It was the largest of the fires that burned that year through California’s wine country, which is north of San Francisco. State fire officials conducted a 15-month investigation to determine its origin. Cal Fire officials said the fire ignited from electrical equipment serving a private home in the picturesque hill town of Calistoga, about 10 miles northeast of Santa Rosa.
The cause of the wildfire was expected to be attributed to PG&E, whose equipment was blamed for starting more than a dozen other wine country fires. In anticipation, the company last year wrote off $2.5 billion from its 2017 earnings, a figure a PG&E official said at the time was “a low end to our possible liability.” Estimates placed the company’s potential liability for the Tubbs Fire at $8 billion.
Cal Fire’s conclusion removes that financial burden from PG&E, the state’s largest utility with 16 million customers in northern and central California. But the company still faces potentially devastating costs if it is found responsible for the Camp Fire, which killed 85 people and burned 14,000 homes in November, overtaking the Tubbs Fire as the state’s deadliest and most destructive.
No determination has been made regarding the cause of the Camp Fire. PG&E officials have told state regulators that the utility was having trouble with its lines close to where the fire began on the morning of Nov. 8; utility workers spotted smoke before flames swept through the town of Paradise.
If blamed for the blaze, the company’s liability for the Camp Fire easily would exceed $10 billion and could reach several times higher. Earlier this month, PG&E announced plans to file for bankruptcy protection, which in recent days has emerged as a likely two-year process that would need to balance the claims of Camp Fire victims, company shareholders and others.
In a statement issued after Cal Fire’s disclosure on Thursday, PG&E indicated it would not step away from its bankruptcy plans.
“PG&E still faces extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade,” the statement said. “Resolving the legal liabilities and financial challenges stemming from the 2017 and 2018 wildfires will be enormously complex and will require us to address multiple stakeholder interests, including thousands of wildfire victims and others who have already made claims and likely thousands of others we expect to make claims.”
The company’s stock jumped almost 75 percent in value Thursday after weeks of steady decline. But some shareholders seized on the Tubbs Fire determination to urge PG&E to cancel its bankruptcy plans because some of what the company estimated would be $30 billion in total wildfire liability has been removed.
In a statement, BlueMountain Capital Management, a hedge fund with a major stake in PG&E, said “the news from Cal Fire that PG&E did not cause the devastating 2017 Tubbs fire is yet another example of why the company shouldn’t be rushing to file for bankruptcy, which would be totally unnecessary and bad for all stakeholders.”