PG&E Ordered to Pay $3.5 Million Fine for Causing Deadly Fire

A California judge ordered Pacific Gas & Electric on Thursday to pay a $3.5 million fine for causing the Camp Fire, the blaze that killed scores of people and destroyed the town of Paradise in 2018.

Judge Michael R. Deems of Butte County Superior Court read the sentence, which matched a plea agreement between the company and a local prosecutor, after hearing statements from survivors of the 84 people killed in the fire, many of whom said PG&E was getting away with a slap on the wrist. The judge seemed to echo that sentiment.

“If these crimes were attributed to an actual human person rather than a corporation, the anticipated sentence based on the applicable statutes to which the defendant has pleaded guilty would be 90 years to be served in state prison,” Judge Deems said. “Nevertheless, the court’s sentencing options are limited. As a corporation, PG&E cannot be sentenced to prison. The only punishment that the court is authorized to impose in this situation is a fine.”

PG&E pleaded guilty on Tuesday to 84 counts of involuntary manslaughter and one count of illegally causing the fire. An estimated $30 billion in liability from that and other fires forced the company to seek bankruptcy protection in January 2019. State regulators have said that the utility repeatedly failed to maintain a transmission line that broke from a nearly 100-year-old tower, igniting the Camp Fire. The company’s failure was all the more glaring because the line cut through a forested and mountainous area, and some of the company’s towers had been knocked down by strong winds well before that blaze.

The manslaughter case is the second time that PG&E, California’s largest utility, has been found to have committed serious crimes in recent years. PG&E was convicted of six felonies in federal court after one of its gas pipelines exploded in 2010, killing eight people in the Bay Area town of San Bruno. The company has been on probation since that conviction in 2015.

In the Camp Fire case, the Butte County district attorney, Michael Ramsey, has said he sought the maximum sentence allowed under California law for the charges he brought. Separately, the California Public Utilities Commission has imposed an almost $2 billion penalty on the utility for its negligence in causing fires in 2017 and 2018.

A federal judge overseeing PG&E’s conviction in the San Bruno case could impose additional penalties on the utility for violating its probation.

Dozens of survivors gave tear-filled statements about losing relatives and friends. Some told the court that the $3.5 million fine fell far short of the punishment PG&E deserved. The company also must pay Mr. Ramsey’s office $500,000 for the costs of its investigation and prosecution.

“The court is supposed to provide justice,” said Joseph Downer, whose brother Andrew died in the fire. “I don’t believe justice is served by a $3.5 million fine. If ever there was a corporation that deserved to go to prison, it’s PG&E.”

Mr. Downer said he now suffers depression and wakes up in the middle of the night. “This whole event has been super tragic,” he told the court. “This is my big brother. This is the guy who taught me so much in life. PG&E took all of this from me, all of it.”

Philip Binstock recounted the life of his father, Julian, who grew up in a family of modest means but went on to attend Harvard and become a vice president at Warner Communications. He also angrily criticized PG&E for its failings.

“You had the capacity to know what you were doing would kill people,” Mr. Binstock said. “You knew what you were doing was wrong. And rather than reduce your bonuses, you allowed your failed equipment and your improper inspections to kill people.”

William L. Smith, PG&E’s incoming interim chief executive, told the court that the company accepted blame for the fire and was working to improve.

“It can never be said too many times, we accept responsibility,” Mr. Smith said. “On behalf on everyone at PG&E, I’m truly sorry for the loss of life.”

State officials have required the company to make major changes. PG&E needed California’s support to exit bankruptcy, and Gov. Gavin Newsom demanded the utility reform its board, change its leadership structure, improve safety, compensate fire victims and exit bankruptcy by June 30.

Although the governor has no direct authority over the bankruptcy case, PG&E had to meet his requirements in order to participate in a $20 billion fund that will help cover liability utilities could face from future fires started by their equipment. PG&E needs access to the fund to convince stock and bond investors that it would not slip into bankruptcy again for starting fires.

U.S. Bankruptcy Judge Dennis Montali said in a memorandum on Wednesday that the company’s reorganization plan, which will provide $13.5 billion to wildfire victims, was feasible and the only one before the court. He has scheduled a hearing for Friday, at which he is expected to give his final approval to PG&E’s plan.

“All of the victims, all of the over sixteen million PG&E customers in Northern California, indeed all of Northern California if not the rest of the country, know the story,” Judge Montali wrote in his memo. “Leaving tens of thousands of fire survivors, contract parties, lenders, general creditors, allegedly defrauded investors, equity owners and countless others with no other options on the horizon is not an acceptable alternative.”

Source link