Sonoma County, Santa Rosa part of $415 million pact with PG&E over wildfire claims
PG&E has agreed to pay $415 million to about a dozen North Bay governments and public agencies hit by wildfires in October 2017, including Sonoma County and the City of Santa Rosa, to help compensate them for costs borne by taxpayers because of the disasters.
The tentative agreement is part of a $1 billion proposal to settle local government claims against the state’s largest utility for wildfires sparked by PG&E’s electric grid going back to 2015. The largest chunk of the money — about $570 million — will go to governments hit by the 2018 Camp fire in Butte County, the deadliest and most destructive fire in California history.
The 2017 fires took the greatest toll in Sonoma County, where blazes destroyed about 5,300 homes and caused widespread damage to infrastructure, from roads to water systems, during the fires and subsequent cleanup effort. Local governments have been on the hook for a massive outlay of resources to respond to the fires, their cleanup and rebuilding that continues today.
“From day one, the county’s mantra has been that we just want to be made whole for the losses we incurred,” Sonoma County Board of Supervisors Chairman David Rabbitt said, acknowledging the agreement is not final. “This, for us, is an important step.”
The proposal is the first PG&E has reached through mediation proceedings with its creditors since January, when the utility filed for bankruptcy amid mounting liabilities — which the company has estimated at $30 billion tied to catastrophic wildfires. The deal and any other settlement proposals must be approved by the bankruptcy judge overseeing PG&E’s reorganization, a process anticipated to take another year.
The deal does not involve claims from people who lost family members, homes or businesses. It also excludes claims from insurance companies seeking compensation for the financial toll of wildfires sparked by the utility’s equipment.
The negotiation process began earlier this year overseen by mediator Jay Gandhi, a retired judge. PG&E and the government parties accepted Gandhi’s initial proposal Tuesday after several days of negotiations in San Francisco. They are still finalizing how to divvy up the $415 million among North Bay governments and agencies.
The agreement “is an important first step toward an orderly, fair and expeditious resolution of wildfire claims and a demonstration of our willingness to work collaboratively with stakeholders to achieve mutually acceptable resolutions,” PG&E spokesman Ari Vanrenen said in a statement.
PG&E provides electric and gas services across 70,000 square miles of Northern and Central California and employs 24,000 people, including more than 700 in Sonoma County.
Vanrenen said the utility hopes to continue “making progress with other stakeholders.”
The utility put the number of its creditors between 50,000 and 100,000, including bondholders, credit holders, shareholders, employees, state regulators and wildfire victims after filing for Chapter 11 protection in U.S. Bankruptcy Court in San Francisco in January.
Cal Fire has implicated PG&E’s electrical equipment in all but one of the major fires that have broken out in recent years: the Tubbs fire, which started near Calistoga in northern Napa County and burned westward over the Mayacamas Mountains into Sonoma County and Santa Rosa neighborhoods.
Cal Fire said the Tubbs fire was sparked by a private electrical system, not PG&E equipment. That became a “hotly contested” focal point in the mediation negotiations, where PG&E representatives argued the utility wasn’t responsible for losses related to the Tubbs fire, according to Scott Summy, an attorney with Baron & Budd, which represented the public entities in the negotiations.