PG& E repairs:
Restoring power in wake of blazes is expected to cost utility up to $ 200 million.
Restoring power in the wake of last month’s devastating Wine Country wildfires will probably cost Pacific Gas and Electric Co. $ 160 million to $ 200 million, the utility’s corporate parent reported Thursday in its first financial estimate for the work.
PG& E will seek to recover that money from its customers, Jason Wells, chief financial officer of PG& E Corp., said during a conference call with Wall Street analysts to discuss third- quarter earnings. He did not offer an estimate of how the fire recovery costs could affect electricity rates.
PG& E Corp. reported a quarterly profit of $ 550 million, or $ 1.07 per share, up nearly 42 percent from $ 388 million, or 77 cents per share, during the same period last year.
PG& E executives spent much of the earnings call discussing the fires, PG& E’s response to them, and the possibility that the company could be held liable for the economic losses they caused.
Investigators with the California Department of Forestry and Fire Protec-
tion, or Cal Fire, are trying to determine whether PG& E’s power lines, blown about in a fierce windstorm, played a role in starting the fires, which erupted on Oct. 8 and killed at least 43 people. Under a legal doctrine known as “inverse condemnation,” utility companies in California can be held liable for economic damages arising from fires caused by their equipment, even if the companies followed all applicable safety rules.
PG& E Corp. Chief Executive Officer Geisha Williams told the analysts that inverse condemnation posed a risk to all energy companies operating in the state, and PG& E would fight any effort to apply it in suits arising from the North Bay fires.
“We would challenge its application if that were to be the case in these events,” she said.
PG& E has joined with California’s two other investor- owned utility companies — San Diego Gas & Electric Co. and Southern California Edison — to argue that utilities should be able to pass on to their customers any costs they face through inverse condemnation. Consumer advocates call that an attempt by the companies to escape paying for their own mistakes.
The California Public Utilities Commission, which sets utility rates, is scheduled to vote on the issue next week. Meanwhile, four state legislators plan to introduce legislation in January that would prevent utilities from passing on wildfire costs to their customers in cases where the companies’ negligence caused the incidents.
A Sacramento County judge ruled in June that under inverse condemnation, PG& E may be held liable for damages in the 2015 Butte Fire, which began when a pine tree leaned into a power line. Wells said Thursday that if third- party claims from the Butte Fire surpass the $ 922 million limit of PG& E’s liability insurance, the utility will try to recover any further costs through its electricity rates.