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Regulators to scrutinize PG&E's utility equipment failures in wildfires


According to Market Intelligence, December 2022


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Regulators to scrutinize PG&E's utility equipment failures in wildfires

Pacific Gas and Electric Co. has been ordered to preserve all evidence of failed poles and wires related to wildfires that have swept through Napa, Sonoma and Solano counties in Northern California.

California Public Utilities Commission Safety and Enforcement Division Director Elizaveta Malashenko on Oct. 12 issued an evidence preservation order to the PG&E Corp. subsidiary, noting that the Public Utilities Code requires the company to preserve any evidence within its control related to the fires, including "all failed poles, conductors and associated equipment from each fire event."

Malashenko also said PG&E must inform its employees and contractors that they must preserve all emails and other electronic as well as paper documents related to potential causes of the fires, vegetation management and tree-trimming. A similar directive was issued Oct. 13 to telecommunications companies that share poles, equipment and easements with the gas and electric company.

PG&E spokesman Donald Cutler said a "historic wind event" swept across the utility's service area late Oct. 8 and early Oct. 9, with gusts in excess of 75 mph that contributed to some trees, branches and debris impacting electric lines across the North Bay area. Millions of trees have been weakened by years of drought, he said.

"In some cases, we have found instances of wires down, broken poles and impacted infrastructure," Cutler said, noting that those incidents have been reported to the PUC and the California Department of Forestry and Fire Protection.

"We aren't going to speculate about any of the causes of the fires and will support reviews by any relevant regulator or agency," Cutler continued. "We will support and assist with the review of these wildfires by the appropriate regulatory agencies, which is standard practice for wildfire events. Right now, our main focus is on life safety and service restoration."

About 357,000 PG&E customers lost electric power after the fires began Oct. 8. By late Oct. 16, PG&E reported that 94% of those customers had service restored. Gas service was turned off Oct. 9 for about 42,000 customers to protect public safety in the affected areas of Napa, Sonoma and Mendocino counties, but more than 60% of those customers had service restored by early Oct. 16.

PG&E said it activated emergency centers in base camps for its crews in Napa, Sonoma, Mendocino and Lake Counties, saying those crews were working around the clock.

Fires that are still not completely contained have been burning for more than a week. At least 41 people have been killed, according to multiple news services, and more than double that number remained unaccounted for as of Oct. 16. Thousands of acres have burned, including properties in California's famed Napa Valley wine country. More than 5,000 homes and buildings have been destroyed.

Likely fearing that PG&E could be held liable for at least part of the destruction and loss of life, investors rapidly sold shares in the company, driving down its stock price. Fallen electrical lines historically have been a leading cause of wildfires in California.

The PUC is considering denying Sempra Energy subsidiary San Diego Gas & Electric Co. the $379 million it has been seeking from ratepayers as a result of an unrecovered portion of the $2.4 billion the company spent to resolve damage claims and pay legal fees arising from 2007 wildfires.

In addition to liability threats, California's utilities face stiffened regulatory actions if they are found to be negligent in meeting the PUC's toughened standards for maintaining utility equipment and keeping millions of trees trimmed away from power lines.

The regulators repeatedly have warned of the risks of overloaded power poles that utilities share with multiple telecommunications providers. The problem of overburdened utility poles and lax enforcement has been building for years across the state, which has more than 4.2 million utility poles.

Spurred by legislative mandate and PUC President Michael Picker's push for heightened safety measures after PG&E's 2010 San Bruno pipeline disaster, the commission has beefed up safety enforcement and ordered utilities to develop risk assessment measures.

The PUC has been especially hard on PG&E and hired a consultant, who in May concluded that the utility needs to improve its safety performance.