Pacific Gas & Electric (PG&E) has pleaded guilty to 84 counts of involuntary manslaughter for its role in a 2018 wildfire considered the most devastating in California history.
The Camp Fire, which began when a transmission line broke from an aged PG&E tower, destroyed the town of Paradise. The utility on Tuesday acknowledged its negligence in not maintaining the line, which ran through a heavily forested and mountainous area that often experienced high winds. PG&E on Tuesday also pleaded guilty to a single count of illegally setting a fire.
The Camp Fire caused billions of dollars in property damage. It was among a series of wildfires that led PG&E to file for bankruptcy in early 2019. The company, California’s largest utility, is expected to soon receive a judge’s approval for its plan to exit bankruptcy.
That plan includes an agreement to pay $13.5 billion to people who lost homes and businesses from wildfires—including the Camp Fire—started by PG&E equipment.
Hearing Via Video Conference
PG&E CEO Bill Johnson on Tuesday repeated “guilty, your honor” 84 times—once for each felony count attached to each victim—over a Zoom video conference stream in an almost-empty courtroom in Chico, California. Judge Michael Deems recited the 84 counts one by one as photos of the victims were displayed in the courtroom. An 85th victim of the fire was assumed to have committed suicide, and prosecutors did not charge PG&E with that death.
“Our equipment started that fire,” said Johnson. “PG&E will never forget the Camp Fire and all that it took away from the region.” The fire is estimated to have destroyed about 18,000 buildings, including about 14,000 homes.
The company in March had announced its intention to take responsibility for the deaths. Johnson already has announced he will leave the company later this year.
Johnson came to PG&E in April 2019 after retiring as president and CEO of the Tennessee Valley Authority (TVA) in November 2018. He previously served as chairman, president, and CEO of Progress Energy. Johnson replaced interim CEO John Simon, who held the spot after former CEO Geisha Williams resigned shortly before the utility’s bankruptcy filing.
PG&E has agreed to pay the maximum penalty of $3.5 million as part of a plea agreement with the Butte County district attorney in the wildfire case, and another $500,000 to cover the cost of the county’s investigation. A state judge still must approve that deal.
Deems, the judge overseeing the Camp Fire case, is allowing people who lost loved ones in the fire to make statements at the court hearing, which is expected to last several days.
No Prison Time Expected
The California Public Utilities Commission has separately fined PG&E about $2 billion for its negligence in causing the wildfire, and the company could face additional penalties for other violations. However, none of the utility’s employees or executives are expected to face prison time.
Those with wildfire-related claims against PG&E decided to agree to a settlement after the utility filed for bankruptcy. The bankruptcy filing meant that those with claims against the company had to get in line with the utility’s creditors.
PG&E filed for bankruptcy protection in January 2019—the utility’s second bankruptcy this century—after the utility’s equipment was implicated in several wildfires in 2017 and 2018. The company at the time estimated its wildfire liability at about $30 billion.
It’s expected that about half of the $13.5 billion in compensation PG&E is paying wildfire victims will be in the form of company stock. That will leave about 70,000 people owning just more than 22% of the company after it exits bankruptcy, and existing shareholders will continue to own most of the utility. PG&E also plans to pay off its bond debt in full.
Steps to Prevent Future Wildfires
PG&E is taking steps to reduce its exposure to future wildfires, including deforestation efforts along transmission lines. The company also began introducing public safety power shutoffs (PSPS), pre-emptively turning off the electricity supply in its territory on windy and hot days. That practice has been criticized for leaving customers without power for several days, and has prompted calls for a network of microgrids, among other things, to provide power during those outages.
California lawmakers last year passed a bill, signed by Gov. Gavin Newsom, to create a $20 billion fund to help utilities cover the costs of future wildfires, to help avoid future bankruptcies. In the case of PG&E, the utility must compensate wildfire victims, improve its safety practices, find a new CEO, and appoint a new board of directors. The utility also has agreed that the state could take over the utility if PG&E does not meet its obligations under the bankruptcy plan.