- [Narrator] This is the Camp Wildfire.
On November 8th, 2018, the fire tore across
a rural section of northern California.
It was deadliest and most destructive fire
in California history.
It consumed the town of Paradise in a matter of hours,
forcing its residents to flee in panic.
(woman sobbing)
- [Woman] Please, God!
- [Woman] Please, God, just let us out!
- [Woman] Let us get out safe!
- [Narrator] An investigation found that the Camp Fire
was caused by a line
owned by Pacific Gas and Electric, or PG&E.
It was the latest in a string of fires
that ultimately led the state's largest utility company
to file for bankruptcy, but with this bankruptcy,
it isn't just shareholders and creditors
who have an interest in the future of the company.
Millions of Californians rely on the utility
to keep the lights on, and some are questioning
whether PG&E can be trusted to do that safely and reliably.
That's because,
according to documents reviewed by the Wall Street Journal,
the company knew for years
its equipment had the potential to start fires,
yet repeatedly delayed the necessary upgrades
to make some of its lines safer.
This is the story of how PG&E filed for bankruptcy.
(copier humming) (pleasant orchestral music)
In 1905, newly-incorporated Pacific Gas and Electric
was competing with other utilities
to electrify northern California
with power generated high in the Sierra Nevada.
- A vision of a regional power system
was something that really hadn't been tried
in too many other places around the world.
The predecessors to PG&E built a series of dams
then built long, high-voltage transmission lines
across the Central Valley to San Francisco.
PG&E emerged really through consolidation
of a number of companies to serve more and more parts
of northern California with increasing demands for energy.
♪ I wash and dry your clothes, play your radios ♪
♪ I can heat your coffee pot ♪
Remember, just plug in, I'm Reddy!
- [Narrator] But safety and reliability issues
have plagued the utility since the '90s.
In 1996, PG&E settled a multi-million-dollar lawsuit
alleging it tainted drinking water
around Hinkley, California.
In 2001, the California energy crisis
resulted in rolling blackouts
and drove the corporation's utility arm
to file for bankruptcy, and in 2010,
a PG&E gas pipeline exploded in San Bruno, California,
killing eight people.
PG&E was placed on federal probation
as a result of the explosion
to ensure the utility operated safely
in the communities it served,
and many of those northern California communities
were growing in rural areas.
- A lot of the residential construction
that's occurred over the last several decades
has been in what we would call the Wildland-Urban Interface,
the fringe of the built environment,
putting people out into the forest.
Since that time, there hasn't been a lot
of new construction of the backbone system.
- [Narrator] Many of the utility's transmission towers
were constructed in the first half of the 20th century.
Outside of Paradise is a high-voltage transmission line
owned by PG&E.
The 56-mile line, known as the Caribou-Palermo,
was built in 1921.
Its towers and lines tap into a hydroelectric system
known as the Stairway of Power.
PG&E estimated the mean life expectancy
of its high-voltage transmission towers
was 65 years old, but the company estimated the average age
of all the towers still in service was 68.
The oldest towers in the system were 108 years old.
- Equipment like these high-voltage and low-voltage lines
does fail, but the failure is low-consequence,
so you'd have an older transmission line
that was nearing the end of its service life
and something would break during a big winter storm
in the Sierra, and when the storm ended,
PG&E crews could go out and fix the line.
What's changed is when the power lines fail in California
and the consequences of a failure.
- [Narrator] From 2013 to 2019,
a historic drought swept across California,
killing millions of trees
and greatly increasing the risk of fire.
According to a PG&E list
obtained by the Wall Street Journal,
the Caribou-Palermo was one of the grid's
worst performing circuits.
It also ran through areas that were identified
as posing elevated and extreme fire risks.
In 2017, PG&E equipment started 18 fires
that killed 22 people, according to state fire officials.
According to an internal presentation from that same year,
the company said it needed a plan
to replace its steel structure transmission towers
and better manage its equipment
to prevent it from causing fires.
(quietly tense synth music)
On the morning of November 8th, 2018,
winds picked up before sunrise near Paradise.
A hook connecting a power line
to a Caribou-Palermo tower failed,
causing the line to strike the tower
and emit sparks that fell to the ground.
A few minutes later,
a PG&E worker spotted a small fire near the tower.
That fire grew quickly.
- Oh, my God! (muffled chatter)
- [Narrator] By eight a.m.,
local officials had given the order to evacuate.
By 10:45, the fire had overtaken parts of Paradise.
- [Woman] Trying to get out of Paradise.
This is bad.
- [Man] Oh, my God!
- [Officer] Ladder 13, it's bad!
- [Man] Keep going!
(tense synth music)
(engine rumbling) (tense synth music)
- [Narrator] By six p.m.,
the fire had completely consumed the town.
(dramatic synth music)
In the aftermath, the local sheriff's office
said bodies were found in vehicles,
most likely of people who were trying to escape the fire.
Anthropologists and a forensic dentist were tasked
with identifying human remains
that sometimes consisted
only of a few bone fragments or teeth.
(dramatic synth music)
For PG&E, the destruction caused by the Camp Fire
was an existential threat.
The utility faced thousands of wildfire claims
seeking damages for, amongst other things,
wrongful death, personal injury, and property damage.
From October 2018 to January 2019,
PG&E's market value slid
from about $25 billion to nine billion.
By declaring bankruptcy, the utility's strategy
was to fold these claims into a bankruptcy proceeding,
allowing the company to negotiate settlements
with all of its creditors, including the fire victims.
A Wall Street Journal investigation
revealed the company knew that 57 of the steel towers
on the Caribou-Palermo line needed hardware replaced
and another 49 towers needed to be replace entirely
before the Camp Fire.
In 2013, PG&E told federal regulators
it had a $30 million plan to replace equipment
on the Caribou-Palermo line,
but it repeatedly delayed the project for five years.
It was slated to begin as late as June 2018,
but it didn't happen. (dramatic orchestral music)
The utility released a statement in response
to the Journal's reporting, saying the scheduled work
wasn't maintenance-related
and that the tower that malfunctioned before the Camp Fire
wasn't slated to be part of the project.
PG&E later acknowledged in federal court
it had long known that its high-voltage lines
could fail and trigger fires, but said that such fires
have historically been relatively rare.
- [Michael] I think the utilities in California
recognize that they are operating
in a different world today
and that, if they cause fires, they won't have a business.
- [Narrator] In December 2019,
state investigators found a dozen violations
the utility had committed
in maintaining its transmission lines and towers.
PG&E acknowledges it still has work to do.
Since the Camp Fire, it has inspected all its towers,
lines, and substations.
It identified 1200 immediate safety risks
and another 10,000 less urgent repairs and is making fixes.
It has also committed to sharing the results
of its inspections with state regulators and the public.
PG&E has also permanently retired the Caribou-Palermo line.
- Well, I think in the long run,
all of the utilities need to harden their grid.
In the short run, and maybe even the medium-term,
PG&E is also going to be turning off the power.
- [Narrator] Since 2018, PG&E has initiated
several weather-related power shut-offs
to prevent its equipment from starting more fires,
including one that cut power
to nearly 750,000 homes and businesses.
PG&E's future remains uncertain.
The utility has reached a $13.5 billion settlement
with fire victims but faces an major hurdle
in appeasing the state of California,
which has raised the specter of a public takeover
if PG&E doesn't enact certain reforms.
- If Pacific Gas and Electric is unable
to secure its own fate and future,
then the state will prepare itself as back-up
for a scenario where we do that job for them.
- People expect that their power is gonna be on all the time
and that the system will not cause them to be afraid,
but that's kind of where we live right now
in northern California, and until that changes,
I think there is gonna be push
for much greater oversight of a company.
I think that's a challenging environment
for a utility to operate in,
particularly one that's trying to get out of bankruptcy.
(dramatic orchestral music)