PG&E Estimates $1.15 Billion In Dixie Fire-Related Liability

PG&E Estimates $1.15 Billion In Dixie Fire-Related Liability

PG&E, in a Monday Securities and Exchange Commission filing, estimated that it will be liable for $1.15 billion in losses connected with the Dixie fire.

The utility noted that their potential liability involves numerous factors, including:

  • The cause of the fire
  • Contributing causes of the fire
  • The type, size and number of structures destroyed or damaged
  • The contents of the structures
  • Other personal property damage
  • The types and number of trees destroyed or damaged
  • Attorneys’ fees
  • Personal injuries
  • Clean-up and fire suppression costs
  • Other damages in the event PG&E is found negligent
  • Restitution, fines or penalties imposed by governmental entities
  • Business interruptions

PG&E may face even more than $1.15 billion in losses in connection with the fire. The filing states that the $1.15 billion estimate “corresponds to the lower end of the range” of PG&E’s “reasonably estimable range of losses.”

The filing also notes that the $1.15 billion estimate does not include:

  • Restitution, fines or penalties that might be imposed by governmental entities
  • Possible punitive damages
  • Claims for compensation by federal agencies, including for damage in national parks or national forests
  • Claims for compensation for fire suppression costs by local, county and state agencies
  • Evacuation costs

Over $630 million was spent suppressing the Dixie fire, according to a National Interagency Coordination Center Incident Management Situation Report dated October 22.

The filing states that PG&E estimates that the fire burned about 70,000 acres of national park and about 685,000 acres of national forests.

The filing states that PG&E has recorded an insurance receivable of $569 million in connection with the Dixie Fire.

PG&E may receive help paying for their liability thanks to AB 1054, a bill signed into law in 2019 which established a statewide fund available for utilities to pay wildfire liability claims out of when their liability exceeds $1 billion in any year.

Dixie Fire Lawsuits

PG&E Estimates $1.15 Billion In Dixie Fire-Related Liability

The filing notes that, as of October 27, PG&E was aware of about 10 complaints on behalf of at least 676 plaintiffs related to the Dixie fire, and that the utility expects they may receive more complaints.

The complaints were filed in Plumas, Shasta and and San Francisco counties, according to the filing, and include claims based on multiple causes of action, including:

  • Negligence
  • Inverse Condemnation
  • Violations of the Health & Safety Code
  • Violations of the Public Utilities Code
  • Trespass
  • Premises liability
  • Private nuisance
  • Public nuisance

The filing notes that the primary claim in each lawsuit is that PG&E allegedly failed to properly inspect, maintain and de-energize their power lines, and that this caused the Dixie fire.

The lawsuits, according to the filing, seek to recover:

  • Economic loss
  • Property damage
  • Exemplary damages
  • Punitive damages
  • Attorneys’ fees
  • Other damages

The filing notes that PG&E may be held liable for business interruption, property damage, attorneys’ fees and interest without being found negligent under the doctrine of inverse condemnation. California courts, according to the filing, have imposed liability under inverse condemnation “on the grounds that losses borne by the person whose property was damaged through a public use undertaking should be spread across the community that benefited from such undertaking, and based on the assumption that utilities have the ability to recover these costs from their customers.”

The filing also notes that California courts have ruled that inverse condemnation applies whether or not the California Public Utilities Commission (CPUC) allows recovery by the utility for such costs.

The filing states that the utility’s $1.15 billion liability estimate is “based on the current state of the law concerning inverse condemnation in California and the facts and circumstances available.”

Dixie Fire Appears To Have Been Started By PG&E’s Power Lines

PG&E Estimates $1.15 Billion In Dixie Fire-Related Liability

The Dixie fire was first observed on July 13, 2021. The fire consumed 963,309 acres of land in Butte, Plumas, Tehama, Lassen and Shasta counties, destroyed 1,329 structures (including 717 residential structures), damaged 95 structures and led to one death.

The filing notes the following about the origin of the fire:

  • PG&E was notified of an outage at Cresta Dam off Highway 70 in the Feather River Canyon lost power at around 7 AM on July 13;
  • The responding PG&E troubleman wasn’t able to reach the compromised equipment until around 4:40 PM due to difficult terrain and a bridge closure;
  • The troubleman, upon arrival, found two of three fuses opened, a tree leaning into the Bucks Creek 1101 12 kV conductor, and a fire on the ground near the tree’s base.

PG&E was questioned by U.S. District Judge William Alsup on August 18th regarding the PG&E troubleman. Alsup’s questioning seemed to imply he suspected the fire was actually started by the troubleman. Alsup noted it “does not add up” that the troubleman estimated the fire to be only around 600-800 square feet in size at 4:40 PM, yet the line disruption was recorded at around 7 AM that day. Alsup asked whether the troubleman tried to replace a fuse while the tree was still contacting the lines, possibly causing the fire by doing so.

PG&E Under Investigation Regarding Dixie Fire

The Dixie fire and its cause, according to the filing, are being investigated by Cal Fire and the district attorneys’ offices of Butte, Plumas, Shasta, Lassen and Tehama counties.

“Various other entities” such as federal and state law enforcement agencies may also be investigating the fire, according to the filing.

PG&E has received data requests in connection with the fire from California’s Office of Energy Infrastructure Safety CPUC’s Safety and Enforcement Division, according to the filing, which states the utility has also received document and information requests from Cal Fire and the Butte County District Attorney’s Office.

The filing states that PG&E was served with a subpoena on October 7 by the United States Attorney’s Office for the Eastern District of California for the production of documents.

“It is uncertain when any such investigations will be complete,” the filing states.


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