Federal judge links PG&E's uninsulated power lines to California wildfires

Dive Brief:

The federal judge overseeing Pacific Gas & Electric's probation related to the 2010 San Bruno pipeline explosion issued a preliminary finding on Thursday concluding the utility's equipment was a factor in sparking wildfires in 2017 and 2018 that devastated parts of Northern California.
The ruling could lead to additional scrutiny or oversight for the utility, which announced Jan. 14 that it would file for bankruptcy protection due to mounting wildfire liabilities.
U.S. District Judge William Alsup gave PG&E and the U.S. Justice Department until Jan. 23 to reply to concerns that uninsulated PG&E equipment caused "electrical sparks [to] drop into the vegetation below," creating "an extreme danger of igniting a wildfire."

Dive Insight:

While Alsup is overseeing the San Bruno pipeline case in the U.S. District Court for the Northern District of California, he has also been making inquiries into the state's wildfires and the utility's possible role, potentially exposing the utility to even greater scrutiny.

"After a study of the materials provided by PG&E, the Court tentatively finds that the single most recurring cause of the large 2017 and 2018 wildfires attributable to PG&E's equipment has been the susceptibility of PG&E's distribution lines to trees or limbs falling onto them during high-wind events," Alsup's order states.

At the end of December, California Attorney General Xavier Becerra told Alsup that PG&E could be tried for murder or manslaughter if the utility is found to have operated its equipment in a "reckless" manner that helped to spark deadly wildfires in the last two years.

Alsup's 1-page preliminary order this week concluded the utility's equipment played a role in sparking the blazes. PG&E said it is reviewing the case.

The San Bruno proceeding has its roots in the 2010 gas pipeline explosion on PG&E's system that killed eight people and destroyed 38 homes. In 2015, the CPUC hit PG&E with a $1.6 billion fine in three investigations related to the explosion — the largest penalty ever levied against a public utility in U.S. history.

More recently, the focus has turned to California's wildfires and the potential liability faced by utilities. The state's "inverse condemnation" rules can put its regulated energy companies in extreme jeopardy, even if they are found to have followed all rules and regulations.

Alsup's oversight made headlines two weeks ago, when Becerra claimed that a murder or manslaughter charge was possible, depending on circumstances. Legal experts say a murder charge is unlikely, but greater scrutiny of the company's operations is possible.

Since then, PG&E announced it would file for Chapter 11 bankruptcy protection later this month, as it attempts to deal with up to $30 billion of liabilities associated with the 2017 and 2018 wildfire seasons.

PG&E officials have said for months that the utility's wildfire liabilities outweigh its insurance coverage, and the company said the Chapter 11 process will "support the orderly, fair and expeditious resolution of its potential liabilities" while it and California regulators explore options to reorganize the company.