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PG&E Avoids Criminal Charges from California Wildfires

The state's largest utility agreed to pay more than $55 million in order to avoid prosecution on last year's Dixie Fire — the second largest wildfire in California's recorded history — and the 2019 Kincade Fire in Sonoma County.

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(TNS) - PG& E Corp. cut a dramatic deal with prosecutors in six California counties Monday that enables it to sidestep criminal prosecution from two notorious wildfires. Pacific Gas and Electric Co. instead will pay tens of millions of dollars in fines, charitable contributions and other expenditures.

The state's largest utility agreed to pay more than $55 million in order to avoid prosecution on last year's Dixie Fire — the second largest wildfire in California's recorded history — and the 2019 Kincade Fire in Sonoma County. The company had already been indicted in connection with the Kincade Fire and was being investigated by district attorneys in five counties following the Dixie Fire. Under the deal, the DA in Sonoma County dropped the criminal case and Sacramento Valley prosecutors will forego filing charges.

The U.S. Attorney's Office in Sacramento has also been investigating PG&E's role in the Dixie Fire, and wasn't a party to the settlement. A spokeswoman for the U.S. attorney had no immediate comment.

Both fires were caused by PG&E power lines.

The deal is likely to be controversial among fire victims and others, given PG&E's track record on wildfire safety and the amount of damage done by the two fires. But the district attorney in Plumas County — where the worst of the damage from the Dixie Fire occurred — said the agreement made sense.

"Making this agreement required a level of trust and partnership in meeting Plumas County's needs," said Plumas DA David Hollister in a prepared statement. " PG&E's new leadership team has demonstrated they are committed to change and will continue to work towards earning our trust."

Kevin Goss, a Plumas County supervisor whose Greenville pharmacy burned down, said he was comfortable with the settlement.

"Dragging them through a criminal proceeding wasn't going to solve the problem," he said. "It's not going to provide us with the tools we need to rebuild."

The cash settlement, he said, "is a start, it's a good thing."

The agreement, announced Monday at a hearing in Sonoma County Superior Court, will actually be considerably more expensive than any penalties that would result from guilty verdicts. No one died in the Dixie Fire, and the maximum criminal fine would have been $329,417, according to calculations made by the DA's.

The DA's, in a joint statement, said it made more sense to make a civil settlement "to maximize the return to the fire victims rather than to seek criminal penalties."

The utility only paid $4 million in fines after pleading guilty to 85 felony charges in the 2018 Camp Fire, the deadliest wildfire ever in California. The judge lamented that the $4 million was the maximum penalty under the law.

Unless the federal government decides to prosecute on the Dixie Fire, the deal enables PG&E to avoid the stigma of more criminal convictions on its record as it struggles to polish its tattered reputation while spending billions every year to make improvements in wildfire safety.

"We are committed to doing our part, and we look forward to a long partnership with these communities to make it right and make it safe," PG&E Chief Executive Patti Poppe said in a prepared statement.

The agreement doesn't halt the avalanche of private litigation from homeowners, business owners and others who lost property in the Dixie and Kincade fires. PG&E said it expects liabilities from the Kincade Fire to reach $800 million and the Dixie Fire to hit $1.15 billion.

Nor does it end PG&E's legal woes from the 2020 Zogg Fire, which killed four people in Shasta County west of Redding. The utility was indicted on 31 felony and misdemeanor charges by the Shasta DA last fall.

Under the deal announced Monday, PG&E will pay a $7.5 million civil fine in Sonoma County and $1 million each to the five counties where the Dixie Fire burned: Butte, Lassen, Plumas, Shasta and Tehama. It will also donate more than $35 million to fire safe councils, volunteer fire departments and other charities in each of the counties.

Moreover, the utility agreed to help Santa Rosa Junior College expand its fire-technology and safety center, and contribute to a vegetation-management training program. at the Santa Rosa college and several colleges in the counties affected by the Dixie Fire.

Those payments, PG&E said, will total $55 million and will be borne by the utility's shareholders, not ratepayers.

In addition, PG&E agreed to hire as many as 200 employees total in the six counties to work specifically on wildfire-safety issues, including vegetation management and equipment inspections. Their work will be monitored for five years by a utility consulting firm, Filsinger Energy Partners, which will report directly to the county prosecutors. While the consultants will operate independently of PG&E, they will be paid by the utility, at a cost of about $15 million a year.

PG&E already agreed last December to pay $125 million in penalties to the California Public Utilities Commission for sparking the Kincaid Fire.

Kincade Fire trial was looming for PG&E

Sonoma prosecutors originally indicted PG&E on five felonies and 28 misdemeanors in the Kincade Fire, which burned 77,758 acres and destroyed 374 homes and other buildings. The utility pleaded innocent but lawyers indicated at pre-trial hearings in recent months that a settlement was being discussed.

The fire began in late October 2019 when a cable broke on a transmission line near Geyersville, causing sparks to shower on the dry ground below. PG&E had imposed a blackout in the area but decided to leave the transmission line going because transmission wires are generally far removed from trees and other vegetation. Since then, PG&E has said it is more likely to shut off transmission lines during its wildfire-safety blackouts. Transmission lines carry electricity in bulk, while distribution lines bring power to individual homes and business.

Although no one died, the Kincade Fire became an especially bleak moment in PG&E history. Nearly 180,000 people were evacuated, and PG&E imposed several more blackouts that week, leaving millions in the dark. PG&E was already in bankruptcy, following the billions in liabilities generated by the Camp Fire and the 2017 wine country fires, and a furious Gov. Gavin Newsom threatened to engineer a public takeover of the troubled utility. Eventually he relented after PG&E agreed to overhaul its leadership, and the company emerged from bankruptcy in 2020.

The Dixie Fire began last July when a tree brushed against distribution lines along the Feather River near the Butte- Plumas county line. It burned 963,000 acres and destroyed 1,329 homes and other structures, including much of the tiny Plumas County community of Greenville. PG&E readily acknowledged that its equipment ignited the fire but said it had done nothing wrong, arguing that the tree was still alive and the power equipment had been recently inspected.

Poppe, in an interview with The Sacramento Bee last fall, said the Dixie Fire showed that climate change and drought are making PG&E's territory more dangerous than ever.

"We've seen all over the place trees just falling over," Poppe said. "What we learned from the Dixie Fire is that as climate conditions continue to worsen ... our response has to evolve with it."

Right after the Dixie Fire, the company instituted a rapid shutoff system on its circuit breakers in wildfire-prone areas. The system wound up blacking out hundreds of thousands of customers last summer — but PG&E said it also prevented a slew of additional fires. The company plans to expand the system during the upcoming fire season.

PG&E has also launched an ambitious plan to plant 10,000 miles of wires underground over the next several years, a project that will cost around $25 billion.

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