What Cal Fire's report on the Tubbs Fire means for PG&E's bankruptcy

Friday, January 25, 2019

What the Tubbs Fire report means for PG&E's bankruptcy

A bombshell Cal Fire report says the Tubbs Fire that destroyed thousands of Santa Rosa homes, was not caused by PG&E equipment but rather electrical equipment on private property. So what does this for PG&E's possible bankruptcy?

SAN FRANCISCO, Calif. (KGO) -- A bombshell Cal Fire report says that the Tubbs Fire that destroyed thousands of Santa Rosa homes, was not caused by PG&E equipment but rather electrical equipment on private property.

22 people were killed and 5,600 structures were destroyed in the Tubbs Fire, the deadliest and most destructive of the 2017 North Bay Wildfires.

This report resulted from a 16-month investigation and is expected to have a huge impact on the utility's pending bankruptcy and the lawsuits filed by hundreds of fire victims across Napa and Sonoma Counties.

Here's the big unanswered questions created by Thursday's report:

What does this mean for PG&E's pending bankruptcy?

The utility is still expected to go bankrupt. But if they are not liable for starting the Tubbs Fire their financial responsibility will be significantly reduced. Estimates put the damages for the 2017 and 2018 fires at a combined $30 Billion dollars.

PG&E acknowledged the situation in a statement: "Regardless of today's announcement, PG&E still faces extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrade to below investment grade. Resolving the legal liabilities and financial challenges stemming from the 2017 and 2018 wildfires will be enormously complex and will require us to address multiple stakeholder interests, including thousands of wildfire victims and others who have already made claims and likely thousands of others we expect to make claims."

I-TEAM: Dan Noyes' explains what Cal Fire's bombshell report means

The Cal Fire report made PG&E stock jump, but attorneys for wildfire victims tell me, it doesn't change anything-- that PG&E is still on the hook.

What happens to the fire victims?

The CAL FIRE findings are important but they are not the final word. The report is not admissible in court. None the less this appears to make it harder to win a lawsuit based on inverse condemnation. Inverse condemnation gives property owners the right to sue PG&E for taking property without proper payment.

But this still leaves open a negligence case. The big questions that could impact that case: Was PG&E negligent by providing power to the private property where the fire was caused? And/or was the company in any other way negligent in connection with the Tubbs Fire?

What does this mean for Napa & Sonoma Counties?

Both counties filed suit against PG&E looking to recoup the costs of fighting the fire for 23 days and the months-long cleanup efforts afterward. They're in the same legal court as the fire victims. This report makes it harder for them to win in court, but there are still ways for them to recoup costs.

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