PG&E was responsible for sparking at least some of the 2017 wildfires in Northern California, according to preliminary results from the California Department of Forestry and Fire Protection (Cal Fire). If the fires can be tied to the utility's actions, inaction or equipment, PG&E could be held liable for billions in property damage under a legal theory called "inverse condemnation." Under current law, claimants need not show that a utility was negligent.
Under California law, utilities like PG&E and Southern California Edison are legally responsible for damage caused by their equipment even when there is no showing of negligence. This is called "inverse condemnation." The idea is that when government entities or utilities cause major damage to private property, their actions are in essence a taking of that property. Property takings are regulated by the federal and California constitutions, both of which mandate that any taking be justly compensated.
Earlier this month, Governor Jerry Brown announced the creation of a special committee to reassess state policy on financial responsibility for wildfires. Under current law, utilities like PG&E and California Edison can be held liable for wildfires sparked by their equipment even if they're not found negligent. This is called "inverse condemnation," and it's a big issue for the utilities.
Pacific Gas & Electric Corp (PG&E) recently released an estimate of its expected losses from last year's Northern California wildfires. In a filing with the Securities and Exchange Commission, PG&E said it planned to take a $2.5-billion charge against its profits for the quarter ending June 30.
Officials from the California Department of Forestry and Fire Protection (Cal Fire) recently released a report tying Pacific Gas and Electric to 12 Northern California fires last fall. Those fires resulted in the deaths of 18 people and caused billions of dollars in damage. Many of them were reportedly sparked when trees or tree parts fell onto PG&E lines, or when the lines were downed. An earlier investigation blamed PG&E for three wildfires, alleging the utility failed to trim trees near power lines.
As we discussed in our last post, the California constitution gives property owners the right to hold utility companies financially responsible for losses caused by their equipment, even if the utility followed state safety rules. Property owners can bring inverse condemnation claims against the utility for the losses they incurred.
California utilities PG&E Corp. and Edison International have been fighting in the courts to avoid liability for damage from last year's wildfires, which were the most destructive in history. Although it has not yet been determined that the utilities were responsible for starting any of the fires, they have been seeking a court ruling that they can't be held liable in an inverse condemnation claim brought by homeowners. The homeowners have reason to suspect that power lines may have sparked the 2017 blazes.