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Most fire victims are still waiting to be paid by PG&E’s Fire Victim Fund, investigation finds

As the Dixie fire ravages northern California, Pacific Gas and Electric has admitted that its equipment could have sparked it. The utility company has sparked fires before, including the deadly Camp fire in 2018. As it emerged from bankruptcy last year, PG&E set up a million dollar trust for survivors. But an investigation reveals that the payout has been slow. Lily Jamali, reporter with NPR, and co-host and correspondent for the California Reporter joins.

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  • Hari Sreenivasan:

    In the western U.S., the Dixie fire, Northern California's largest wildfire, has destroyed more than a dozen homes and structures as it continues to burn throughout Butte and Plumas counties.

    Pacific Gas and Electric informed regulators that the blaze was sparked by toppled power lines and announced a plan to bury 10 percent of their power lines in high risk fire zones.

    PG&E equipment has sparked wildfires before, including the 2018 "Camp" fire, the deadliest and most destructive fire in the state's history. The company filed for Chapter 11 and last year emerged from bankruptcy, setting up a multi-billion dollar fire victim trust for survivors.

    But an ongoing investigation found that while the fund has racked up millions of dollars in fees, many fire survivors are still waiting for compensation.

    I recently spoke with reporter Lily Jamali from NPR's California newsroom and co-host and correspondent for the California Report about their investigation.

  • Lily Jamali:

    What we saw over the last half decade or so, is we really saw the impacts of climate change ramp up, we saw these fires sparking and not just sparking, but growing to catastrophic proportions. So some of these fires were as far back as 2015, so six years ago. And the largest of the fires that PG&E caused were in 2017 and 2018. That last one was the Camp fire, which you might remember ravaged much of the town of Paradise. It killed at least 85 people. It destroyed thousands of homes and left tens of thousands of people homeless.

    So it's almost as soon as that fire happened, PG&E filed for Chapter 11 bankruptcy protection. And what that did was it took all of these claims of 70,000 fire survivors and basically threw them into our nation's bankruptcy system. As a result of that, eventually PG&E and these fire survivors, through their lawyers, they struck a deal in late 2019 that called for a multibillion dollar settlement. But because half of that settlement is payable in the form of PG&E stock.

    Think about that for a second. You know, you lost your home and now you are being asked to accept stock in the company that took your home or destroyed your life. That's the situation that many of these fire survivors are in.

    So they now hold through this special trust that was created to distribute money to them, these fire survivors now hold almost a quarter of PG&E shares 480 million shares of PG&E. Very challenging to liquidate that kind of stuff quickly. And in fact, they haven't sold a single share. So that's largely why many of these fire survivors are still waiting for compensation from this settlement.

  • Hari Sreenivasan:

    So this is just two years, three years out. How are these people still managing to get by when most of them have not received a check?

  • Lily Jamali:

    Unfortunately, so many of them simply have not had the resources to move on. Even now that we're approaching, three years later, we're seeing situations where a number of people that I've personally met and correspond with all the time are still living in trailers and campers, really in temporary conditions.

    And when you see temperatures reach the triple digits, which they often do in that part of California, in that region we call the north state, it's really uncomfortable physically to have to endure that in a trailer and not to mention just having their lives be thrown into this limbo that is just continued on and on. I mean, we talk to people that are concerned about where their kids are going to go to school next year. T

    hey don't know, because if they're one of the lucky few that have gotten any compensation from this trust, they simply have they don't have enough to rebuild because of the way I laid out sort of the way this trust was set up in the first place where you have part cash and part stock in the company, that means that those people that have had their claims process, these fire victims, they were only getting 30 percent of what the trust has determined that they are owed. They don't want to run out of money. They're kind of leaving this buffer in just in case the stock goes down to zero, which is technically possible. We're seeing it suffer right now because we're now at the beginning of fire season.

    But 30 percent on let's call it a $250,000 claim is just not enough to rebuild a house that might have been worth that when they bought it in the '70s or the '80s. We're seeing labor costs skyrocketing. The cost of materials have gone through the roof. So everybody is thrown in limbo. And a lot of these folks were retirees who are now eating into their life savings, renting a house while they basically wait for that check to come in the mail.

  • Hari Sreenivasan:

    So what you're reporting also found was that while so many of the victims have not yet been paid or certainly not paid in full, that the administrators of the trust and the lawyers are getting paid their full rate.

  • Lily Jamali:

    Some of these numbers, Hari, are eye popping. We have a trustee who is making $150,000 a month, a top claims administrator is making $1,250 an hour. There are a number of bankruptcy attorneys and financial advisers who are making $1,000 an hour or more. And I think what fire survivors are saying is, look, if you're going to spend that kind of money, we want to see results.

    And the truth is, when you look at the reporting that's happened, we don't know exactly which firms and which individuals are getting how much. You've been having that kind of transparency, I think would go a long way, but these fire survivors feel like they have been burned on multiple fronts, both in the fire itself, many of them are upset with their lawyers for having agreed to this, what is clearly now a flawed settlement in the first place. And now they're having to deal with this administrative rigmarole without seeing the hard numbers of where every dollar that goes to those administrative costs is a dollar less for a fire survivor to rebuild their home to move on.

    And so I think that that's where there's a lot of concern. After our report came out, there was a group of state lawmakers here in California approached the attorney general and pointed to our story and said, listen, you need to review the process of this trust, how it works, as well as what the fees are, because they're pretty exorbitant from what fire survivors think.

  • Hari Sreenivasan:

    Lily Jamali, correspondent for KQED and NPR's California Newsroom. Thanks so much for joining us.

  • Lily Jamali:

    Thanks, Hari.

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