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Two billion in penalties floated for PG&E over wildfires

The California Public Utilities Commission on Thursday proposed a $2.14 billion penalty against PG&E for its role in the catastrophic wildfires in the North Bay and Butte County in 2017 and 2018.

The proposed decision by Administrative Law Judge Sophia Park adds $462 million to a $1.7 billion penalty settlement agreed to last year by PG&E, the commission’s safety staff, and utility union representatives for violations of regulations.

Like the previous settlement, the proposed decision would require shareholders rather than customers to absorb the cost of the penalty. But in addition to increasing the penalty amount, the revised proposal would require that any tax savings PG&E gains from tax deductions for the penalty would benefit customers and not shareholders.

If PG&E agrees to accept the revised penalty within 20 days and no party in the proceeding objects to it, the proposed penalty will become a decision of the five-member commission.

PG&E spokesman James Noonan said, “We’re disappointed” with the proposed decision, saying that “PG&E worked diligently over many months with multiple parties” to reach the previous settlement. He did not say whether PG&E will agree to the revised penalty.

The proposal includes a $1.8 billion “disallowance” for wildfire expenses, meaning that PG&E can’t recover those costs through higher rates for customers.

It also includes a $200 million fine payable to the state’s general fund and $114 million for corrective actions and initiatives.

The CPUC said the proposed penalty is the largest ever assessed by the agency.

In 2015, the CPUC imposed a then-record $1.6 billion penalty on PG&E for a fatal natural gas pipeline explosion in San Bruno in 2010. PG&E was able to take a tax write-off for most of that amount.

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