California’s most devastating wildfire started in 2018 when a transmission line broke from a nearly-100-year-old Pacific Gas & Electric tower, killing scores and destroying the town of Paradise. On Tuesday, the company is expected to plead guilty to 84 counts of involuntary manslaughter in a rare acknowledgment of corporate wrongdoing.
PG&E, which had repeatedly failed to maintain the line even though it cut through a forested and mountainous area known to experience strong winds, will also plead guilty to one count of illegally setting a fire. Officials ruled that one of the 85 deaths in the blaze known as Camp Fire was a suicide.
The plea will be entered by the company’s chief executive, Bill Johnson, in a state court in Chico, Calif.
It is unusual for corporations to plead guilty to felonies and acknowledge that their negligence caused the deaths of dozens of people. What is perhaps even stranger is that this will not be the first time PG&E will have been found guilty of serious crimes.
In 2016, a federal jury convicted the company of safety violations and obstruction of an investigation into a gas pipeline explosion that killed eight people in 2010 in San Bruno, a town south of San Francisco. PG&E is still under probation for those convictions.
As part of the plea agreement with the Butte County district attorney, PG&E has agreed to pay the maximum penalty of $3.5 million along with $500,000 to cover the cost of the county’s investigation. A state judge has to approve that agreement.
The judge overseeing the case, Michael R. Deems, has set aside time for people who lost loved ones in the fire to make statements at the hearing, which could last for several days. Some survivors have criticized the plea agreement as a slap on the wrist for PG&E. They said local and state officials have repeatedly failed to hold the company, which serves about 16 million people in Northern and Central California, accountable for its failings because PG&E wields enormous economic and political clout in the state.
The California Public Utilities Commission separately fined PG&E almost $2 billion for its negligence in causing the wildfire. And the company could face additional penalties for violating the probation it was placed on after its six convictions for the San Bruno explosion. No company employees or executives are expected to face prison time.
The outcome of the Camp Fire case could also influence a federal judge overseeing PG&E’s probation arising from the gas explosion case. That judge, William H. Alsup, has the power to impose new penalties on the company for violating its probation.
PG&E filed for bankruptcy protection in January last year after the utility’s equipment was implicated in several fires in 2017 and 2018. The company estimated its wildfire liability at $30 billion, much of it for the Camp Fire. The bankruptcy is PG&E’s second in about two decades.
The U.S. Bankruptcy Court is expected to approve PG&E’s plan to exit bankruptcy as soon as this week. Under its plan, the company will pay $13.5 billion to people who lost homes and businesses from wildfires started by its equipment, including the Camp Fire. About half of the compensation will be in the form of company stock, leaving roughly 70,000 fire victims owning a little more than 22 percent of PG&E once it leaves bankruptcy. The company also plans to pay off its bond debt in full and its existing shareholders will continue to own a big chunk of PG&E, an unusual outcome in Chapter 11 bankruptcy cases like this one.
PG&E has pledged to improve its practices and reduce the risk of fires by, among other things, trimming and cutting trees along its power lines. Last year, the company also started turning off large parts of its electrical system during windy and hot days to prevent fires. But many Californians and elected leaders criticized the company for bungling its handling of the shut offs and leaving millions of people without electricity for days on end.
Last year, state lawmakers moved to make it less likely that PG&E or another California utility would have to seek bankruptcy for wildfire damages. Gov. Gavin Newsom signed a bill last year to create a $20 billion fund that will help cover the costs of future fires.
To qualify to participate in the fund, PG&E must compensate victims of previous fires, improve safety, replace its chief executive and appoint a new board. Mr. Newsom also got the company to agree that the state could take the utility over if it did not fulfill its obligations under the bankruptcy plan.
PG&E has complied with many of the governor’s requirements, but it is not clear how far it has gone in reducing the risk that its equipment will set another fire. California’s wildfire season, which started this month, is expected to be longer and more intense this year, state officials have said.