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PG&E Settles With Insurers Over Wildfires

Sep 13, 2019
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DAVID GREENE, HOST:

Turning now to a big story here in California - the utility giant PG&E will pay out $11 billion to insurance companies. This would settle 85% of the claims resulting from California's wildfires in 2017 and 2018. This is another step out of bankruptcy for PG&E, but it's certainly not the end of claims against the utility. And let's turn to KQED reporter Marisa Lagos, who has been covering this. Hi there, Marisa.

MARISA LAGOS, BYLINE: Hey. Good morning, David.

GREENE: So a lot of money - $11 billion. Can you just explain some of the background here for our listeners why PG&E is seen as liable for these - I mean, these terrible fires?

LAGOS: Yeah. So, I mean, as folks may remember, in both 2017 and 2018, we saw, really, the most devastating wildfires the state has ever endured, devastating communities first in the North Bay of the Bay Area and then out in Paradise and near Chico. And essentially, with the 2017 fires, PG&E was held liable by fire investigators for most of them. The Camp Fire from the beginning out in Chico, they've - or near Chico, they've basically admitted that they likely caused it, and they were found guilty - to be responsible for that, too.

And so these are claims that insurance companies, you know, who insured businesses and individuals in those areas had paid out. And then they were pursuing PG&E for what's called subrogation claims. They had originally pegged the number at $20 billion. This is less than that, obviously - 11 billion. But it is a major step for PG&E because, as you also may remember, they entered bankruptcy court in January. And part of the sort of pressure they're under now is to resolve all of these liability claims before - so that they can exit bankruptcy court by next June so that they can access this big, state-run insurance fund moving forward, essentially so they don't end up in this situation again. You know, nobody wants to see the state's biggest utility in bankruptcy.

And so these are kind of some of the major sticking points in terms of those past fires that they need to move towards. But I will note this does not include individual claims by fire victims who may have lost more than their insurance covered or may have lost family members and have actual wrongful death suits against the utility.

GREENE: Oh, wow. So this is far from the end of the road for the company in terms of liability. You can still, if you were victimized by this fire, sue them independently.

LAGOS: Absolutely, 'cause most people - I mean, a lot of people in Chico, for - or Paradise, for example, didn't even have insurance. Or people are underinsured. Or there are things beyond just the monetary value amount, like damages that you can pursue. So, I mean, I think that for PG&E, this is a big step because this kind of just takes out one of the major - you know, this checks one of the major boxes. It still leaves them with probably the most difficult group.

And one of the things around that question is going to be an actual trial this fall outside of bankruptcy court because the biggest fire in 2017, the one that really decimated the city of Santa Rosa up in wine country - state fire investigators actually said that a private property owner was responsible for sparking that. But a lot of victims and their attorneys still feel that PG&E is responsible because they didn't proactively turn off the power. And so this is going to be - you know, there'll be a trial to see if they're liable for billions more.

GREENE: All right. One step as the state continues to recover from some of these unimaginably terrible fires. That's KQED reporter Marisa Lagos. Thanks so much.

LAGOS: My pleasure, David. Transcript provided by NPR, Copyright NPR.