Insurers Sue California Utility Over Wildfire Damages

Jonathan J. Cooper | AP

Several insurance companies have filed lawsuits blaming Pacific Gas & Electric Co. for a deadly California wildfire that destroyed 14,000 homes and triggered billions of dollars in insurance claims.

The lawsuits filed by Allstate, State Farm, USAA and their subsidiaries come on top of several other cases filed by victims of the Camp Fire, which devastated the towns of Paradise, Magalia and Concow north of Sacramento after it started Nov. 8.

Investigators have not pinpointed a cause for the fire. But the insurance companies note in their lawsuits that flames ignited near the site of a transmission-line irregularity reported by the utility. They also note a potential second ignition point involving PG&E distribution lines.

Under California law, PG&E is held entirely liable if lawyers can prove the fire is linked to the utility's power lines or other equipment — a fact that sent shares of the company tumbling following the start of the fire.

Following a series of deadly fires in 2017 in Northern California's wine country, PG&E executives and lobbyists tried to convince state lawmakers to change the legal standard and reduce the company's liability. Lawmakers declined, but they allowed the company to pass along some of the costs from the 2017 fires to its customers in hopes of sparing it from bankruptcy. The law does not help the company for the 2018 blazes.

The lawsuits were filed last month in Sacramento County Superior Court. They were first reported by the Sacramento Business Journal.

"We are aware of lawsuits regarding the Camp Fire," Lynsey Paulo, a PG&E spokeswoman, said in a statement. "Our focus continues to be on assessing infrastructure to further enhance safety and helping our customers recover and rebuild."

PG&E, one of the nation's largest electric utilities with more than 5 million customers in Northern and Central California, is facing legal and regulatory challenges on a number of fronts, including the potential for criminal charges.

The California attorney general told a judge last week that PG&E could face charges as serious as involuntary manslaughter or murder if investigators determine that reckless operation or maintenance of power equipment caused any recent wildfires in the state.

A federal judge overseeing a case that resulted in a criminal conviction for the company following a 2010 pipeline explosion has asked PG&E to explain any role it may have had in the Camp Fire. The judge could impose new requirements on the utility if it's found to have violated its probation in the pipeline case.