The California Public Utilities Commission voted unanimously on May 7 to impose $1.937 billion in penalties against Pacific Gas and Electric Company for the utility’s role in the catastrophic wildfires that scorched hundreds of thousands of acres of land throughout the north state in 2017 and 2018, according to a release issued by the Commission.
“The scope of the devastation caused by PG&E’s misconduct demands this record penalty,” said Commissioner Clifford Rechtschaffen. “It is one of many aggressive steps being taken by the CPUC to hold PG&E accountable for failing to keep public safety a top priority.”
This is the largest penalty ever assessed by the CPUC, according to the release.
“The decision increased the penalty amount in the settlement by $262 million due to the pervasive nature of the identified violations and unprecedented harm caused by PG&E, including loss of life, that resulted from the wildfires,” read the release.
The Commission said that any realized tax savings associated with shareholder-funded operating expenses under the modified settlement agreement will be returned to PG&E customers.
“Although these ratepayer benefits are uncertain, PG&E estimates that these benefits may be $425.5 million,” read the release.
The total penalties consist of $1.823 billion in disallowances for wildfire-related expenditures, an increase of $198 million from the original settlement agreement, as well as $114 million in System Enhancement Initiatives and corrective actions to further protect public safety which is an increase of $64 million from the settlement agreement.
According to the release, corrective actions include root cause analysis for wildfires where ignition involved PG&E facilities, and the implementation of recommended actions to prevent similar events; funding local Fire Safe Councils that focus on community-based wildfire prevention and mitigation efforts; and, funding to the California Foundation for Independent Living Centers to support the safety and welfare of vulnerable customers before, during, and after disasters and Public Safety Power Shut-off events.
The decision also imposes a $200 million fine, with the obligation to pay permanently suspended, in order to ensure that payment of the fine does not reduce the funds available to satisfy the claims of wildfire victims and given the unique circumstances of PG&E’s bankruptcy, read the release.
The Commission said PG&E customers can expect an approximately three percent savings on their bill in 2021 and beyond as a result of this decision.
According to the release, a total of 21 major wildfires burned 245,000 acres of land, caused mass evacuations and killed 44 people in 2017. The 2018 Camp Fire burned approximately 153,336 acres, destroyed the community of Paradise and took the lives of 85 people and PG&E later pled guilty to 84 cases of involuntary manslaughter for its role in the disaster.