California regulators approved a $45 million penalty against Pacific Gas and Electric on Jan. 25 for the utility’s role in the 2021 Dixie Fire, the second-largest wildfire in state history.

The California Public Utilities Commission voted 3-2 to approve the penalty as part of a settlement negotiated between PG&E and the commission’s Safety and Enforcement Division (SED).

The penalty includes a $2.5 million fine that will be paid to the state’s general fund. PG&E will pay another $2.5 million to tribes whose land was impacted by the fire.

In addition, the utility agreed to spend $40 million to transition to electronic recordkeeping for inspections of overhead and underground distribution equipment. PG&E has agreed to not seek recovery of the $40 million through customer rates.

As part of the settlement, PG&E denied any fault in connection with the Dixie Fire, which was sparked by a tree falling on one of the utility’s distribution lines in the Sierra Nevada foothills.

5-county Blaze

The Dixie Fire started July 13, 2021, when a Douglas fir tree fell onto PG&E distribution lines, a Cal Fire investigation determined. The fire spread across 963,309 acres in five Northern California counties and destroyed about 1,300 structures.

The proposed settlement went to the commission for a vote Nov. 30. But two commissioners — Darcie Houck and Genevieve Shiroma — said they needed more information, and the vote was postponed.

Following the Nov. 30 meeting, SED provided written responses to the commissioners’ questions.

But during the Jan. 25 meeting, Houck and Shiroma said they weren’t satisfied with the answers. They voted against approving the settlement agreement.

Houck questioned whether the relief provided by the settlement was enough given the magnitude of the fire.

“In light of the enormous impact this fire had on the state of California and the five counties impacted, the relief that is being proposed here, based on the information and reports we have today, I still believe is inadequate,” Houck said.

Houck also said she was worried about the impact of the agreement in a future cost-recovery proceeding. Under terms of the agreement, PG&E retains the right to pursue recovery of costs associated with the Dixie Fire.

“There’s still a concern about how the information and the fact that the settlement was there with no admission of fault would be looked at when we’re looking at things like cost recovery,” she said.

Role of Recordkeeping

Several of Houck’s questions during the Nov. 30 meeting were related to the $40 million for electronic inspection records. She asked for more specifics on what information would be digitized and how that would improve safety.

In its written response, SED said digitization “is important for speed and efficiency at the commission and across other agencies responsible for wildfire safety.”

“The continued and accelerated improvement of inspection processes by PG&E pursuant to the [agreement] will support public safety and facilitate commission oversight,” SED wrote.

Commissioner John Reynolds, who voted in favor of the $45 million settlement, emphasized the importance of digitizing records during the Jan. 25 meeting.

“Modernizing records related to the condition of PG&E’s assets may not sound exciting to the public,” he said. “But better information about the condition of electrical assets is vital to improving inspection and preventive maintenance procedures, which are bread-and-butter wildfire safety activities.”

Commissioners also noted that PG&E has taken steps to reduce wildfire risk since the Dixie Fire.

CPUC President Alice Busching Reynolds said the utility now has a system that shuts down distribution lines when it detects a fault, such as one caused by a tree falling on the line.

In a release issued after the vote, the CPUC said it has “taken many actions to hold PG&E accountable for safely serving its customers.”

Those include a $150 million penalty for the 2020 Zogg Fire, a $1 million penalty for the 2019 Easy Fire and a $125 million penalty for the 2019 Kincade Fire.