PG&E, Contractors to Pay $50.5 Million to Settle Forest Fire Suits

PG&E, Contractors to Pay $50.5 Million to Settle Forest Fire Suits

06 June 2013

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USA — California utility PG&E Corp. ( PCG ) and its contractors have agreed to pay a total of $50.5 million to settle accusations that they were responsible for fires that burned 18,000 acres of national forest in California, the U.S. Justice Department said.

The government’s suits were related a 2004 fire in Eldorado National Forest caused by a lit cigarette traced to the crew working around a PG&E distribution line and a 2008 fire in Mendocino National Forest land tied to a transmission line that ignited branches of a nearby pine tree.

A PG&E spokeswoman, Jana Morris, told Dow Jones Newswires that PG&E paid $1.5 million to settle the case linked to the 2008 fire, known as the Whiskey Fire, and has since evaluated its policies and procedures to ensure that it is reducing the risk of fire.

The other companies weren’t immediately available for comment, but have denied liability for the fires.

In the 2004 fire, members of a crew under VCS Sub Inc., doing business as Provco, were smoking in a heavily wooded area where they were hired to trim trees and brush around a PG&E distribution line, the Justice Department said.

The so-called Power Fire destroyed old growth and timberland across 13,000 acres of land, and took 17 days and $8.46 million to fight, the government said. The defendants agreed to settle the case for $45 million. Ms. Morris said that PG&E didn’t pay anything in that case.

In the Whiskey Fire, branches of gray pine tree less than two feet away from a transmission line ignited and dropped to the ground. The fire lasted eight days and burned 5,025 acres of forest lands, costing $5 million to put out.

The U.S. sought compensation from the company and contractors ACRT Inc. and Davey Tree Surgery Company for failing to trim or remove the risky tree. PG&E, ACRT and Davey Tree agreed to pay a total of $5.5 million to settle the dispute.

The fires “could have easily been avoided,” said U.S. Attorney Benjamin Wagner.

PG&E operates Pacific Gas and Electric Co., a public utility in central and northern California.

PG&E shares were off 44 cents after hours at $44.58. The stock is up 12% since the start of the year.

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