The Calaveras County Board of Supervisors has accepted a $25.4 million settlement with Pacific Gas and Electric Co. to compensate for damages inflicted by the 2015 Butte Fire.
The county previously sought more than $167 million from the utility giant.
“This has certainly been a long process where all sides were engaged in the mediation,” Calaveras County Chief Administrative Officer Timothy Lutz told the Enterprise following the Nov. 13 closed session during which the settlement was reached. “It’s never a great thing when any parties have to engage in any type of litigation, but certainly the end result will help to recover funds that the county put out or incurred from the losses.”
Brandi Merlo with PG&E Marketing and Communications stated on Nov. 13, “Nothing is more important to us than the safety and well-being of our customers and the communities we serve. Our thoughts are with everyone impacted by the Butte Fire. PG&E and Calaveras County have agreed to resolve the county’s Butte Fire claim. The settlement will resolve all claims between the county and PG&E for the Butte Fire. Please reach out to Calaveras County for additional details.”
Merlo did not respond to further questions regarding other lawsuits the company has faced relating to the Butte Fire.
In April 2016, the California Department of Forestry and Fire Protection (Cal Fire) determined that the Butte Fire ignited when a tree fell onto a PG&E power line on Butte Mountain Road in Amador County.
As previously reported, more than 2,000 cases have since been filed by Butte Fire victims against the utility company – over half of which reached settlement by June of 2018, amounting to over $700 million in payouts. Cal Fire has also sought $87 million in compensation relating to the September 2015 fire.
According to Lutz, county roadways, watersheds and infrastructure suffered significant damage during the fire, though it is difficult to assign a “dollar amount” due to pre-existing repair needs.
However, PG&E U.S. Security and Exchange Commission (SEC) filings show that the county sought a much higher figure in addition to punitive damages as of March 2018 after pursuing an initial amount of $85 million in February 2018.
“. … the County served a mediation demand seeking in excess of $167 million,” reads the PG&E SEC filing for the first quarter of 2018. “This claim includes costs that the County of Calaveras allegedly incurred or expects to incur for infrastructure damage, erosion control, and other costs related to the Butte fire.”
Regarding the damages and the future allocation of funds, Lutz said, “A number of roads do need to be replaced. Period. When you’re talking about the cost, is this enough to rebuild? Definitely not. … The roads were declining in a number of areas before the fire. PG&E is not paying for betterment, but paying for the portion of road damaged during the Butte Fire.”
Lutz added that the county also suffered losses in property taxes and economic activity.
Although state and federal funds have covered much of those damages, “(the settlement) helps with pieces that were unreimbursed and pieces that were declined for reimbursement to due to insufficient documentation,” Lutz said.
The $25.4 million proposal was made by JAMS, a mediation service that was contracted to assess both sides of the litigation and recommend an amount that would “hold up at trial,” Lutz said.
After a series of mediation sessions with PG&E representatives and the county-hired Baron and Budd Law Firm, the Board of Supervisors accepted the proposed amount and directed County Counsel to finalize the settlement agreement, according to Lutz.
The reparation funds are expected to be transferred in mid-December, Lutz said. After the subtraction of attorneys' fees, roughly $20.2 million will be placed in a designated fund outside of the county’s general fund. The future use of those funds will be unrestricted, subject to board policy.
11/13/18: This article was updated to include a comment from Brandi Merlo.
11/14/18: This article was updated to include findings from PG&E SEC filings.
11/14/18: This article was updated to include additional information from Timothy Lutz.