By Katherine Blunt
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 16, 2019).
California investigators found that PG&E Corp.'s equipment
sparked the deadliest wildfire in state history, putting additional
pressure on a company already facing billions of dollars in
fire-related liability costs.
The California Department of Forestry and Fire Protection said
on Wednesday it had determined that a PG&E
electric-transmission line near the town of Pulga, Calif., ignited
last year's Camp Fire, which spread quickly across dry vegetation
in the forested foothills of the Sierra Nevada, killing 85 people
and destroying the town of Paradise.
State fire investigators also said they identified a second
point of ignition where vegetation blew into the company's
electric-distribution lines, starting another fire that was
consumed by the first one. Cal Fire sent its investigative report
to the Butte County District Attorney's office, which will
determine whether the company will face criminal charges.
The findings -- which end months of speculation about the
utility's role in the massive wildfire -- raise the likelihood that
PG&E could face billions of dollars in liability costs related
to its role in the November fire.
PG&E sought bankruptcy protection in January in anticipation
of more than $30 billion in potential liability costs. It said
earlier this year that its equipment was probably the cause of the
Camp Fire. State fire investigators previously determined that the
company's equipment contributed to sparking 18 blazes that together
killed 22 people in 2017.
PG&E said in a statement that while it had not had time to
review the investigators' report, the finding that transmission
lines were the first point of ignition in the Camp Fire was
consistent with its prior statements.
"Our hearts go out to those who have lost so much, and we remain
focused on supporting them through the recovery and rebuilding
process," the company said.
At a legislative hearing in Sacramento on Wednesday shortly
after investigators' announcement, PG&E Chief Executive Bill
Johnson reiterated that the company was likely responsible for the
Camp Fire.
"It is a disappointment that this happened. Let's not do it
again," Mr. Johnson said.
The Camp Fire began on the morning of Nov. 8, 2018, when a wire
snapped free of the company's Caribou-Palermo transmission line. A
PG&E worker soon spotted a quarter-acre fire beneath it, the
company has disclosed.
A Wall Street Journal investigation found that the company
repeatedly delayed maintenance work on the line, a project PG&E
had estimated before the fire would cost $30.3 million. The company
shut down the line earlier this year after discovering safety
problems and has said it might consider decommissioning it
following a closer inspection.
PG&E is working to overhaul its safety practices in the wake
of the fires by accelerating inspections of transmission and
distribution equipment and building out a network of weather
stations and cameras to monitor wildfire risk across its system. It
recently appointed a new board of directors and hired Mr. Johnson,
former head of the Tennessee Valley Authority, as its new chief
executive to replace Geisha Williams, who stepped down in
January.
Still, the company has faced sharp criticism from state
lawmakers and regulators about its commitment to safety.
California Gov. Gavin Newsom on Wednesday asked a
bankruptcy-court judge to cap the amount of time PG&E has to
file a restructuring plan, arguing that the company has so far
failed to undertake "fundamental management and cultural reforms to
prioritize safety and reliable service."
"Despite repeated assurances from PG&E's management,
PG&E has not demonstrated that it understands the gravity and
urgency of the situation," lawyers for Mr. Newsom said in the
filing.
In a statement Wednesday, a PG&E spokesman said the company
appreciates the governor's perspective and shares his desire to
resolve its bankruptcy quickly. PG&E "is asking for additional
time to increase our chances of formulating and negotiating a plan
of reorganization that is feasible and agreeable to stakeholders,"
he said.
PG&E has struggled to contain the threat of wildfire within
its 70,000-square-mile service territory, which is filled with
millions of dead trees following a lengthy drought exacerbated by
climate change. The risk is highest in the summer and fall, when
hot, strong winds threaten to dislodge power lines that can ignite
dry brush.
With wildfire season fast approaching, PG&E has said it
would take extreme measures to prevent more fires this year. It
plans to proactively shut off power in fire-prone parts of its
service area, which are home to 5.4 million people.
The plan has elicited criticism from communities that fear the
shut-offs would burden local officials and emergency responders,
cost businesses money and endanger those who rely on electricity
for medical needs.
Mike Danko, a California trial lawyer who represents victims of
the 2017 and 2018 wildfires, said he believes PG&E could face
more than $30 billion in liability costs, particularly if it is
found criminally liable for the November fire.
"We're leading the charge, and this confirms what we already
knew," he said, referring to investigators' conclusions.
--Russell Gold contributed to this article.
Write to Katherine Blunt at Katherine.Blunt@wsj.com
(END) Dow Jones Newswires
May 16, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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