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PCG PR H - Pacific Gas And Electric Co News Story

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Large Cap
Market Cap £4.18bn
Enterprise Value £29.87bn
Revenue £13.37bn
Position in Universe th / 6853

UPDATE 1-U.S. Supreme Court rejects dispute over 2007 California wildfire payouts

Mon 7th October, 2019 3:03pm
(Adds background to case, paragraphs 4-10)
    By Andrew Chung
    WASHINGTON, Oct 7 (Reuters) - The U.S. Supreme Court on
Monday declined to hear a bid by Sempra Energy's  SRE.N  San
Diego Gas & Electric Co to recover $379 million from customers
related to damages it was forced to pay out in litigation after
the deadly 2007 California wildfires that burned hundreds of
    After state courts turned away the utility's challenge to a
decision by California regulators to prohibit it from raising
utility rates to compensate for the payouts because it had
improperly maintained its equipment, the Supreme Court opted not
to hear San Diego Gas & Electric's appeal. The utility had
accused state regulators of violating the U.S. Constitution's
bar on the government taking property without compensation.
    The court's action came on the first day of its new term.
    The case was being closely watched for its parallels to the
catastrophic wildfires that swept through California in 2017 and
2018 that pushed into bankruptcy PG&E Corp  PCG.N , the owner of
California's biggest power utility. 
    After the 2007 fires, state investigators blamed San Diego
Gas & Electric for three of the fires - the so-called Witch,
Guejito and Rice wildfires - that killed two people, damaged
homes and caused widespread evacuations. The company, which
supplies power to the San Diego area, paid out $2.4 billion to
settle damages claims, recovering only part of that sum from
insurance payments and other settlements.
    The California Public Utilities Commission in 2017 rejected
the company's request to raise rates on consumers to recover
$379 million, calling the management of its facilities
"unreasonable" and "imprudent." 
    Under California law and state court rulings, publicly and
privately owned utilities must pay for property damage if their
equipment caused the fire, regardless of whether or not they
acted negligently. They also must get approval to raise rates, a
request denied by the commission.
    In its appeal to the Supreme Court, the company said that
imposing liability and then forbidding cost recovery from
customers violated the Constitution. A group of PG&E investors
filed a brief with the court supporting San Diego Gas &
Electric's appeal. 
    The state commission asked the justices to reject the case,
in part because California legislators continue to work in
potential changes in allocating wildfire liability. For
instance, the state in July created a $21 billion fund to help
utilities cover liabilities arising from future wildfires caused
by their equipment.*:nL2N24D19P

 (Reporting by Andrew Chung and Lawrence Hurley; Editing by Will
 ((; Twitter: @lawrencehurley;
+1 202-809-3080;))
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