Area burned in California wildfires in 2017 and 2018, compared with the 5-year average. The 2018 number counts acres burned through 5 August 2018. Data: California Department of Forestry and Fire Protection. Graphic: Bloomberg

By Mark Chediak
13 August 2018

(Bloomberg) – It was California’s biggest fire yet. In late July and August, wildfires devastated an area north of San Francisco far bigger than New York City, destroying more than 100 homes and injuring 2 fire fighters. It’s just one in a rash of fast-spreading blazes that have killed at least 56 people this year and last in the Golden State.

Authorities don’t yet know the cause of some of the fires, but the region’s giant utility, PG&E Corp., sees a culprit at work -- climate change. The blazes in recent years, it said, are the latest example of how global warming has produced unusually hot, dry conditions that spawn more frequent and intense fires. “Climate change is no longer coming, it’s here,” Geisha Williams, chief executive officer of PG&E, said in an email. “And we are living with it every day.”

Scientists tend to agree with that assessment. But California’s biggest utility has an especially compelling reason to link the fires to the environment. State investigators have tied PG&E equipment, such as trees hitting power lines, to some of the blazes in October that in total destroyed nearly 9,000 structures and killed 44 people. It faces damage liabilities totaling as much as $17 billion, and possible financial ruin -- its stock is down about 37 percent since the fires -- unless Williams can convince California lawmakers that the company’s problem is, in fact, a climate change problem.

Invoking the environment is a clever strategy in a state that’s taken on the green mantle in the face of a skeptical Trump administration. (Indeed, President Donald Trump offered his own reason for the fires last week, blaming a lack of water and bad environmental laws. It was roundly dismissed.) Williams’s battle cry -- don’t blame us, blame climate change -- is catching on. PG&E’s neighboring utilities, Edison International and Sempra Energy, are echoing the defense, and it may well serve as a blueprint for utilities worldwide as global warming produces extreme weather events such as hurricanes that have slammed Texas and Puerto Rico.

Williams is deploying the argument in a lobbying campaign she’s waging to shield PG&E from liability. California law holds that property owners can collect compensation from utilities linked to fires -- even if they weren’t negligent. She argues that because of the increasing frequency of fires, utilities shouldn’t be held responsible each time a tree branch falls on a power line during a storm if it followed all safety rules. Instead, the test should be whether the utility acted “reasonably” in trying to prevent fires, things like trimming trees and brush around lines, she contends. In that case, insurance or government agencies would pick up the damages.

“No one is suggesting the utilities should get a free pass if they were negligent,” Williams said. But the current legal policy of unlimited, strict-liability has the potential to financially cripple companies, she said. [more]

Facing $17 Billion in Fire Damages, a CEO Blames Climate Change



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