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Death toll in California wildfires grows to 42, PG&E sued by couple who lost home

  • A Santa Rosa couple who lost a home to the deadly Northern California wildfires filed a lawsuit against PG&E, charging the company failed to properly maintain its power infrastructure.
  • Recent reports have cited PG&E's power lines as a possible cause of some of the current wildfires in the state's wine country.
  • PG&E responded Wednesday by saying it won't speculate on the causes of the fires but "will cooperate with the reviews by any relevant regulator or agency."
  • Also, the death toll from the disaster grew to 42 after the remains of a man were found in a Santa Rosa-area residence late Tuesday, officials confirmed Wednesday.
A woman looks out at the destruction caused by the Tubbs fire while holding items of emotional importance salvaged from her childhood home in the Coffey Park neighborhood on October 15, 2017 in Santa Rosa, California.
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A woman looks out at the destruction caused by the Tubbs fire while holding items of emotional importance salvaged from her childhood home in the Coffey Park neighborhood on October 15, 2017 in Santa Rosa, California.

A Santa Rosa couple filed the first lawsuit against PG&E in connection with the deadly Northern California wildfires and alleges negligence and violations of various utility and safety codes.

At the same time, the death toll from the disaster grew to 42 after the remains of a man were found in a residence late Tuesday, the Sonoma County Sheriff's Office confirmed Wednesday morning.

As of Wednesday, 53 people remained missing in Sonoma County alone although there are also wildfires in Napa, Mendocino, Lake, Butte and several other Northern California counties.

One additional death was confirmed in Santa Rosa, the largest city in Sonoma County, when authorities found a man in the Fountaingrove community late Tuesday. Of the 42 deaths so far, 23 have been in Sonoma County.

"We had a missing person report in that [Fountaingrove] area and went to that home and found them dead in the house," Sgt. Spencer Crum of the Sonoma County Sheriff's Office told CNBC.

Grim task

Search and rescue crews continued the grim task of sifting through debris and looking for more bodies Wednesday. Local teams were helped by National Guard troops.

Recent reports have cited Pacific Gas & Electric's power lines as a possible cause of some of the current wildfires in the state's wine country.

PG&E's parent company acknowledged in a regulatory filing Friday with the SEC that the causes of the fires are being investigated by Cal Fire, adding that the probe includes "the possible role of power lines and other facilities" of its utility subsidiary.

Despite an arson arrest Sunday, Cal Fire continues to investigate the cause of the various fires in Northern California.

Weather relief

Weather forecasters are predicting rains Thursday, which could bring welcome relief for firefighters battling the blazes.

In Santa Rosa, a city of about 175,000 people, there were entire neigborhoods that were destroyed as well as hotels and schools.

Cal Fire incident commander Bret Gouvea told reporters at a news conference Wednesday afternoon that within the last 24 hours authorities were able to repopulate more than 6,100 people in Sonoma County to areas they were previously evacuated.

Sonoma County Sheriff Robert Giordano said at the news conference that search and rescue "remains the main focus." He said crews are carefully looking through all burned structures looking for possible victims.

More than 220,000 acres have burned in 13 major fires and destroyed 6,700 homes and other structures, including wineries.

Fire probe

As for the investigation into the wildfires, Cal Fire's Gouvea said the probes "are still ongoing." He added that the investigations are "confidential" at this point.

President Donald Trump sent a tweet Thursday thanking first responders and expressing support for those impacted by the wildfire disaster in California.

One hard hit residential area is the Coffey Park area of Santa Rosa, where the so-called Tubbs Fire caused a firestorm the evening of Oct. 8 and forced people to flee their homes. As of Wednesday afternoon, the Tubbs Fire was 91 percent contained, according to Cal Fire.

Hundreds of homes were lost in Coffey Park, including the residence of Wayne and Jennifer Harvell, who late Tuesday sued PG&E.

Lawsuit against PG&E

The Harvell's lawsuit alleges the wildfires in the wine country "started when electrical infrastructure owned, operated and maintained by PG&E ... came into contact with vegetation inspected and maintained by PG&E." The lawsuit further claims that the couple suffered the loss
of property, injury to livestock and pets, as well as "emotional suffering, fear and anxiety, inconvenience, and other harm caused by the wrongful conduct of PG&E."

Bill Robins III of the Santa Monica, California, law firm Robins Cloud is an attorney for the Santa Rosa couple and confirmed there's no specified dollar amount sought in damages "because it's too early to tell."

The attorney told CNBC in an interview that his firm "is reviewing a pretty large number of claims and are in the process of preparing additional complaints."

Utility responds

PG&E responded in a statement: "As the fires continue to burn, we're focused on supporting firefighting efforts to contain the fires and protect life and property. Once it is safe to do so, restoring power and gas service safely and as quickly as possible will be our priority. We aren't going to speculate about any of the causes of the fires and will cooperate with the reviews by any relevant regulator or agency."

Shares of PG&E closed down 1.7 percent Wednesday. The stock has fallen more than 17 percent since Oct. 9.

PG&E has about $800 million in liability insurance for potential losses in connection with the wildfires, according to its Friday regulatory filing.

"If the amount of insurance is insufficient to cover the utility's liability or if insurance is otherwise unavailable, PG&E Corp's and the utility's financial condition or results of operations could be materially affected," the company's filing stated.

Economic blow

RMS, a risk modeling firm, has put economic losses for the Northern California fires at between $3 billion and $6 billion but it could rise. Some of the damage is from lost businesses, including hotels, stores and wineries.

In Napa Valley, at least 47 wineries suffered direct damage but "just a handful experienced significant property loss," the Napa Valley Vintners trade association announced Wednesday. It said the 2017 vintage is still "expected to be excellent" in the region.

The trade organization said winemakers with grapes picked after the fires started are having the fruit "laboratory-tested for the possible effects of smoke. Everything possible will be done to ensure only the highest quality 2017 wines go to market."

As of Wednesday, some 95 percent of the wine grapes were harvested in Napa Valley, according to Cate Conniff, a spokesperson for the wine industry group.

Even so, the Napa Valley association still expects "lower than average" volumes from the 2017 vintage.

New crisis

Meantime, the rebuilding process also could be complicated due to insurance claims issues as well as regulations and a shortage of contractors. There's also a worry the loss of so many homes could worsen the state's housing supply crunch and the affordability crisis in Northern California.

"They just saw their housing stock drop by 3 percent because of this disaster," said Christopher Thornberg of Beacon Economics in Los Angeles. "This is a huge issue. California's biggest problem now is a lack of housing."

Thornberg said there's a question still about where all the people who lost homes will live. Housing prices in many areas of Northern California are already considered high and destroyed and damaged homes could exacerbate the problem.

Many also could be without jobs as businesses were lost and workers tied to the local wine and tourism industry might take a hit too. That said, federal disaster unemployment assistance benefits are now available to people affected by the wildfires, and those who do not qualify can apply for state programs.

"Obviously they have to rebuild," Thornberg said. "That's all well and good but there's already a shortage of construction workers. The ability to ramp up reconstruction of homes will take a while."