County Fire Update: Yuba County Board of Supervisors Votes to Sue PG&E over Oct 2017 Fires
Following revelations by the California Department of Forestry and Fire Protection (Cal Fire) that its investigators blamed sagging power lines for sparking the deadly Cascade Fire in October 2017, the Yuba County Board of Supervisors announced October 24 that it would be suing utility giant Pacific Gas & Electric Corp. (PG&E) over losses the county suffered in the blaze. Yuba County joins Lake, Mendocino, Napa, and Sonoma counties in bringing suit against PG&E over the October 2017 North Bay Fire Siege.
“This lawsuit is intended to seek compensation from those entities responsible for the fires; costs that should not be shouldered by Yuba County, which is still recovering from the devastation,” the Yuba County Counsel said in a statement, according to the Yuba-Sutter Appeal-Democrat. “Legal action is a necessary step to help restore our resilient community.”
Such costs allegedly include millions of dollars expended toward emergency-response efforts, repairs to infrastructure, and natural-resource recovery. Yuba County reportedly also will seek recovery of lost tax revenue. The lawsuit will not involve damage to private property.
Local residents quoted by the Appeal-Democrat expressed skepticism over the wisdom of the lawsuit.
“They’re going to use my tax money to file a lawsuit against PG&E,” retired firefighter Wyatt Howell told the local publication. “And as the little guy, I have to fend for myself…I’m just not real sold that what they’re doing is right. I think they’re looking for a golden goose egg.”
Wyatt lost structures, equipment, and trees on his property to the Cascade Fire, which burned nearly 10,000 acres and killed four people. He reports having received from his insurance company only about 20% of nearly $300,000 in damage he claims to have suffered.
With lawmakers in Sacramento having recently passed litigation that allows PG&E to pass some of the cost of fire-related lawsuits back onto consumers, Howell wonders what the point of the lawsuit is.
“It’s left a real bad taste in my mouth following the fire,” Howell said.
If you suffered property damage or loss of a loved one during the devastating North Bay Fire Siege of October 2017, contact the experienced lawyers at TheLawFirm.com right away for a free legal consultation with a licensed attorney!
Yuba-Sutter Appeal Democrat
California Department of Forestry and Fire Protection
Personal Injury Lawyer
Sonoma County Fire Update: PG&E Must Submit Wildfire Plan By Feb 2019, PUC Says
In accordance with recently passed legislation purportedly aimed at addressing the state’s wildfire situation, California’s Public Utilities Commission (PUC) on October 25 voted unanimously to issue a mandate requiring Pacific Gas and Electric Corp. (PG&E) and five other California utility companies to submit wildfire mitigation plans by February 2019. The mandate further calls for such plans to be in place just four months later.
The 20-point plans, required under the law signed by Governor Jerry Brown on September 21, are intended to set out the means by which utilities intend to “prevent, combat and respond to wildfires,” in the words of the PUC order. The mitigation plans must address how companies will “minimize the risk of electrical lines and equipment causing catastrophic wildfires, including consideration of dynamic climate change risks.”
Once a utility submits its plan to the PUC, there begins a 30-day window during which the Commission and the utility may exchange comments regarding the plan and its execution. When the 30-day period has expired, the PUC then has three months to make a determination on the plan. Once an approved plan is in place, the PUC has the authority to fine a utility for failing to comply with its terms.
The recently passed law—which many opponents labeled a PG&E “bailout” for its provisions allowing PG&E to pass some of its wildfire-related costs onto its customers—was spurred in large part by the devastating North Bay Fires that struck northern California’s famed wine country in October 2017. To date, the California Department of Forestry and Fire Protection (Cal Fire) has determined that PG&E equipment was responsible for 17 separate blazes that were part of the North Bay Fires. In 11 of those instances, Cal Fire investigators found evidence that PG&E has been in violation of public safety regulations requiring the maintenance of appropriate clearance between vegetation and power equipment.
If you lost property or a loved one as a result of the devasting October 2017 northern California wildfires, contact the experienced, local lawyers at AdamsFietz.com for a free legal consultation with a licensed attorney!
The Press Democrat
Personal Injury Lawyer
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Sonoma County Fire Update: PG&E Reaches $1.5M Settlement with Butte DA over October 2017 Fires
The Butte County District Attorney’s Office and Pacific Gas and Electric Corp. (PG&E) have reached terms on a settlement agreement that will resolve claims involving three fires that occurred within Butte County as part of the deadly and destructive October 2017 North Bay Fires, the Chico Enterprise-Record reported. The agreement will create a new operation, the Enhanced Fire Prevention and Communications Program, which will be run by the Butte County Fire Department and funded by PG&E to the tune of $1.5 million.
Under the agreement, PG&E will not admit to any wrongdoing, and PG&E will be prevented from passing any of the $1.5 million cost along to consumers. The money, which is expected to fund the program for four years, will pay for four “defensible space inspectors” who will be tasked with inspecting power lines within the county for fire risks. The funding also provides for vehicles and other equipment.
The California Department of Forestry and Fire Protection (Cal Fire), the state agency tasked with investigated wildfires, previously had determined that the three Butte County fires were sparked when vegetation came into contact with PG&E electrical equipment. The three Butte County fires have been dubbed the LaPorte Fire, the Cherokee Fire, and the Honey Fire.
On May 25, 2018, Cal Fire issued a news release in which it announced the results of its investigations into several of the October 2017 fires, including the LaPorte Fire and the Honey Fire. According to Cal Fire, the LaPorte Fire, which charred over 8,400 acres and destroyed over 70 structures, “was caused by a tree branches falling onto PG&E power lines,” though “CAL FIRE investigators determined there were no violations of state law related to the cause of this fire.”
The smaller Honey Fire, which burned only 76 acres, similarly “was caused by an Oak [sic.] branch contacting PG&E power lines.” However, in this instance, Cal Fire investigators “found evidence that Public Resources Code 4293, which requires adequate clearance between trees and power lines, was allegedly violated.”
The Cherokee Fire, which burned approximately 8,400 acres and destroyed 6 structures, also was determined to have been sparked by branches coming into contact with PG&E power lines during the windstorm that swept across Northern California on the night of October 8, 2017.
“Electrical transmission lines in the wildlands are necessary in the modern world,” Butte County District Attorney Mike Ramsey said in a statement, portions of which were published by StreetInsider.com. “Our goal throughout this process was to increase the safety of the citizens of Butte County. Rather than seek a minimal criminal fine we sought a settlement similar to one in 1998 which substantially reduced electrical-line-caused wildland fires at the beginning of this century. We very much appreciate the cooperation of PG&E in stepping forward once again and making fire safety a top priority.”
If you suffered injury or loss of property in the catastrophic North Bay Fires of October 2017, contact the experienced, local attorneys at AdamsFietz.com right away for a free legal consultation with a licensed lawyer!
California Department of Forestry and Fire Protection (Cal Fire)
Sonoma County Fire Update: CalFire Finds Downed PG&E Powder Lines Caused Deadly Cascade Fire
Almost exactly a year to the day after the deadly and destructive North Bay Fires swept across broad swathes of northern California’s famed wine country, the California Department of Forestry and Fire Protection (Cal Fire) issued on October 9 a news release summarizing its findings as to the cause of the so-called Cascade Fire that struck Yuba County beginning on October 8, 2017. The report placed the blame squarely on power lines owned by the Pacific Gas and Electric Company (PG&E).
According to the Cal Fire release, the Cascade Fire “was started by sagging power lines coming into contact during heavy winds,” an event Cal Fire refers to as “line slap.” Although investigators reported finding no violations of the Public Resources Code, Cal Fire did provide a copy of its report to the Yuba County District Attorney.
The Yuba County DA’s office has since announced that it will not be pursuing any criminal charges related to the report’s findings, the San Francisco Chronicle reported.
The Cascade Fire in Yuba County burned nearly 10,000 acres, destroyed 264 structures, and killed four people. A firefighter also was injured battling the blaze.
The Cal Fire investigation concluded that a “high wind event in conjunction with the power line sag of two conductors caused the lines to come into contact, which created an electrical arc,” that then “deposited hot burning or molten material onto the ground…causing the fire.”
The news release also noted that Cal Fire continues to look into the causes of the highly destructive Tubbs Fire, perhaps the most destructive blaze in what Cal Fire refers to as the “October 2017 Fire Siege.” Cal Fire says it will make its highly anticipated findings on the Tubbs Fire public as soon as they become available.
“In total, the October 2017 Fire Siege involved more than 170 fires and burned at least 245,000 acres in Northern California,” Cal Fire reports. “Approximately 11,000 firefighters from 17 states and Australia helped battle the blazes.”
Absent from the Cal Fire press release, however, is the fact that, by some estimates, the fires also caused damage measuring in the tens of billions of dollars, leading to over 200 active lawsuits against PG&E. Fears over the scope of PG&E’s potential financial liability prompted state lawmakers in Sacramento recently to enact a law some have labeled a PG&E “bailout” over concerns that liability for the blazes might bankrupt the privately-owned utility giant.
With billions of dollars in financial responsibility on the line, it is no wonder that Cal Fire’s reports on the “October 2017 Fire Siege” continue to be awaited on all sides with such eager anticipation.
If you suffered loss of your home, business, or a loved one in the devastating October 2017 North Bay Fires, contact the experienced team of local lawyers at AdamsFietz.com today for a free legal consultation with a licensed attorney!
California Department of Forestry and Fire Protection (Cal Fire)
San Francisco Chronicle
Sonoma County Fire Update: CA Governor Brown Signs PG&E ‘Bailout’ Bill into Law
On September 21, 2018, California Governor Jerry Brown signed into law SB901, a highly controversial bill aimed at addressing multi-billion-dollar utility giant PG&E’s potential financial liability over the catastrophic North Bay fires of October 2017. While advocates have promoted SB901 as a necessary tool for adapting to new climate realities and avoiding the fallout from a potential PG&E bankruptcy, critics have labeled the bill a consumer-funded bailout of a privately-owned company with a highly dubious safety record.
After months of debate and speculation about whether or not Sacramento would or should pass legislation addressing the October 2017 fires that caused dozens of deaths and billions of dollars in property damage across multiple counties in northern California’s famed wine country, we finally now have the law in its final form, so let’s take a look at some of its provisions.
According to the San Francisco Chronicle, in addition to the financial measures aimed at providing a financial safety net for PG&E, SB901 also includes practical measures such as extra funding for removing dead trees from forests. It also “toughens financial penalties against utilities that violate state safety rules.”
However, these harsher penalties pale in comparison to the potentially billions of dollars in financial benefits PG&E stands to gain under the new law, the benefits of which will accrue most directly to PG&E’s private shareholders and the costs of which will be borne largely by PG&E ratepayers, including small businesses, families, and individual consumers.
For example, according to the Chronicle, “PG&E will be able use a state-authorized bond to pay for the more than 200 lawsuits filed against the company over last year’s fires.”
While this provision ensures that PG&E has access to the capital necessary to pay for the harms suffered by fire victims—rather than forcing them to join other creditors in what inevitably would be highly complicated, contentious, and long-lasting PG&E bankruptcy proceedings—it also represents a considerable win for the privately-owned company and its investors. SB901 not only authorizes PG&E to issue such bonds, making sure that PG&E will be able to borrow upfront whatever funds it needs to pay off its fire liability, it also explicitly allows PG&E to pass the cost of repaying the bonds off on energy consumers. As the Chronicle has reported, “Those [state-authorized, fire-related] bonds will be paid off over time by PG&E’s customers on their monthly bills.”
This bond-issue safety-net, which applies not only to the October 2017 North Bay Fires but to all future fires, places extraordinary weight and significance on the findings of the state’s Public Utility Commission (PUC), with billions of dollars in potential financial liability hinging on future PUC determinations. Under SB901, where the PUC finds that a utility acted “reasonably” with regards to the causes of a fire, that utility will be able not only to issue state-authorized bonds to raise the funds necessary to cover its fire-related liabilities but also will receive essentially automatic approval to charge ratepayers for the cost of those bonds.
Where the PUC concludes that a utility has acted unreasonably, however, it will be denied authorization to issue such bonds, leaving the company and its investors, rather than California energy consumers, to cover the costs.
Placing even more of an onus on the California PUC, another one of SB901’s safety-net provisions further calls on the Commission to conduct a financial stress test of PG&E to determine how much the company is able to pay in liability over the October 2017 North Bay fires while still remaining solvent, a consideration extended to few, if any, privately-owned companies facing billions of dollars in potential liability over its own alleged negligence and malfeasance. According to the Chronicle, any liabilities over and above the limits imposed by the PUC stress test “would be passed on to [PG&E] customers” with the company estimating “that customers would pay an extra $5 per year for every $1 billion in bonds issued.”
While state Senator Bill Dodd, a Democrat representing fire-stricken Napa County and one of SB901’s chief architects and backers, sought to ensure a wary public that the new law “will help prevent further loss of life and property while ensuring ratepayers aren’t left holding the bag”, the exact provisions of SB901 itself suggest just the opposite.
If you suffered loss of property or a loved one in the devastating North Bay Fires of October 2017, contact the experienced, local attorneys at AdamsFietz.com today for a free consultation with a licensed attorney!
San Francisco Chronicle
Although the cause of the Tubbs Fire is still the subject of ongoing investigation, many officials suspect that downed power lines located in close proximity to trees and other vegetation was a leading cause of the fires that began in October 2017.
This is not the first time that Californians have been on the hook for corporate carelessness; a systemic disregard for necessary safety measures and proper maintenance across California’s non-governmental energy industry is thought to be responsible for many fires in the state’s past.
Neither are allegations of criminal negligence a first for PG&E – in 2015, PG&E was found responsible for causing the Butte Fire, which destroyed 70,000 acres in Amador and Calaveras Counties. It is expected that, once these lawsuits have been settled, PG&E will be required to pay over $1 billion in damages. In 2018 it is thought they also caused the Camp Fire, costing even more lives and destruction. In 2010, the company was convicted of violating pipeline safety laws and obstructing investigators after the death of 10 people in the San Bruno gas pipeline explosion. As a result, the company was ordered by the state government to pay $1.6 billion, in addition to private and federal settlements.
An independent audit from the state of California later revealed that PG&E had illegally diverted over $100 million from its safety operations budget to fund bonuses for its executives. In 1994, the company was charged with 739 counts of criminal negligence for failing to properly trim trees that were located near power lines, resulting in a wildfire that devastated the Sierra Nevada foothills area.
Recent events, such as the Camp Fire, suggest that these events have not provided enough incentive for the company to change its behavior. So what will? We once thought that a large enough lawsuit would shock PG&E into responsibility. However, that now seems unlikely. PG&E knew that they were both being blamed and sued for the Tubbs Fire, yet they are now being accused of allowing the Camp Fire to happen. Furthermore, they successfully lobbied to have the ratepayers pick up the tab for the damage done to Sonoma County.
Nevertheless, we are encouraging everyone who suffered loss or injury from the Tubbs Fire to join the lawsuit against PG&E. If you don’t, it will be YOU who has pay the entire tab. A failure to sue PG&E is the same as saying ‘you burned down my house but I’ll just deal with it on my own’.
We know that there are a lot of lawyers seeking these cases in Santa Rosa. Call us and come see us so we can explain why we are the right lawyers for you. The time to file a claim is running out.
Sonoma County Fire Update: Investigation into Cause of Tubbs Fire, Most Destructive of North Bay Fires, Remains Ongoing
Although Cal Fire, the state agency tasked with investigating wildfires, released its findings as to over a dozen of the October 2017 North Bay Fires months ago, the agency has yet to complete reports covering the two most destructive blazes, the so-called Coffey Park and Tubbs fires. And, according to a piece published by The Los Angeles Times on September 16, 2018, we shouldn’t be expecting a final report any time soon.
“They have to review everything and anything that presents itself,” Cal Fire spokesman Scott McLean told the Times , explaining the delays.
However, with analysts at Moody’s having calculated that the Tubbs Fire alone could have accounted for as much as two-thirds of the total damage caused by all of the October 2017 North Bay Fires combined, stakeholders from fire victims to insurance companies to PG&E eagerly are awaiting Cal Fire’s results. Some estimates have put total losses associated with the Tubbs Fire as high as $15 billion.
With so much on the line and so little conclusive information publicly available, speculation has run rampant. While PG&E spokespeople have declined to speculate as to the cause of the Tubbs Fire, the Times reports that lawyers for the company have argued in court that privately owned power lines were to blame for sparking the blaze.
Attorneys representing fire victims call such claims by PG&E baseless.
“I know that fire like the back of my hand,” Jim Frantz, whose law firm is representing over one thousand North Bay Fire victims, told the Times. “We believe it’s complete and utter BS when they talk about a private wire causing that fire.”
Even when Cal Fire’s findings are ultimately released, given the billions of dollars on the line, there is likely to be a large amount of controversy over their validity.
If you suffered loss of property or a loved one in the devastating October 2017 North Bay Fires, contact the experienced, local team of attorneys at AdamsFietz.com today for a free legal consultation with a licensed attorney!
Sonoma County Fire Update: California Assembly, Senate Pass Last-Minute PG&E Fire Bailout
Just days after widespread media reporting that efforts to craft a legislative response to PG&E’s liability over the October 2017 North Bay Fires had failed, lawmakers in Sacramento passed on August 31 wide-reaching fire-related legislation. Making it through the California Assembly and Senate by wide margins with just hours to spare before the end of the legislative session, the bill, which would allow PG&E to pass the costs of the North Bay Fires onto ratepayers and would change California’s utility-liability laws, will now go to Governor Jerry Brown for his signature.
While lawmakers have sought to play up the benefits and importance of the legislation, advocates on both sides of the debate expressed some level of disappointment with its terms. Consumer-rights advocates, who have labeled the bill and similar efforts “bailouts” of PG&E and its investors, have decried the fact that the company would be able to pass the cost of its fire-related liability onto ratepayers. PG&E and its surrogates, for their part, have expressed that they do not feel the bill goes far enough in protecting the company from past and future liability.
Lawmakers who supported the bill, which passed 45 to 10 in the state Assembly and 29 to 4 in the state Senate, sought to highlight the supposed importance of allowing PG&E to stave off bankruptcy, which has been seen as an increasingly likely possibility as estimates of the company’s potential liability over the North Bay Fires have risen to as high as $17 billion.
“Without it, ratepayers will be left holding the bag and communities will needlessly suffer,” state Senator Bill Dodd, a Democrat representing Napa and a major proponent of the legislation, said of the bill’s permitting PG&E to charge ratepayers for the company’s fire-related costs.
Dodd and other supporters of the legislation argue that it is best for ratepayers to pay the costs of fire damage now rather than the costs of a PG&E bankruptcy later. PG&E previously declared bankruptcy in 2001, emerging with $13 billion in debt that subsequently was paid off by California ratepayers over a span of years.
Further, advocates for the legislation claim that bailing out PG&E on the backs of energy consumers will help fire victims by ensuring that they do not have to compete against other creditors for limited company resources, as they would in bankruptcy proceedings.
According to state Senator Dodd, supporter of the bill, the California Public Utility Commission (CPUC) will be in charge of authorizing any fire-related rate hikes PG&E might seek to oppose.
“[CPUC has] to do a complete fiscal analysis, independent of PG&E, and nothing comes from ratepayers until PG&E pays the maximum amount they can pay and still remain in business,” Dodd said, according to ABC News 7.
However, should the legislation be signed into law by Governor Brown, as is widely expected, the bill’s most lasting impact could be its revisions to California utility-liability law. Under the legal concept known as inverse condemnation, which California historically has embraced, a utility such as PG&E must compensate victims of fires sparked by the company’s equipment, whether or not the company has been found to be negligent or in noncompliance with state regulations.
The bill would change that law by allowing fire victims—which often include municipalities and insurance companies in addition to individuals and businesses—to receive compensation from the utility only where there the company was found to have failed to maintain and operate its equipment in a reasonable manner.
According to Cal Fire, the state agency tasked with investigating wildfires, PG&E equipment was responsible for sparking over a dozen of the 21 separate fires that engulfed Northern California in October 2017. In several cases, investigators reportedly found evidence that PG&E had failed to comply with state rules governing the required clearance between live power lines and trees and other foliage.
PG&E presently faces approximately 200 active lawsuits involving about 2,700 separate plaintiffs. These cases are proceeding through the early discovery process in San Francisco Superior Court.
If you suffered loss of property or a loved one during the devastating Northern California wildfires of October 2017, contact the experienced team of local attorneys at AdamsFietz.com for a free legal consultation with a licensed attorney!
ABC News 7
Sonoma County Fire Update:PG&E Filings Reveal Intentions to Recoup North Bay Fire Lossess Through Rate Hikes
Amidst the lobbying onslaught taking place in Sacramento and the PR battles raging across the state, those looking for a straight-forward statement of PG&E’s strategy for recouping potential financial losses related to its role in the North Bay Fires of October 2017 need look no further than the company’s most recent financial disclosures.
In the quarterly report filed with the Securities and Exchange Commission (SEC) for the period ending June 30, 2018, the utility giant included among the “Risk Factors” facing the company and its investors the following statement:
“If the Utility is unable to recover all or a significant portion of its excess costs in connection with the Northern California wildfires and the Butte Fire through ratemaking mechanisms, PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows could be materially affected.”
Putting aside the fact that PG&E reduces its potential role in the loss of 44 human lives, the destruction of 8,900 structures, and the scorching of 245,000 acres of land to mere “excess costs”, what the company literally is saying is that disasters like the Northern California fires of October 2017–sixteen of which investigators have determined were sparked by PG&E equipment—only pose a risk to the profit-making ability of PG&E and its investors if PG&E is unable to recoup the associated losses by jacking up energy prices on consumers and businesses across the state.
Whatever the PG&E spin machine might claim about the company’s intentions, here, in the document signed as true by the company’s top executives under penalty of a potential felony, PG&E states its real intentions for recovering its fire-related losses.
The disclosure continues, with PG&E warning that “the inability to recover all or a significant portion of costs in excess of insurance through increases in rates and by collecting such rates in a timely manner…could have a material effect on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.”
Nearly echoing verbatim the arguments put forth by PG&E’s advocates—both lobbyists and lawmakers—in Sacramento, the company’s next “risk factor” involves the allegedly dire consequences of PG&E’s being denied its ability to recover its losses through rate hikes, which, under most circumstances, must be approved by the California Public Utilities Commission (CPUC). These consequences include a continued downgrading of PG&E’s credit rating, which already has taken a hit this year, as noted in PG&E’s disclosures.
“During the first quarter of 2018, Fitch Ratings, S&P Global Ratings, and Moody’s Investors Service, Inc. downgraded PG&E Corporation’s and the Utility’s credit ratings, and S&P Global Ratings further lowered PG&E Corporation’s and the Utility’s credit ratings during the second quarter of 2018,” PG&E reports. “If PG&E Corporation’s or the Utility’s credit ratings were to be further downgraded, in particular to below investment grade, their ability to access the capital and credit markets would be negatively affected and could result in higher borrowing costs.”
According to PG&E, the continued downgrading of the company’s credit rating, coupled with the fact that the “reputations of PG&E Corporation and the Utility continue to suffer from the negative publicity” associated with its role in disasters like the North Bay Fires, could result in what PG&E and its investors might regard as a true calamity, with the company warning that such factors “could adversely impact PG&E Corporation’s stock price.”
If you suffered loss of a loved one or destruction of property during the devastating North Bay Fires of October 2017, contact the experienced, local team of attorneys at AdamsFietz.com today for a free legal consultation with a licensed attorney!
United States Securities and Exchange Commission
Form 10-Q – “PG&E Corp.” – Submitted July 26, 2018 Item 1A. Risk Factors.
Consolidated Notes to Financial Statements
Note 9 – Contingencies and Commitments Item 1A. Risk Factors.