CPUC Approves Penalties against SCE and PG&E for Major Fires

State utility regulators voted 3 to 1 to confirm penalties against Pacific Gas & Electric and Southern California Edison for damages from fires started by their equipment, which were challenged by a ratepayer advocate. The California Public Utilities Commission vote was cast July 14 after narrowly reconsidering the factors it weights when deciding penalties against regulated utilities for violating CPUC rules.

Commissioner Darcie Houck, the lone dissenter, objected to the penalties being okayed again because the CPUC’s Safety and Enforcement Division and the two utilities initially decided behind closed doors what PG&E should pay for the damage caused by the Kincaid Fire and the amount of SCE’s penalty for fires it sparked.

Local government, victims who “suffered the most,” and the public “lose when matters are negotiated behind closed doors,” Houck said during the Commission’s Thursday business meeting. She said the CPUC needs to use mechanisms other agencies use, including taking public input, when deciding penalties for companies and others when they cause “severe and catastrophic” harm.

Commissioner Cliff Rechtschaffen disagreed, saying the penalties were set in accordance with the “overall public interest.”

The Utility Reform Network had mixed reactions. While it "would like to see more process related to the review of incidents of this magnitude and the development of the settlements, we were happy to see the clarification that the determinations related to penalties do not have any precedent when the Commission reviews costs of the related wildfires in the future," said TURN's Katy Morsony. She said that will allow ratepayer advocates to "have an opportunity to challenge costs of the wildfires as not reasonable for ratepayer recovery."

SCE was ordered to pay $550 million, with $110 million of that a penalty and $350 million in disallowed cost recovery, for sparking five large fires in 2017 and 2018, including the massive Woolsey Fire in SCE territory.

PG&E was hit with a $125 million penalty for starting the Kincaid Fires in 2019.

Houck specifically objected to the penalty against PG&E for failing to reveal the controversy between the safety division and utility over PG&E’s conduct during the investigation. But details of the clash were kept secret.

The Utility Reform Network challenged both penalties approved last year, but the CPUC only agreed to reconsider its penalty assessment methodology.

The penalty methodology, which was reweighed, considers five factors:

The severity of the offense; The utility’s conduct; The regulated entity’s financial health; Harm to the regulatory process; and The impact on the public interest.