California fines PG&E over Kincade blaze

SACRAMENTO, Calif. — California regulators handed PG&E Corp. a $125 million penalty Thursday over the Kincade fire, which sparked a massive evacuation in Sonoma County at the same time PG&E was blacking out hundreds of thousands of homes to reduce wildfire risks.

PG&E — which is also facing criminal prosecution and millions in civil claims from the October 2019 fire — will pay the state a $40 million fine and will swallow $85 million in fire-related costs that otherwise could have been billed to ratepayers. The penalties, implemented through a negotiated settlement with the company, were approved by the California Public Utilities Commission.

The Kincade fire occurred at a particularly turbulent moment in PG&E’s history. The company was already in Chapter 11 bankruptcy proceedings because of billions of dollars in damages caused by the Camp Fire and other wildfires. In October 2019, it engineered a series of “public safety power shutoffs” — deliberate blackouts across a wide swath of Northern California to tamp down fire risks during a particularly fierce series of Diablo windstorms.

Nonetheless, the Kincade fire ignited. Cal Fire determined that the fire was started by a faulty transmission line near Geyserville — a piece of equipment that wasn’t shut down during the blackouts.

More than 180,000 residents were evacuated and more than 77,000 acres burned in what became the largest wildfire in the state that year. No one died, but four people were hurt and 374 homes and other buildings, including some wineries, were destroyed.

As the fire raged and the blackouts continued, a furious Gov. Gavin Newsom publicly floated the idea of engineering a government takeover of PG&E, or a sale to an investor such as Warren Buffett. Ultimately, Newsom approved the beleaguered company’s bankruptcy reorganization plan, which left PG&E intact but under new leadership.

Clifford Rechtschaffen, a member of the Public Utilities Commission, called the Kincade fire “yet another unfortunate incident of PG&E misconduct.”

The commission voted 3-2 to approve the penalty. The two dissenting commissioners, Darcie Houck and Genevieve Shiroma, said they felt the penalty was rushed through without sufficient transparency or public input. Houck called it “a black-box settlement.”

PG&E said in a prepared statement that it disagrees with the PUC’s findings that it violated safety regulations, it acknowledges that its transmission line caused the fire. “We believe the settlement will assist in allowing all parties to move forward from the fire, and permit us to focus on compensating victims and making our energy system safer.”

PG&E still faces considerable legal and financial headaches over the Kincade fire. The company has been indicted on criminal charges by the Sonoma County district attorney. PG&E has told investors that its civil liabilities from private lawsuits could hit $625 million.