Cal Fire clears PG&E for deadly Tubbs Fire, but utility still faces uncertainty over other large blazes

Key Points
  • Cal Fire said Thursday its investigators concluded that "a private electrical system" was to blame for the Tubbs Fire in 2017 that killed 22 people in Northern California's Sonoma County, not PG&E.
  • The state agency previously pinned blame on PG&E for 17 other blazes in 2017, including two fires that resulted in a total of 13 fatalities.
  • Also, PG&E still faces uncertainty over last year's deadly Camp Fire that destroyed most of the town of Paradise and killed 86 people.
A search and rescue team searches for bodies in Santa Rosa, California on October 12, 2017 after the Tubbs Fire caused devastation.
Josh Edelson | AFP | Getty Images

LOS ANGELES — Cal Fire said a 15-month probe into the Tubbs Fire that killed 22 people in California's Sonoma County has concluded that "a private electrical system" was to blame, not PG&E.

The Tubbs Fire destroyed 5,636 structures in Northern California and was the deadliest of a series of wine country wildfires in October 2017. However, Pacific Gas & Electric still faces uncertainty and billions of dollars in potential liability over the Camp Fire in November 2018 that killed 86 people and destroyed nearly 14,000 homes in Butte County.

On Thursday's news, PG&E stock soared more than 74 percent in trading on the New York Stock Exchange.

Cal Fire previously found PG&E at fault for 17 other fires in 2017, including the Redwood Fire, which resulted in nine fatalities. The state agency also found PG&E responsible for the Cascade Fire that killed four in Yuba County in October 2017.

Here's a break down of the PG&E plan to file for bankruptcy
Here's a break down of the PG&E plan to file for bankruptcy

Earlier this month, the San Francisco-based utility disclosed that it plans to file for Chapter 11 bankruptcy on or about Jan. 29, saying it "faces extensive litigation and significant potential liabilities" in connection with Northern California wildfires in 2017 and 2018." The company estimated its liability for the wildfires "could exceed $30 billion," according to an SEC 8-K filing from Jan. 13.

Gov. Gavin Newsom said his office estimates that $17 billion of that $30 billion figure is from the Tubbs Fire in the wine country. The new governor said the figure raises questions about whether PG&E would file for bankruptcy.

"They [PG&E] will make that determination," Newsom said. "The state of California cannot make that determination for them. They have the right to make that determination, and we will respond accordingly."

The governor said his goal is to make sure victims are made whole, that the state has "safe, reliable and affordable service," and that ratepayers "are not paying the price of the neglect" by PG&E established in past wildfires.

Utilities in California face liability under what's known as inverse condemnation as well as for negligence claims for wildfire and other damaging incidents caused by such things as power lines or other utility equipment. There are state regulations requiring strict vegetation management practices by utilities, and they include standards for keeping vegetation clear of power lines.

The Camp Fire — the deadliest wildfire in state history — remains under investigation, although PG&E has previously acknowledged it had electrical equipment problems the day the Northern California fire started. The fire destroyed most of the town of Paradise and led to a flood of lawsuits against the utility.

"Cal Fire has completed its investigation of the 2017 Tubbs Fire and concluded that PG&E facilities did not cause the fire," PG&E said in a statement Thursday. "Regardless of today's announcement, PG&E still faces extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade."

The utility added, "Resolving the legal liabilities and financial challenges stemming from the 2017 and 2018 wildfires will be enormously complex and will require us to address multiple stakeholder interests, including thousands of wildfire victims and others who have already made claims and likely thousands of others we expect to make claims."

The Tubbs Fire burned a total of 36,807 acres and caused destruction to entire neighborhoods in the city of Santa Rosa. The city and hundreds of residents have sued PG&E in connection with the disaster.

In all, the October 2017 fires in Northern California involved more than 170 blazes and charred at least 245,000 acres. Nearly 11,000 firefighters were involved in battling the blazes, and help came from more than a dozen other states as well as Australia.

PG&E using bankruptcy to get out of liability, says Erin Brockovich
PG&E using bankruptcy to get out of liability, says Erin Brockovich

Back in June 2018, Cal Fire said its investigators determined a dozen wildfires in the wine country in October 2017 were caused by equipment operated by PG&E, including electric power and distribution lines, conductors and the failure of power poles. A month earlier, the state agency said four Northern California fires from the 2017 fire siege were caused by trees coming into contact with PG&E power lines.

Also, Cal Fire disclosed last October that PG&E power lines caused Northern California's Cascade Fire, which burned nearly 10,000 acres and destroyed 264 structures. Besides four civilian fatalities, the fire resulted in one firefighter injury.

"The exoneration of Tubbs is not a major input to our liquidity analysis, but it does significantly reduce the risk of the 'extraordinary' financial events that we considered," Guggenheim analyst Shahriar Pourreza wrote in a research note Thursday.

The Guggenheim note also said PG&E "should remain solvent despite the reiterated intent to file bankruptcy on Jan. 29. With our estimates of total wildfire liabilities of $17 billion, we do not view bankruptcy as warranted at this time."

- The Associated Press contributed to this story.