Former Pacific Gas & Electric officials have agreed to pay $117 million to federal agencies affected by the deadly and devastating Camp and North Bay fires caused by the utility’s equipment.
Although the money will be paid by insurance firms, the former officials are unlikely to get hired for similar jobs in the future, according to a lawyer who led the litigation.
The $117 million settlement announced this week resulted from legal action against 20 former PG&E officials, including four CEOs, about a dozen directors, and senior officers of electrical transmission and distribution, said attorney Frank Pitre. The money will go to agencies, including the U.S. Department of the Interior, that helped fight the fires and assist victims, resolving claims from those agencies and paving the way for victims of the blazes to receive additional compensation beyond the $4.9 billion already paid by the utility through the PG&E Fire Victim Trust, Pitre said.
“What was important about this case was making sure that corporate executives understand that if they’re going to shirk their responsibility to the corporation, they’re going to be identified and there’s going to be a lawsuit filed against them,” Pitre said.
Of the officials targeted in the legal action in U.S. District Court in San Francisco, Pitre said, “I don’t see them getting hired as directors or officers anywhere else.”
The October 2017 blazes that made up the North Bay fires killed 44 people and laid waste to huge swathes of the Napa-area Wine Country. The Camp Fire of 2018 left 86 dead as it razed the town of Paradise, east of Chico. PG&E pleaded guilty in 2020 to dozens of counts of involuntary manslaughter in connection with the Camp Fire. State fire officials found the utility responsible for 12 of the North Bay fires, but state and local prosecutors found insufficient evidence for criminal charges.
PG&E has for years faced public and official ire over catastrophic fires sparked by its transmission equipment, with many critics attacking the investor-owned utility for spending billions on shareholder dividends that could have been spent on fire prevention. In 2019, Judge William Alsup of U.S. District Court in San Francisco went after the firm over its forest fire problem, saying, “PG&E pumped out $4.5 billion in dividends and let the tree budget wither.”
The $117 million in settlement funds, as is common with lawsuits targeting corporate officials, will be paid by companies that provided the firm’s directors-and-officers insurance for the company officials sued by the trust, according to a PG&E regulatory filing.
The utility, which filed for bankruptcy in 2019 because of billions of dollars in fire-related debt and liabilities, in a Friday statement called the settlement “another step forward in PG&E’s ongoing effort to resolve issues outstanding from before its bankruptcy and to move forward focused on our commitments to deliver safe, clean and reliable energy to our customers, and to continue the important work of reducing risk across our energy system.”
The settlement sum was based on the amount of insurance money available to settle the trust’s legal action and other legal claims, Pitre said. “It was a good result,” he said, describing it as “one of the largest settlements of its type in the United States.”
Fire Victim Trust trustee Cathy Yanni said trustees hoped the settlement would help push PG&E toward making fire safety its central operating principle. She added that the trustees were encouraged by recent company announcements that it was starting to bury transmission lines and harden its infrastructure.
Meanwhile, the U.S. Forest Service has launched a criminal probe into whether PG&E equipment may have started California’s largest wildfire this year, the Mosquito Fire in the Sierra Foothills. That blaze started Sept. 6 and has burned 77,000 acres, with 90% containment as of Friday, according to federal authorities.
Cal Fire in January blamed PG&E equipment for last year’s Dixie Fire in Northern California, the state’s second-largest blaze on record, which blackened 960,000 acres and killed one person. In April, the company agreed in a settlement with six counties to pay $55 million to avoid criminal liability for that blaze and the 78,000-acre 2019 Kincade Fire in Sonoma County. In June, PG&E pleaded not guilty to involuntary manslaughter after Cal Fire found that a tree falling onto one of its power lines caused the Zogg Fire near Redding that killed four people.
The company also caused a fatal natural gas explosion that killed eight people and destroyed a San Bruno neighborhood in 2010, leading to its conviction in 2016 on six criminal charges and a fine of $3 million.