PG& E could be blamed in Zogg Fire
Equipment eyed in Cal Fire probe of deadly blaze
California officials are investigating whether Pacific Gas and Electric Co. equipment caused a large Shasta County wildfire that has killed four people and destroyed more than 200 buildings.
PG& E disclosed Friday that the California Department of Forestry and Fire Protection, or Cal Fire, had taken some of the company’s electrical equipment near where the 56,338acre Zogg Fire started Sept. 27. The company stressed in regulatory reports that the cause of the fire has not been determined and it does not have access to what the authorities took.
PG& E said it is cooperating with Cal Fire and provided state regulators with preliminary information about the situation.
If the investigation concludes that PG& E started the fire, it would create a new round of problems for the company, which has caused a series of monstrous fires in California over the past several years, including the 2018 Camp Fire in Butte County, the state’s deadliest and most destructive fire as measured by buildings burned. PG& E just emerged from bankruptcy protection a few months ago after being weighed down by its responsibility for that fire and others.
In a statement, the company stressed the “unfortunately historic” nature of the state’s 2020 wildfire season, which has consumed more than 4 million acres — more than double any other year on record.
“We recognize the tragic losses sustained as a result of this year’s fire season and are thankful, as always, for the efforts of the first responders who have worked tirelessly to contain the fires and protect the lives and property of California residents,” PG& E spokeswoman Lynsey Paulo said in the statement.
Cal Fire spokesman Scott McLean deferred questions about the Zogg Fire to the Shasta County district attorney’s office, which is “on board and is involved,” he said. McLean said he could not comment further, and the district attorney’s office had no immediate comment.
The Zogg Fire could be the first blamed on PG& E since its exit from bankruptcy. The last major blaze the company is known to have caused, the October 2019 Kincade Fire, was in Sonoma County.
It could also complicate matters for victims of previous PG& E fires who are in line to receive a portion of an estimated $ 13.5 billion settlement reached as part of the company’s resolution to its bankruptcy case. Half of the settlement is supposed to be paid using shares of the parent company PG& E Corp., and those may decline if shareholders react negatively to the Zogg Fire investigation.
PG& E shares closed Friday at $ 10.76, up 1.8%. In afterhours trading, shares plunged 10.8% to $ 9.60.
“It pains me to hear that there may be some PG& E equipment involved,” said Frank Pitre, one of the lead attorneys for wildfire victims who have sued the company before. But the funds available to pay victims may not be threatened if PG& E’s insurance proves sufficient to cover damages from the Zogg Fire, Pitre said. As of July, PG& E had wildfire insurance coverage totaling $ 757.5 million lasting until next summer, according to a report the company filed with the Securities and Exchange Commission.
“It’s premature at this point to try to assess whether or not this could have any impact on the stock price,” he said. “Insurance is to protect the assets. If there’s no risk to the assets because there’s plenty of insurance, then it should have no impact.”
California also passed a law last year that created an estimated $ 21 billion fund that can pay claims from major wildfires caused by utility power lines.
Regardless, the Zogg Fire report is a bad look for PG& E, said Mark Toney, executive director of The Utility Reform Network consumer group.
“We’re looking at a company that really seems adrift,” Toney said. “It’s just extremely concerning.”
PG& E told regulators that customers in the area where the Zogg Fire began, near Zogg Mine Road and Jenny Bird Lane north of Igo, are served by a 12,000volt circuit called Girvan 1101. On the day the Zogg Fire began, a PG& E SmartMeter and a line recloser in the area “reported alarms and other activity between approximately 2: 40 p. m. and 3: 06 p. m., when the line recloser deenergized that portion of the circuit,” the company said in a report to the California Public Utilities Commission. Reclosers are akin to automatic circuit breakers that can restart power after an electrical line trips off.
The Zogg Fire started at 4: 03 p. m., according to Cal Fire.
“The data currently available to PG& E do not establish the causes of the activity on the Girvan 1101 circuit or the locations of these causes,” PG& E said in its report.
As of Friday, the Zogg Fire was 95% contained.
PG& E equipment has in previous years caused fires in the North Bay’s Wine Country. But the company has not reported any possible connection to the Glass Fire still burning in the region.