(Photo: Paradise, California, after the November 2018 Camp Fire. Credit: Cal OES, Flickr Creative Commons)In the wake of last year’s historically destructive wildfires, the California Public Utilities Commission faces a difficult balancing act. Regulators opened proceedings yesterday to figure out the maximum PG&E could pay without harming ratepayers or service.
Increasingly intense wildfires prompted the California Legislature to pass Senate Bill 901 last September. Signed by Gov. Jerry Brown, the bill increased government fire-protection efforts by $1 billion over the next five years and made changes to determine how much utilities must pay, John Myers reported in the LA Times.
“Utility regulators will be given new guidelines to help determine a company’s liability,” he wrote.
Wildfires ripped through the state again in 2018. Among them was the Camp Fire in November, which became the deadliest and most destructive in California history. It annihilated the town of Paradise.
On December 12, the San Francisco Chronicle reported that PG&E sent a letter to regulators saying that one of their employees spotted flames near a transmission tower close to the fire’s origin site. A few weeks later, California’s attorney general submitted an opinion to a federal judge saying that PG&E could be prosecuted for murder, manslaughter, or other criminal charges depending on what investigators find, the Sacramento Bee reported.
PG&E teeters on the brink, Utility Dive’s Gavin Bade noted today. The utility withdrew all of the cash available from its revolving credit lines in November, and more recently Moody’s and S&P Global downgraded PG&E’s credit. At the same time, as Bade points out, many California legislators and activists don’t want the state to “bail out” PG&E.
On Thursday the PUC moved to implement the provisions of Senate Bill 901 and determine a methodology for future wildfire cost recovery. Opening comments on the order instituting rulemaking (OIR) are due on February 11 and a scoping memo outlining wildfire cost recovery is expected in March.
Global reinsurance firm Munich RE released a report this week that called the Camp Fire the costliest disaster in the world last year with $12.5 billion in insured losses, according to the Sacramento Bee.
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