By Hudson Sangree

Southern California Edison came under increasing scrutiny Wednesday for its possible role in starting the Saddleridge Fire near Los Angeles, while Pacific Gas and Electric defended its public safety power shutoffs (PSPS) that affected more than 2 million residents last week as an effective means of preventing wildfires in its territory.

PG&E cited about 100 incidents in which high winds had toppled trees and branches onto de-energized power lines, which it said could have started a fire had they been active.

“While we understand and recognize the major disruption this PSPS event imposed on our customers and the general public, these findings suggest that we made the right call, and importantly no catastrophic wildfires were started,” Michael Lewis, PG&E’s senior vice president of electric operations, said in a statement.

The utility came under heavy fire from Gov. Gavin Newsom and the California Public Utilities Commission, among others, for its largescale power shutoffs. (See related story, CPUC Orders Changes to PG&E Shutoff Rules.)

PG&E is in Chapter 11 reorganization following devastating wildfires sparked by its equipment in 2017 and 2018. It told the U.S. Securities and Exchange Commission on Friday it had lined up more than $34 billion in financing commitments to help it emerge from bankruptcy.

SCE Blamed for Fires

SCE also shut down power during high winds last week, but on a smaller scale: It cut service to roughly 24,000 customers.

An SCE transmission line near Saddle Ridge Road, on the outskirts of suburban Los Angeles, may have been active when the wildfire apparently started beneath it Thursday night, according to SCE and fire investigators.

“The cause of the Saddleridge Fire remains under active investigation,” the Los Angeles Fire Department said on its website. “The area of origin has been identified by LAFD Arson Investigators as a 50-by-70-foot area beneath a high-voltage transmission tower.”

SCE filed an incident report with the CPUC on Friday “out of an abundance of caution,” saying its 220-kV Gould-Sylmar line had been “impacted” around the time the fire began.

“The Saddleridge Fire was reported in the Sylmar (in the vicinity of Yarnell Street/210 Freeway) area on Thursday, Oct. 10, 2019, at approximately 9 p.m.,” the report said. “Preliminary information reflects SCE facilities were impacted close-in-time to the reported time of the fire. SCE is monitoring the event and the investigation continues.”

Residents told several Los Angeles area news outlets that they’d seen flames beneath transmission lines about the time the fire started. The fire has so far caused one fatality and damaged or destroyed 100 structures.

SCE said Wednesday that it was considering shutting power on Thursday to about 32,500 customers in Inyo, Mono, Kern, Los Angeles, Riverside and San Bernardino counties in the face of increasing winds, the LA Times reported.

“We provide as much advance notice as we can ahead of when we think the weather might come,” company spokesperson Robert Villegas said. “It’s a situation that might develop, but it might not, so we ask for customers’ patience.”

SCE has also been blamed for major wildfires in 2017 and 2018.

State fire investigators determined the utility’s power lines sparked the Thomas Fire, a 280,000-acre blaze in Santa Barbara and Ventura counties that killed two people and later caused a mudflow that killed 21. (See Edison Takes Partial Blame for Wildfire in Earnings Call.)

The California Department of Forestry and Fire Protection (Cal Fire) is continuing to investigate the cause of the Woolsey Fire, which killed three, burned 1,643 structures and scorched nearly 97,000 acres in Ventura County in November 2018. SCE equipment is a suspected cause.

PG&E Lines up $34 Billion in Financing

PG&E’s equipment was blamed for starting the Camp Fire in November 2018 that killed 86 people and destroyed much of the town of Paradise, including more than 14,000 homes there. It was by far the deadliest and most destructive in state history.

Cal Fire investigators also found PG&E equipment had started 21 of the 22 major wildfires in the northern San Francisco Bay Area in October 2017, including in the famed wine country of Napa and Sonoma counties.

An estimated $30 billion in liability for those fires drove PG&E to seek bankruptcy protection in January. In recent weeks, the company has been fighting a competing reorganization effort by its bondholders that amounts to a hostile takeover.

The bondholders, led by two large hedge funds, have offered to invest more than $29 billion in PG&E Corp. and its utility subsidiary in exchange for a controlling stake in the companies. Their plan would pay off billions of dollars in wildfire debts to homeowners, local governments and insurance companies, including $13.5 billion for individual fire victims.

U.S. Bankruptcy Court Judge Dennis Montali ruled Oct. 9 he would admit the bondholders’ plan into the bankruptcy proceedings, primarily because it had won the backing of thousands of fire victims through the Official Committee of Tort Claimants. (See Judge Admits Takeover Plan as PG&E Starts Blackouts.)

The bondholders’ main argument was that it had the financial resources ready to pay for its plan, while PG&E lacked similar funding and had only offered the tort claimants a trust capped at $8.4 billion.

PG&E filed a form with the SEC on Friday saying it had received $34.35 billion in commitment letters from J.P. Morgan Chase Bank, Bank of America and others to pay for its own reorganization plan.

“PG&E is confident that its plan charts the best course for its emergence as a financially sound utility positioned to serve its customers and contribute to California’s clean energy future,” the company said in a statement released Thursday.

The release outlined PG&E’s objectives for its reorganization plan, including assuming all PPAs and community choice aggregator servicing agreements; fulfilling pension obligations and other employee agreements; and providing for the utility’s future participation in the state wildfire fund established under Assembly Bill 1054.

PG&E also reiterated its $8.4 billion cap in damages to wildfire victims and said it still intends to pay out $11 billion in subrogation claims to insurance companies.

Both reorganization plans are scheduled to be considered by the bankruptcy court Oct. 23.

PG&E’s stock, which had traded at nearly $70/share in mid-2017, had sunk to a near-record low of $7.88 on Wednesday.