PG&E jolted by wildfire lawsuit from dozens of insurance companies

San Jose Mercury News (CA)

April 16--Dozens of insurance companies have filed a lawsuit against PG&E in connection with the company's role in wildfires that scorched the North Bay wine country and nearby regions, litigation that intensifies the financial pressure on the embattled utility.

The litigation seeks monetary compensation for wrongful deaths, property damage and unspecified personal injuries suffered by insurance company customers in connection with the blazes.

"Certainly this is an additional cause for uncertainty hanging over PG&E," said Paul Patterson, an analyst with investment firm Glenrock Equities. "The impact of the wildfires ranks up there with uncertainties that PG&E has ever faced."

An estimated 172 fires were reported at the outset of the October blazes, which were among the most destructive in California history. The fires killed 44 people, destroyed 8,700 structures and burned 245,000 acres.

The insurance-related costs from the infernos are now estimated to be at least $9.4 billion.

"We are aware that lawsuits have been filed," said Ari Vanrenen, a PG&E spokeswoman. "There has been no determination on the causes of the fires."

Ken Pimlott, director of the state Department of Forestry and Fire Protection, told a state Senate panel in late January that investigators hoped they could begin to announce within several months the causes of at least one or more of the 18 major fires that erupted in October.

The insurance companies that filed the litigation are authorized under the policies they issue to use lawsuits to seek recovery of payouts they made to their customers.

"Plaintiffs may seek liability discovery concerning the origin and cause of each of the North Bay fires, such as vegetation management, electrical infrastructure and wildfire risk management," according to a legal proceeding that was referenced in the insurance companies' litigation.

San Francisco-based PG&E has told analysts that it has embarked on a wide-ranging effort to overturn California's application of a policy called inverse condemnation, under which a utility can be held liable if any of its equipment was a "substantial" cause of a fire, even if the company acted properly.

Steven Campora, one of a team of attorneys that are representing individuals suing PG&E in connection with the lethal infernos, argued that PG&E hasn't always had the best track record when it comes to customer safety.

"PG&E has a history of not doing things the way they were supposed to be done," he said.

Prior to the fires, PG&E became a convicted felon for crimes the utility committed before and after a fatal natural gas explosion that the utility caused in 2010. The deadly blast killed eight and destroyed a San Bruno neighborhood.

"Nothing is more important to us than the safety and well-being of our customers and communities we serve," Vanrenen said. "Our thoughts are with everyone impacted by these devastating wildfires. We're focused on doing everything we can to help these communities rebuild and recover."

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