The state Public Utilities Commission has imposed nearly $2 billion in penalties on the Pacific Gas and Electric Company for the utility’s role in Northern California’s catastrophic 2017 and 2018 wildfires. 

The $1.937 billion penalty, the largest ever assessed by the CPUC, reflects a settlement between PG&E, the commission, and the Coalition of California Utility Employees. In addition, any tax savings realized by the company associated with shareholder-funded operating expenses will go to PG&E customers. PG&E estimates those benefits may be as much as $425.5 million.

Most of the penalty comes by prohibiting PG&E from seeking to recover $1.823 billion from ratepayers for wildlife-related costs due to the wildfires. That cost will instead be paid by company shareholders, and is expected to save PG&E residential customers approximately 3% on their bills in 2021 and beyond.

The company will pay an additional $114 million for power system enhancements to reduce the possibility of future wildfires caused by PG&E facilities; the funding of local Fire Safe Councils focusing on community-based wildfire prevention and mitigation efforts; and for funding the California Foundation for Independent Living Centers for affected customers before, during, and after disasters. 

Extensive wildfires in Northern California in October 2017, some of which were caused by PG&E electrical transmission lines, burned more than 245,000 acres, destroyed an estimated 8,900 structures, forced 100,000 people to evacuate, and caused 44 deaths. In November 2018, a wildfire ignited by PG&E power lines burned more than 153,000 acres, destroyed 18,800 structures, and caused 85 deaths.

PG&E subsequently pled guilty to 84 counts of involuntary manslaughter for its role in causing the 2018 Camp Fire that destroyed the town of Paradise. In 2019, the company filed for Chapter 11 bankruptcy.

“The scope of the devastation caused by PG&E’s misconduct demands this record penalty,” said CPUC Commissioner Clifford Rechtschaffen. “It is one of many aggressive steps being taken by the CPUC to hold PG&E accountable for failing to keep public safety a top priority.”