PG&E now acknowledges that its equipment likely ignited the Dixie Fire. In its July 18 report to state regulators, it admits that there was a power outage, that a troubleman went to investigate, that the troubleman saw a tree leaning against PG&E wires, that the troubleman saw blown fuses on the ground nearby, and that he also saw a fire starting near the base of the tree.
“The responding PG&E troubleman observed from a distance what he thought was a blown fuse on the PG&E Bucks Creek 1101 12kV Overhead Distribution Circuit uphill from his location. Due to the challenging terrain and road work resulting in a bridge closure, he was not able to reach the pole with the fuse until approximately 1640 hours. There he observed two of three fuses blown and what appeared to him to be a healthy green tree leaning into the Bucks Creek 1101 12 kV conductor, which was still intact and suspended on the poles. He also observed a fire on the ground near the base of the tree. The troubleman manually removed the third fuse and reported the fire, his supervisor called 9-1-1, and the 9-1-1 operator replied they were aware of the fire and responding. CAL FIRE air support arrived on scene by approximately 1730 hours and began dropping fire retardant and water.”
PG&E is supposed to keep trees trimmed at least 4 feet from its electrical lines to prevent just this sort of fire. PG&E failed to do that. It appears PG&E is liable for the Dixie Fire.
But can PG&E pay? PG&E is now out of bankruptcy, so claims for damages will be made in state court directly against the “New PG&E,” not in federal bankruptcy court against the Fire Victims Trust. According to PG&E recent filing with the Securities and Exchange Commission, PG&E has approximately $300 million in insurance coverage for the Dixie Fire. Fires that PG&E ignites after August 1 are covered by an additional $600 million:
“In April 2021, the Utility purchased approximately $268 million in wildfire liability insurance coverage for the period of April 13, 2021 to April 1, 2022, and approximately $32 million in wildfire liability reinsurance for the period of April 1, 2021 to April 1, 2022 at a cost of approximately $220 million. This coverage is in addition to approximately $11 million in existing wildfire reinsurance for the period of July 1, 2020 to July 1, 2021 and approximately $600 million in existing wildfire liability insurance purchased by the Utility in August 2020 for the period of August 1, 2020 to August 1, 2021. On August 1, 2021, the $600 million of existing wildfire liability coverage is scheduled to renew for the period of August 1, 2021 to August 1, 2022 at a cost of approximately $516 million pursuant to multi-year policy terms. The Utility’s wildfire liability insurance is subject to an initial self-insured retention of $60 million.”
Will PG&E’s ultimate liability for the Dixie Fire exceed the $300 million in available insurance coverage? It’s too soon to tell.
