The bankrupt utility firm will accept 84 counts of involuntary manslaughter and pay $3.5bn in penalties for its involvement in the 2018 Camp Fire disaster
California utility Pacific Gas and Electric (PG&E) will plead guilty to 84 counts of involuntary manslaughter and one count of unlawfully starting a fire, in connection to the Camp Fire incident that ravaged the US state in 2018.
It has also agreed to pay a penalty of $3.5m, and a further $500,000 to the district attorney’s office to cover the costs of investigations into the blaze.
Early last year, PG&E filed for bankruptcy under the weight of billions of dollars in liability claims from those affected by several wildfires in the state, which regulators deemed to have been sparked by faulty equipment operated by the utility.
An announcement last week confirmed it had agreed an “exit financing” package with the district court to settle outstanding lawsuits and expedite its emergence from bankruptcy status.
PG&E manslaughter charges ‘underscore the reality of all that was lost’
At its height, the Camp Fire blaze spread across more than 150,000 acres of California, destroying the town of Paradise in Butte County and causing damage to critical infrastructure and thousands of buildings.
Alongside the plea agreement, the utility firm has committed to spend up to $15m over five years to provide water to residents impacted by fire damage to the Miocene Canal in the region.
The origin of the deadly Camp Fire was traced by investigators back to an ageing electrical transmission line owned and operated by PG&E, which the utility is accused of failing to properly maintain ahead of its failure and subsequent ignition of the fire in November 2018.
Company president and CEO Bill Johnson said: “Our equipment started the fire. Those are the facts, and with this plea agreement we accept responsibility for our role in the fire.
“We cannot change the devastation or ever forget the loss of life that occurred. All of us at PG&E deeply regret this tragedy and the company’s part in it.
“Today’s charges underscore the reality of all that was lost, and we hope that accepting those charges helps bring more certainty to the path forward so we can get victims paid fairly and quickly.”
Camp Fire blaze the latest in a string of public safety incidents for PG&E
PG&E supplies electricity to around 16 million customers across northern and central California, but has been dogged by safety issues in recent years — including the 2010 San Bruno gas pipeline explosion, the 2015 Butte fire and a string of wildfires in 2017 traced back by investigators to faulty equipment operated by the company.
Late last year, the utility came under fire for its conduct in the mass power outages across California during the height of more wildfires across the US state which left millions of customers without access to electricity.
Johnson added: “We want wildfire victims, our customers, our regulators and leaders to know that the lessons we learned from the Camp Fire remain a driving force for us to transform this company.
“We have changed and enhanced our inspection and operational protocols to help make sure this doesn’t happen again. Every single day, we have thousands of dedicated employees who are working diligently to harden the system, reduce the risk of wildfire and help deliver safe, reliable energy to our customers.
“We will emerge from Chapter 11 [bankruptcy] as a different company prepared to serve California for the long term.”
PG&E agrees $25.5bn in liability settlements to speed up bankruptcy exit
Having filed for bankruptcy in January 2019, PG&E is now making a concerted push to emerge from Chapter 11 status, announcing late last week an exit financing agreement with officials to settle outstanding lawsuits that would pave the way for a resumption of normal operations.
As part of the plan, the utility has agreed to compensate wildfire victims to the tune of $25.5bn — including $13.5bn to resolve claims relating to the 2015 Butte Fire, 2017 wildfires and the Camp Fire in 2018.
A further $11bn will be paid to insurers while $1bn has been earmarked for settlements with cities, counties, and other public entities.
Johnson has said the firm hopes to finalise these arrangements “as soon as possible” so PG&E will be eligible to participate in California’s “wildfire fund” – a $21bn reserve signed off by state governor Gavin Newsom designed to stabilise the region’s power distribution sector.
The deadline for PG&E to meet the conditions of the financial stimulus package, which include settling liability claims with wildfire victims and committing to equipment upgrades, is the end of June.