An article published by Electric Light & Power raises some interesting questions around vegetation management and the responsibility and liability of utilities for resulting fires. This is especially true in light of the recent announcement by Pacific Gas and Electric that it would be filing for bankruptcy at the end of the January.
Investors yesterday offered PG&E a $4 billion alternative to bankruptcy filing. However, it has since been reported that PG&E has declined the offer and will proceed with the filing. Last week, PG&E was cleared of responsibility for the 2017 Tubbs Fire although it remains unclear whether PG&E will be found liable for November’s Camp Fire.
According to CNBC: “The California utility said in a court filing Wednesday [22nd January] that it can’t afford a federal judge’s order to inspect its energy grid and clear trees that could fall into its power lines, work it estimates would cost between $75 billion and $150 billion.
“PG&E would inevitably need to turn to California ratepayers for funding, resulting in a substantial increase — an estimated one-year increase of more than five times current rates in typical utility bills,” it said in the filing. The utility said further that obtaining additional financing to avoid a bankruptcy filing would be expensive, complicated and fail to address the company’s fundamental problems.
It is believed – although not confirmed – that PG&E will name turnaround specialist James Mesterharm as its chief restructuring officer to navigate the bankruptcy. It is believed the PG&Es debt exceeds $18 billion and that liability for the 2017 and 2018 fires could exceed $30 billion.
According to Teresa Hansen, content manager for Clarion Power & Energy, “Following the 2003 blackout, federal legislation was enacted to address vegetation management along transmission corridors. The North American Electric Reliability Corp. (NERC) was designated as the "Electric Reliability Organization" and assigned the responsibility of developing and enforcing standards to ensure bulk power system reliability. This included development of reliability standard FAC-003-2, which addresses vegetation management on rights of way (ROWs).
“FAC-003-2 requires that trees and other vegetation growing in or adjacent to a power line ROW be trimmed to prevent power outages caused by tree contact with a transmission line. Each utility can develop and implements its own vegetation management plan, but that plan must conform to FAC-003-2, as well as all state and local requirements and any applicable ROW or easement agreements with property owners.”
With utilities having to manage not only federal and local regulations but also deal with home and land owners who are opposed to the cutting back of vegetation and then the concept of inverse condemnation liability, do changes need to be made to regulations and liability expectations? In Australia and New Zealand, for instance, it is the responsibility of the landowner to ensure that trees on their property are cut back, and it is only the responsibility of the utility to manage all naturally occurring trees and vegetation on public land. Local councils are responsible for managing trees and vegetation they have planted or cultivated on public land in their local area.
Questions we are asking:
- How does vegetation management in your area/region work?
- Given the environmental and climate changes being seen in California (drought etc), should legislation change and if so, how?
- Is there a more effective way of managing vegetation with respect to fires
- Are there lessons that should have been learned from previous fires that have not been applied?
We’d love to hear from you. Share your thoughts on these questions or anything else that is of interest to the wider utility audience with us. Contact our editorial team at firstname.lastname@example.org
Until next week
PS: Don’t forget we will be at DTECH2019 next week. Be sure to come and say hello to us at the Clarion Power and Energy studio on the exhibition floor. Also, don’t miss the discussion at DTECH2019 about vegetation management – more information here.