PG&E’s power restoration costs could hit $200 million

Restoring power to customers after last month’s devastating Northern California wildfires will cost an estimated $160 million to $200 million, PG&E reported Thursday.

It was the first time the utility put a figure on costs associated with the deadly fires, costs that are sure to rise if the utility’s power lines are found to have caused the most expensive fires in U.S. history.

The blazes burned 142 square miles of Sonoma County, killed at least 23 people and laid waste to about 7,000 structures, mostly homes. Damage has been estimated at $3 billion.

PG&E officials stressed that the cost estimate was for the 4,300 utility workers who responded to the fires and toiled for weeks to get power restored to the 360,000 customers affected by the fires.

The issue of legal responsibility was one for another day, Geisha Williams, chief executive of the utility, told analysts in the company’s third-quarter conference call.

“This was an extraordinary confluence of events, and right now it’s simply too early to make an assumption about liability,” Williams said.

She acknowledged, however, that there was intense interest in determining the cause of the fires, interest she said the company shared.

“Our communities deserve answers, and we are committed to learning what happened,” she said.

She cautioned, however, against reading too much into the 20 reports that PG&E recently submitted to the regulators documenting damage done to PG&E equipment close to the origin of the fires.

Those reports show damaged power poles, wires and other pieces of utility equipment from at least eight of 10 sites where PG&E reported “electrical safety incidents” in Sonoma and Napa counties.

She noted the reports were “factual” and were not a determination of cause.

Much of the conference call focused on what the utility’s exposure might be under the legal doctrine of inverse condemnation as it has been applied to utilities in the state.

The legal principle, which Williams said is unique to California, is that utilities can be held responsible for people’s property losses even if the company followed all the rules it was supposed to because their property has still been indirectly taken from them without compensation.

Williams said the utility disagreed with that interpretation and would challenge it, if necessary, in this case.

Jason Wells, PG&E’s chief financial officer, said the utility would seek to recoup the power restoration costs from customers under California Public Utilities Commission procedures for rate increases due to “catastrophic events,” but did not offer an estimate.

You can reach Staff Writer Kevin McCallum at 707-521-5207.