California regulators late Thursday doubled down on the wildfires impacting each end of the state and the potential role by the two major utilities, Pacific Gas & Electric Co. (PG&E) and Southern California Edison (SCE).
California Public Utilities Commission (CPUC) President Michael Picker said the tragic events, which have killed dozens mostly in Northern California’s Camp Fire, must “be investigated by the appropriate authorities.” Picker said the CPUC must ensure that investor-owned utilities operate safe and reliable grids, and have the “financial wherewithal.” PG&E is facing potentially catastrophic financial issues because of the Camp Fire.
The CPUC is opening a rulemaking to implement parts of the new utility wildfire protection law, Senate Bill (SB) 901, as well as a new phase in an ongoing proceeding examining PG&E’s corporate governance, structure and operations.
Deaths related to the Camp Fire, which wiped out the tiny town of Paradise, were raised to 63 on Thursday, with as many as 631 people reportedly missing. At the fire scene Thursday night, the Camp Fire had consumed 141,000 acres and was 40% contained while destroying 9,700 residential and 290 commercial structures, while threatening another 15,500 structures.
In Southern California, the Woolsey Fire had covered 98,000 acres with 62% containment, destroying 548 structures and damaging another 157, while threatening 57,000 structures. The Hill Fire now underway is being fought in Southern California too.
SCE late Thursday described its restoration efforts related particularly to the Woolsey Fire. The California Department of Forestry and Fire Protection, aka Cal Fire, and the Ventura County Fire Department are investigating the causes of the Woolsey, as well as the Hill Fire, which already was 100% contained.
“The investigation of the Woolsey fire includes an area where SCE’s facilities are located and the possible role of its facilities,” it said. “The area is currently under Cal Fire’s control and SCE has had limited access to that area, primarily to support Cal Fire’s activities. SCE continues to cooperate with the investigations which may take a considerable amount of time to complete.
SCE’s Emergency Operations Center was continuing to deploy resources and crews “to assist first responders and has been restoring power in communities affected by the wildfires in Ventura and Los Angeles counties where fire officials say it is safe to do so,” the utility said.
As of late Thursday, the Woolsey and Hill fires had impacted 45,470 customers, and power had been restored to 39,094, or 86%. SCE also said it had replaced 249 of the 775 power poles and other electrical equipment that were destroyed or damaged in the Woolsey and Hill fires and crews had installed almost 19 miles of wire.
“With the increasingly serious, ever-growing wildfire threat to California, it is unmistakably clear that further work needs to be done to develop thoughtful, comprehensive policies to address this statewide problem,” SCE management said.
“SCE strongly supports the increased funding for fire suppression and improved forest and land use management policies included in SB 901” and “will continue to invest in hardening its infrastructure and implementing industry leading safety practices…”
SCE recently filed a Grid Safety and Resiliency Program at CPUC and laid out a wildfire mitigation plan that is required by SB 901.
“While the state legislature has taken an important initial step to mitigate wildfire risks through the passage of SB 901, much more work is needed to address the critical issues of fire prevention, suppression efforts and liability allocation,” SCE said.
“SCE believes the state can do more, including enacting fire-smart building codes, particularly in high fire risk areas, and ensuring the proper allocation of legal responsibility — including SCE’s where appropriate — for the often-tragic consequences of wildfires.”
The state’s new “Commission on Catastrophic Wildfire Cost and Recovery established under SB 901 provides an opportunity for a thoughtful, in-depth examination of how state policy allocates liability and compensates for fire damage,” SCE management said. “Without continued focus, the wildfire threat will only become more acute as our climate continues to change.”
Meanwhile, Moody’s Investors Service became the first credit ratings agency to lower its outlook for PG&E and its parent company with all the ratings on review for further downgrades, credit officer Jeff Cassella said.
“The downgrade reflects the material exposure to new potential liabilities associated with the Camp Fire and the uncertainties associated with how the fire-related liabilities will be recovered,” Cassella said. “The 2018 wildfires are not covered under the recently passed California legislation, an omission that will now have more serious credit implications for the company..”
Moody’s said it is “too early” to consider the possibility of a strategic bankruptcy for PG&E, however, the gap in coverage under SB 901 constitutes a “material credit negative.” CPUC has been “historically credit supportive,” but the updated rating takes into consideration “a more onerous legislative environment due to the continued exposure related to potential future wildfire costs.”
SCE and PG&E are supporting customers impacted, which include waiving charges associated with relocating and starting new service, as well as extended bill payments.
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