At its May 7th meeting, the California Public Utilities Commission (CPUC) imposed substantial penalties on PG&E for its role in fifteen wildfires that occurred in 2017 and 2018.
The CPUC noted that the penalties included in a proposed $1.675 billion settlement agreement with PG&E were too low relative to the harm. As such, the CPUC increased the financial obligations imposed on PG&E. The penalties bar PG&E from seeking ratepayer recovery for nearly $1.8 billion related to transmission and distribution safety inspections and repairs and costs related to wildfires. Shareholders will also be required to pay $114 million to fund nearly two dozen system enhancement initiatives that include vegetation management, system wide analyses, community engagement initiatives, and work to increase transparency and accountability.
Additionally, the CPUC directed that any tax savings for shareholder obligations arising from the modified settlement agreement (estimated to be $468 million in federal and state taxes) shall be returned for the benefit of ratepayers once PG&E realizes those savings.
Together these, penalties are anticipated save residents about 3% on their electric bills starting next year.
Citing the unique bankruptcy situation, currently utility indebtedness to wildfire claimants, and upheaval in the financial markets, the CPUC declined to impose an $200 million fine on PG&E, which would have been payable to the General Fund and which PG&E sought to pay out of the Fire Victims Trust.