PG&E to pay Sonoma County, four cities total of $31 million in Kincade fire settlement

PG&E will pay $31 million to Sonoma County and the cities of Santa Rosa, Windsor, Cloverdale and Healdsburg for government damages incurred in the 2019 Kincade fire, the largest wildfire in county history and one responsible for the loss of more than 170 homes.

The vast majority of those funds, about 82% of what is left after legal expenses, will go to the county, as the fire did its worst damage in the unincorporated area.

The settlement, however, is far from resolving Kincade fire liabilities for PG&E, which faces criminal charges and waves of damage claims from land and homeowners, vineyard operators and others who lost property to the flames. The 77,758-acre blaze was halted by firefighters at the edge of Windsor, but not before it claimed more than 370 structures, including winery and farm buildings.

In an April 29 filing with the federal Securities and Exchange Commission, PG&E reported potential liabilities of up to $800 million resulting from the fire.

Public entities tend to reach settlements first, in part because their accounting of losses is more efficient, said Santa Rosa attorney Roy Miller, whose firm represents about 210 Kincade clients with claims against PG&E.

The utility appears to be moving quicker to resolve disputes over the Kincade fire than previous fires, according to Miller and John Fiske, a lead attorney for the local governments.

“We’re going to get the (Kincade) cases settled and funded before we get the 2017 and 2018 people paid,” Miller predicted. “That process is dragging through bankruptcy proceedings, and that just sucks.”

Compensation for the 2017 and 2018 fires has been a painful process for many who lost property and even loved ones. In January 2019, PG&E filed for bankruptcy in the wake of the deadly Camp fire and under mounting liabilities estimated at more than $30 billion at the time. The utility emerged from bankruptcy in late July 2020 and established a trust for 2017 and 2018 fire victims.

Payments to those individuals have lagged, however, as the trust racked up $51 million in overhead costs while dispensing only $7 million to victims in its first year, KQED reported earlier this month. In a more recent window, by April 30, more than 9,000 claimants had received a total of $195 million in payments, trust records showed.

The county and four cities announced their settlement Wednesday morning, a day after court proceedings continued in a separate criminal case filed by Sonoma County District Attorney Jill Ravitch against the utility over its role in sparking the Kincade fire.

Cal Fire ruled in July 2020 that PG&E transmission lines had sparked the blaze on the hot, dry and windy day of Oct. 23, 2019. It erupted in The Geysers area of the Mayacamas Mountains in northeastern Sonoma County.

The fire threatened parts of Geyserville, Healdsburg, Windsor and Santa Rosa, ultimately destroying 174 homes and 200 other structures.

The extreme weather conditions and westward path of the blaze spurred Sonoma County Sheriff Mark Essick to order the evacuation of nearly 200,000 people in an area stretching from east of Highway 101 to the Sonoma Coast. It was the largest mass evacuation in county history.

Cal Fire investigators traced the start of the fire to a broken piece of equipment on a PG&E high-voltage transmission line that remained energized, though high-risk fire weather had prompted the utility to turn off electricity elsewhere.

The civil case that led to the latest settlement was litigated by Fiske, a San Diego attorney who specializes in wildfire litigation and previously represented Sonoma County and Santa Rosa in their case against PG&E after the 2017 firestorm.

The county and four cities filed their lawsuit over the Kincade fire on Nov. 17, 2020, and the settlement was reached within six months, an unusually quick resolution with an investor-owned utility, Fiske said.

“PG&E was ready, willing and able to engage in negotiations after Cal Fire had issued its findings and determinations,” he said. “We think it’s a very fair and reasonable resolution.”

The new settlement funds should hit county and city coffers in June or July, Fiske said, and the settlement agreement puts no restrictions on how the Board of Supervisors and city councils spend the money.

“Our first need is to pay ourselves back,” said Supervisor Lynda Hopkins, the board chair. “Every time there is a disaster we are pulling money sometimes out of reserves, sometimes out of other funds, in order to pay for that upfront disaster response.”

She noted that any decision about how to use the funds would come from the full board. Supervisor James Gore, who represents the area burned in the Kincade fire, said the settlement amount wouldn’t do much more than recoup county costs.

“The amount was primarily negotiated based on costs incurred for responding and dealing with (the fire),” he said. “This was a good deal, but it’s not the kind of money that’s a generational investment like after the Tubbs fire.”

The settlement is the second payout from PG&E to local governments in as many years. It pales in comparison to the first, a July 2020 resolution from government claims over the deadly and far more destructive 2017 fires. In that case, Santa Rosa received $95 million from PG&E and Sonoma County received $149 million. Before legal fees, the total payouts to the two governments were significantly higher: $117.8 million for Santa Rosa and $184 million for the county — highlighting the high costs of attorneys and court fees for wildfire litigation.

Gore called on PG&E to bolster its investments in grid modernization and fire prevention — spending that the utility has touted in the aftermath of recent catastrophic fire seasons. “I’d much rather they put $30 million into strengthening and hardening the grid in my county rather than paying us $30 million back for a fire,” he said.

In a statement, PG&E embraced the latest settlement, which also included around $22 million in payments to Shasta County and Tehama County for damages from the 2020 Zogg fire.

“Local cities and counties are critical to the fabric of our lives,” PG&E CEO Patti Poppe said in the statement. “Today’s resolution reflects our commitment to supporting them and all they are doing to rebuild after these two fires.”

PG&E, however, is vigorously contesting the criminal charges brought by Ravitch in Sonoma County Superior Court. Her office has charged the utility with five felonies and 28 misdemeanors, and PG&E has sought to have the majority of them thrown out in court.

A pair of the felony charges stem from two children who suffered due to heavy smoke and ash from fire that burned over 16 days. Ravitch also has accused the company of violating environmental laws.

The criminal case could result in fines or criminal restitution for the company, Ravitch said in a Wednesday interview.

“Primarily it’s about accountability, and that is why we chose to file criminal charges,” Ravitch said. “People were injured, property was damaged, and PG&E in our view bears responsibility.”

PG&E’s lawyers are contesting 20 of the 33 charges. The two sides will make oral arguments on PG&E’s motion to dismiss those charges in late July, according to the District Attorney’s Office.

You can reach Staff Writer Andrew Graham at 707-526-8667 or andrew.graham@pressdemocrat.com. On Twitter @AndrewGraham88.