Pacific Gas and Electric Co. (PG&E), which is expected to soon file for voluntary bankruptcy protection, on Thursday was absolved of blame in the 2017 Tubbs wildfire in Northern California. However, the natural gas utility said it still faces “extensive litigation, significant potential liabilities and a deteriorating financial situation” related to other wildfire investigations.

The California Department of Forestry and Fire Protection (CalFire) concluded that Pacific Gas & Electric Corp. subsidiary facilities had not caused the fire. The Sonoma County fire “was caused by a private electrical system adjacent to a residential structure,” officials said. Investigators “did not identify any violations of state law...related to the cause of this fire.”

The fire, up until the Camp Fire last year, was considered the most destructive in California history. The Tubbs fire burned a total of 36,807 acres, destroying 5,636 structures and resulting in 22 civilian fatalities and one firefighter injury, CalFire noted. In total, the “fire siege involved more than 170 fires and burned at least 245,000 acres in Northern California. Approximately 11,000 firefighters from 17 states and Australia helped battle the blazes.”

Daily Markets Coverage, Analysis, & Price Data at 170+ Locations Since 1993

A federal district judge supervising PG&E’s five-year probation for  earlier criminal convictions concluded this month that the utility’s faulty equipment was tied to almost all of the Northern California wildfires in the past two years, including the Camp Fire.

“Without question, the loss of life, homes and businesses during these devastating wildfires is heartbreaking, and we remain focused on helping affected communities recover and rebuild,” PG&E management said. “The safety of our customers and the communities we serve is our most important responsibility, and we are committed to assessing our infrastructure to further enhance safety and help protect all of the customers we serve from the ever-increasing threat of wildfires.

“The devastating and unprecedented wildfires of 2017 and 2018 have had a profound impact on our customers, employees and communities.” Even with the lack of culpability in the Tubbs fire, “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,” management said.

“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 utility said “multiple factors” contribute to wildfire risks across the service territory, including “vast tree mortality following a historic five-year drought. Fire season is now extended due to prolonged periods of high temperatures, extreme dryness, tinder-dry grass and record-high winds increasing the number of wildfires and making them more dangerous.”

More than half of the utility’s service area “is now considered to be in extreme or high fire-risk areas,” as designated by the California Public Utility Commission’s Fire-Threat Map, it said.

Meanwhile, Florida-based NextEra Energy Inc. has filed a complaint at FERC to prevent PG&E from abandoning any of its wholesale purchase power contracts for wind and solar power supplies as part of the planned Chapter 11 bankruptcy filing.

NextEra expressed concerns that the utility could seek a restraining order or injunction to protect its ability to ask the bankruptcy court to decide whether to keep the contracts. At issue is whether FERC has the authority or would intervene in the bankruptcy. PG&E in a filing to FERC Wednesday strongly argued against involvement by the Commission.

Since PG&E announced it would file for protection, concerns have been raised by California and environmental officials that the state’s aggressive climate change mitigation push could be thrown off course.

PG&E recognizes its “important role in supporting the state's commitment to clean energy initiatives," said spokesperson James Noonan. The Chapter 11 process would allow the utility access to financial resources and “enable the company to work constructively and collaboratively with policymakers, regulators and relevant stakeholders."

Also on Thursday, New York City-based hedge fund BlueMountain Capital Management launched a campaign to oust the board. BlueMountain, which said it manages funds that own more than 11 million shares of common stock, issued an open letter to shareholders indicating it would announce a full slate of directors by Feb. 21, which is three months before the annual meeting.

“The current board has not only failed the company and its shareholders; it has failed its customers; it has failed its employees; and, it has failed the people of California,” the BlueMountain letter said, according to a filing with the Securities and Exchange Commission. “The company has lost the public’s trust, and it has severely damaged its relationship with regulators and elected officials.”

The hedge fund cited PG&E’s involvement in not only the wildfires but also the 2010 San Bruno, CA, gas pipeline explosion, as well as its past involvement in falsifying gas pipeline safety records.

“The current board is accountable for these failures,” BlueMountain stated. “It is well past time for a change.”