PG&E Bankruptcy Seeks To Cap Victim Compensation

Under a plan proposed to the Northern District of California, Pacific Gas & Electric (PG&E), as part of its bankruptcy proceedings, would cap compensation for victims of California wildfires at no more than $16.9 billion, a sum that lawyers representing victims of the fires have described as “totally unacceptable.” 

The $17 billion figure may seem substantial, but the damage caused by PG&E equipment in California has been astronomical. Five of the ten most destructive fires in California since 2015 have been linked to PG&E’s electrical network. This includes a series of destructive wildfires in northern California in late 2017. This series of fires included 250 separate blazes across six counties; 21 of these became major fires. These fires were the costliest group of wildfires on record at the time, causing an estimated $14.5 billion in damages. It has been predicted that the northern California fires cost the U.S. economy at least $85 billion. These fires killed 44 people, hospitalized nearly 200 others, and forced close to 100,000 people to evacuate their homes. It was one of the most costly and deadly wildfires California had ever seen, only to be surpassed the following year.

The 2018 Camp Fire is the deadliest wildfire in California. It began on November 8, 2018, in Butte County, CA. The natural conditions in the area, including an unusually dry autumn, and hot, dry gusty winds contributed to the fire’s rapid spread from the point of origin. It ultimately spread to an area of almost 240 square miles, destroyed over 18,000 structures, and killed 85 people. The fire was declared contained on November 25, 2018. The damage caused by the fire was estimated to be over $16 billion.

Victims of the Camp Fire brought a series of claims against PG&E. According to their lawsuits, the wildfire began due to malfunctioning PG&E electrical equipment and the company was aware of the malfunctioning before the fire began. According to the complaint, an electrical infrastructure, which was far too old to be operating—even under PG&E’s internal standards—broke, causing a high-voltage power line to drop blazing molten material into dry vegetation (in an area that the company was responsible for maintaining). Additionally, victims of the Tubbs Fire, one of the many 2017 fires in northern California, also brought suit against PG&E. Preliminary findings were that the fire was caused by a “private electrical system” and not PG&E equipment, but victims claim otherwise and a California judge ruled that a suit for the Tubbs Fire against the utility company may proceed.

On January 14, 2019, PG&E announced that it was filing for Chapter 11 bankruptcy. In a plan submitted to bankruptcy court on Monday, PG&E would pay no more than $16.9 billion for wildfire claims; wildfire victims would get $8.4 billion, fire victims’ insurers would get $8.5 billion, and government entities would get $1 billion. This plan amounts to nearly half of the $30 billion in wildfire-related liabilities the utility company predicted when filing for bankruptcy earlier this year.

Victims have called this sum “a slap in the face” and “completely unacceptable,” pointing to the fact that the damage caused by the fires has far exceeded the proposed sum. The plan must be approved by U.S. Bankruptcy Judge Dennis Montali in San Francisco.