Costs of massive 2007 fire cannot be passed to customers

The costs of a massive fire from 2007 involving a utility company from San Diego cannot be passed onto the customers, according to a ruling from the California Public Utilities Commission. San Diego Gas & Electric was looking for approval to bill its customers the $379 million in costs from multiple deadly fires started by power lines back in 2007.

The commission’s ruling upheld a ruling reached by two judges back in August. The judges and the commission said that the utility company did not act reasonably when it came to managing and taking care of its equipment, and therefore, cannot pass the costs of the fire to its customers. The law in California allows utility companies to recover costs from incidents only if the utility company acts in a prudent way.

The fires in 2007, which were caused by power lines operated by San Diego Gas & Electric, damaged more than 1,300 homes. The fires also caused two fatalities and injured 40 firefighters. More than 2,500 lawsuits were filed against the utility company for fire damage. The company settled most of them for more than $2.4 billion.

The $379 million that the utility company asked to charge customers for was the amount left after court proceedings, insurance payouts and settlements came to a close. The commission ruled that the utility company had not acted prudently and did not meet its responsibility to maintain its equipment.

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Source: US News, “San Diego Utility Can’t Pass 2007 Fire Costs Onto Customers,” Nov. 30, 2017