As their fourth anniversary nears this month, the October 2007 wildfires keep burning San Diego Gas & Electric and its customers.
State investigators blamed the utility for two of the three fires. Even though it says it’s not at fault, SDG&E has settled dozens of claims for more than $1.1 billion. The company has acknowledged that it thinks customers should get the bill for any costs beyond that amount.
Hundreds of other lawsuits by homeowners, the city of San Diego and others are still tied up in the courts, potentially costing SDG&E (and its customers) millions more.
Here’s a quick guide to the wildfire-related woes facing the power company.
What was SDG&E’s role in the fires?
The state’s Public Utilities Commission blamed SDG&E for two of the three major fires, saying it hadn’t properly maintained power lines.
As we wrote in a rundown of the utility’s fire problems:
Power lines are dangerous. That obvious fact means that San Diego Gas & Electric, which operates and maintains more than 8,000 miles of above-ground power lines in its service area, has a duty to care for those lines. The company must follow 565 pages of state regulations, which govern everything from tree trimming to how close wires can be strung together.
The Witch fire began when power lines near Santa Ysabel slapped into each other during the high winds of an autumn Santa Ana, the report says. It blames SDG&E, saying it didn’t maintain a proper separation between the wires as required by regulations.
Investigators blamed Cox Communications for the Guejito fire, saying it began when a broken Cox wire hit a SDG&E power line near the Wild Animal Park. The fire merged with the Witch fire, creating a mammoth 197,000-acre blaze that killed two and destroyed more than 1,100 homes.
Another fire, the Rice fire, began when a sycamore tree limb fell onto a power line near Fallbrook, the agency said. That fire burned 9,400 acres and damaged 206 homes; the state agency said SDG&E is responsible because it failed to trim back the tree.
SDG&E has declared that the wildfires were ” an unavoidable accident” and said the state agency’s report “is full of speculation and faulty conclusions.”
For its part, Cox Communications has denied responsibility for the Guejito fire.
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Investigators also chided SDG&E for a lack of cooperation with the investigation.
Who’s getting the $1.1 billion-plus?
SDG&E announced in 2009 that its insurance company would pay $686 million to 65 homeowner insurance companies in connection to damage from all three fires, the Union-Tribune reported. Another 20 insurance companies were still in negotiations with SDG&E at that time.
The company has also paid out funds to the state fire agency and about 1,500 people. But another 700 cases are unresolved. SDG&E says it doesn’t know how much money it will ultimately shell out, the U-T reported.
Who’s been suing?
A long list of people think SDG&E should pay for a variety of damages because it failed to maintain its lines properly.
The U-T reported in 2009 that there were three types of plaintiffs going after SDG&E: “insurance companies looking to recoup some of their losses; plaintiffs seeking compensation for uninsured and underinsured structures; and government agencies looking for compensation for firefighting costs and damage to public property.”
James Frantz, an attorney whose firm represents plaintiffs in about 300 wildfire-related cases, said his firm’s clients include businesses and renters who don’t have homeowners insurance to cover their damages. People are suing for damage to homes, avocado groves, landscaping, swimming pools, boats, cars and personal property, he said.
Brian Heffernan, another attorney who’s working on wildfire cases, said he has filed lawsuits on behalf of racehorse breeders and owners of citrus groves and exotic flower farms.
In addition, people affected by the wildfires have sued for damages related to the inconvenience and emotional distress of evacuation, Frantz said, and some have received settlements for those damages.
What will the fires mean for SDG&E customers?
You’re paying for them now, and you’ll keep paying for them — perhaps by quite a lot.
A hike in fire insurance costs from $4.5 million in 2008 to $47 million in 2009 was expected to boost typical bills by about 50 cents a month. Another new expense — for $25 million in damage to SDG&E property caused by the wildfires — was expected to hike rates by 38-75 cents a month at least through this year.
SDG&E has said that it will seek to raise its rates if damages go beyond $1.1 billion it’s insured for, according to the U-T. In a filing, the company says it thinks the rate hikes will get approved.
What’s next for SDG&E and fires?
After the fires, SDG&E announced that it wanted to shut off power to the backcountry during certain dangerous weather conditions, a move that spawned protests from county government, schools, water districts, cable companies and residents who use electricity-powered medical devices. They feared the problems that would be caused by outages.
The state utilities agency rejected the plan but SDG&E could still decide to turn off the lights when Santa Ana winds blow.
SDG&E is also spending more money to understand the weather. It’s hired a meteorologist, who tells the North County Times that the company’s weather monitoring system will be the third largest of its kind in the country. It’s expected to include 125 monitoring stations.
Please contact Randy Dotinga directly at randydotinga@gmail.com and follow him on Twitter: twitter.com/rdotinga.